All Forum Posts by: Daniel Raposo

I think based on your criteria this could be a great strategy for you. The key to making the BRRR strategy work is finding a strong enough deal or a deal you can add enough value that it allows you to refinance at a high enough value to cash out your deposit to put into a new property. Just as an example if you all in cost to purchase/renovate is $300k and you're putting your $30k (10%) into it you would want to be able to refinance the property for a $300k loan ($400k value) so all your money is back out of the deal and ready for the next one. Obviously, you can see the difficulty in finding these types of deals. As for scalability, this is a slow and steady strategy to growth. If you're looking to scale you would probably need to build some more experience to bring in investors. This is where the BRRR strategy can be helpful, use it to put a few deals in your column, show your experience and then use that to get you into bigger deals. Good luck!

First question, is do you want to sell your property, or at least give up control of it? That's what you would be doing by signing a lease-option. You would also need to negotiate the other terms of the purchase, etc but the tenant would now have a contract to purchase you property and could exercise that right. The second question is why do you want to open yourself up to future problems? If you're going to sign an agreement with Section 8 saying there are no side agreements then you shouldn't have any side agreements... Keep things simple. If it smells bad it probably is. 

If you are in a position to purchase the house from them at that price, it could be a nice deal for you to buy and then resell at market value. However, if you would need financing it may be a bit of a challenge since you just bought an owner occupied property with FHA loan. You would most likely need to either refinance your current loan and then move into their house upon sale or get an investor, hard money or private loan which would require a larger down payment.

If you're just looking for advice to help them get out of the house quickly, their best bet would most likely be to list it with an agent at an aggressive price to get it sold quickly. They will almost always get the best price by listing with an agent, however if they want to be out within 30 days or so you may have a better chance finding an investor willing to make a cash offer with a quick closing. If so, you could write another post in the forums asking for cash buyers or investors in your area and then reach out to them about it. 

Either way, good luck!

Do your parents also want to continue living there after he sells it to you, or do your parents plan on moving somewhere else? It seems like they have pretty good equity in the property so I don't see why they would have a problem selling it, whether to you or someone else.

I don't really see any tax issues with what you're describing considering they wouldn't really be getting any profit or capital gain from selling the property for the mortgage value. Even if they sell it for full value, they would be under the $500,000 capital gains exclusion for married couples as long as they have been there for at least 2 years so there really wouldn't be any tax hit on that either. Can you provide any additional info as to their intentions with selling to you as opposed to someone else?

To answer your second question. The credit report will show a long history of her credit, not just the score. Each of her accounts (mortgage, auto loans, credit cards, collections, etc) will have a monthly history showing on time payment, 30 day, 60 day or 90 day late payments. You will be able to see how often and how long ago or recently she was paying late on her accounts, or how long ago she was having credit issues based on the monthly payment histories of each account. These are what will cause her scores to go down.

If this is your first time screening tenants, you need to first establish your rental criteria. Most new landlords don't realize the importance of establishing actual criteria and then sticking to it in the future, I made this same mistake when I first started. Making a tenant decision should be a pretty black and white decision for you, but this will only be possible if figure out your criteria first. The only bad tenants I have had so far were because I made judgement calls like this. Some criteria you should have a clear cut answer or might be as follows.

Income to Rent Ratio - (Monthly Gross Income = 3xMonthly Rent)

Credit Score - (600 or 650 or something like this)

Credit History - no late payments within X number of months

Other Debt - factor other debt into the above Income/Rent Ratio

References - how many and from who, and then contact them.

To answer your question directly, I probably would not rent to this person. I might be willing to work with someone if they have one issue with my above criteria, but this tenant seems to be checking a lot of those boxes...

I would agree that most of the CTREIA events are focused more on the sales pitch of the speaker, however they do run other events that are more education focused. If you're looking for more of a networking focus you would be better off with some of the other investor hosted events. There are a couple events in CT hosted by people here on BP, you can find them by searching the events section. Meetup is also a good site to find meet and greet type networking events. Good luck!

Hi @Victor CohenWelcome to BP!

What kind of properties and areas are you looking for right now? There are a good number of meet ups and networking events in the area where you could meet other investors, agents, lawyers, etc. and get to know the other players in the area. Good luck!

Hi @Robert Perrault

Welcome to BP, you just stumbled upon the best site for real estate investors and education. I would suggest taking a look at the BP Blog as well as some of the webinars and resources under the Education Tab up top, there is a ton of great information on here. 

If you're interested in meeting some local investors, there are some great meet ups and REIA meetings in the area. There are two in Norwalk next week if you're interested.

Closing costs are pretty typical and shouldn't be difficult to estimate in advance. On the buy side you're going to have to pay things like pro-rated taxes, attorney fees, title insurance, bank fees, etc. and on the sell side conveyance and/or transfer taxes, attorney fees, commissions, etc. and a lot of those costs are directly related to sale price as a percentage. For instance title insurance premiums are tied to price, as are commissions and taxes. If you're just looking to estimate a cost for the sake of analyzing a deal then 2-3% on the buy side should be fine for most properties in the 300-400k range and below and then probably 1-2% for higher price points.