All Forum Posts by: Dave Kush

Depends on the property and depends on how you are going to purchase and finance it. If you're going to do a traditional brrrr, you either need enough cash to buy hold and rehab it, or A lender or combination of lenders to make up the difference. With a brrrr, you will want avoid a traditional mortgage for the purchase because of the seasoning period and so on. Ideally, find a private investor to loan you the initial funds and cut them in on the deal.

 All of this is great, and just wanted to emphasize the PS.  Try not to let any vendors emotional outbursts from taking you off the target. Easier said than done, but temper tantrums are a negotiation tactic. 

These are solid. I especially like the requirement to get rental insurance. In the past, I advised this, but didn't verify it, and when disaster strikes, literally, the tenants will expect you to pay for the things that their insurance policy should cover. Your policy will not cover those things.

This is less of a requirement and more a piece of advice for you: I always screen the prior landlord. Not the person they are currently living with, but the person they rented from before that. If they are not a good tenant, they're current landlord may say anything to get rid of them. 

Another good strategy I have found is that after I hear what the landlord has to say, I follow up with, "Is there anything else that you can tell me off the record?" I am surprised at how often more information, frequently critical information, arises from that question.

Congrats on talking yourself into sticking with it. 😀

I think you are right to hire a property manager, especially if you can still net that kind of cash flow. It's nice to be able to manage it yourself and save the money, but not if it eats up all your time and prevents you from doing the other things you need to do.

Hire carefully and think systematically when you bring on the manager or you will only create an additional problem for yourself.

Thank you. I am trying to approach a hml PRIOR to locating properties in order to build a relationship. Then I would bring them deals to fund that meet their requirements etc. Therefore, I won't have a scope of work or budget yet. Is this unnecessary at this point, and they will just require it later?  What, if anything, should I provide now to show that, if I get a property under contract later, I have the skill set to get it done. That's why I was wondering about the contractor, like if having somebody already helps. It's my understanding that HMLs tend to care more about the deal than the individual, but assuming that beyond credit and funds that they'd be looking for a signal that an investor is capable of executive their intended strategy. 

I have done a couple rehabs before, not in last few years and my regular contractor retired. 

I am preparing some documents that I would be able to provide to a hard money lender when approaching them. Definitely looking for properties that need work. 

I plan on using a contractor, but don't have somebody I use regularly. Should I locate a contractor first? Thank you for your help!

 Thank you. This is exactly the info I was looking for 

In general, this sounds like it is a successful strategy that is working for you. You may be passing up some opportunities to add a little extra value and grow your portfolio faster. Check out the Brrrr book. You would probably find a few ways to increase your profitability. 

I would demand positive cash flow from every property you purchase, and that includes the opportunity cost on any funds that you invest in the property that you could have invested elsewhere, such as in Treasury bills.

If you're still negative even at that low interest rate, how is that property ever going to cash flow?

If they are negative cash flow, how many houses could you own?

How many houses could you own if they all had positive cash flow?

You could probably get 75% of the 95k value (less the 44 owes)  if your credit is good. But that said, lending market changing quickly. 

Make sure your first property cash flow covers the payment or include it in the calcs of what you buy. Remain cash flow positive on both properties.