All Forum Posts by: David Chappell

I agree with all of the above areas, close to Tesla/COTA if youre willing to go that far out of town. I like my area of southeast Austin on 35/Slaughter. I live next to the Goodnight neighborhood and I bought for $280 in 2017 and it was appraised at $337k in July so pretty decent appreciation there. Not the best schools though. I like the goodnight area, they have big plans for that place and theres also a new neighborhood close to 35 by the toll road and I heard rumors of they building a mini zilker down here, so theres some exciting plans going on.

Ill let Todd speak for himself. But depending on your initial $$ you have to start out with, if you are quickly buying properties then you will most likely ALWAYS be managing a combination of 3-4 major activities at the same time. You will always be almost closing on a property 1, while managing the rehab for property 2, while getting property 3 on the market and getting property 4 refid all at the same time. Even if you only have 2 or those of going on at a time, it can get pretty draining. Birmingham inventory has been a little slow the past quarter or so, but I cant imagine acquiring 100 properties in the same market without doing my own wholesaling.

You could do that if you worked with a local bank who keeps their loans in house. But 95% of the "big" banks conform to Freddie/Fannie Mac requirements that require you to season it for 6 months so they would most likely ask for that. There are lots of smaller banks, credit unions, commercial lenders that dont require that you just have to call around. The rates/points would most likely be a little higher from what I have heard.

Jake, I wasnt too picky with my criteria for the actual house itself just wanted something that would easily get rented. Something at least 2/1/750 sq ft in a good part of town that only needed cosmetic work. For the part of town I spent about 10 hours in Neighborhood Scout going through the micro neighborhoods in Birmingham. I made a google sheet with all of the metrics that I felt were important (crime rate, rent yield, vacancy, unemployment, schools, college education etc) I recorded the name of each micro neighborhood with all of the stats in the sheet and used that to decide. I then went on Google maps and drew custom borders around each neighborhood and colored it red/yellow/green. Thats pretty much what I use to filter out properties, I take a look at the map and then confirm with my PM that it's a good place to buy in and then we take it from there!

For the wholesaler, it was a pretty good experience. He answered all my questions, met my PM out there to take a look at the property and was transparent through the whole process. He only missed the ARV by about $4k which I thought was pretty good, and the recommended reno budget he told me was spot on.

Hope this helps!

You could technically do that, but you would be paying 3-5% closing costs twice. My first property I refinanced with a 15yr HELOC through Regions right away and there were no closing costs, but I dont think they are doing those anymore.

Yes! Massive Action :) It did make me feel better knowing that the worst case scenario would be me selling the property for a small loss bc I couldn't get it rented etc..so that made me feel a little better. It's always easy to say "just stop looking and take action" but I guess I just had the right motivation that day and it made every decision after that much easier to make. Best of luck!

Thanks Ryan! I definitely wish I could invest closer to home but our wonderfully expensive city makes that hard to do :) 

Correct, you would have two options. You could finance right after the rehab is done and only get the $$ you spent on the propety (delayed financing option). Option 2 would be to wait 6 months and get it refinanced based on ARV and pay back the hard money lender.

Thanks for much for the help everyone! I paid for another appraisal and it came back $3250 over my best case scenario, so thats awesome! I asked my property manager to meet the appraiser there and walk him through the rehab we did and I think that was a huge help in getting a higher/more accurate appraisal.

Hi Everyone! I am getting close to my first completed deal, so I thought I would post some details here to share my story.
After lurking on the forums here for about a year I finally decided to start taking some action and putting my name out there. I am currently living in Austin, TX investing in SFH rentals in Birmingham, AL. I received a call from a wholesaler one day, I guess I had submitted a form on their website to add me to their list. Anyways, I explained to him what I was trying to do and told him the parts of town i was looking at. I had just taken out a HELOC on my primary residence and had $$ available to spend. He called me about an hour later and told me about a property he was about to send out to his list. It was just what I was looking for and in the right part of town too. I had recently had a call with a realtor in the area and I paid him to go take a look at the property and to give me a rundown of ARV and estimated rehab budget. I had run the numbers 20 different ways and they all seemed to work, but I was still worried. I was tired of being in the analysis paralysis phase so I decided to go under contract with the wholesaler a few days later, I figured worst case scenario I could sell it for a loss and learn a lesson. Over the next few weeks, I worked with my new property manager to help get bids and start the rehab. A month or so later it was on the market and then a month after that, a tenant was in place!

Here is how the numbers played out:
Purchase Price (cash from HELOC on primary residence) - $74,500
Rehab - $14,300
Holding Costs - $1,200
ALL IN COSTS - $90,000
Appraisal - $123,650
75% LTV Loan minus Closing Costs - $90,037

So after the 30 yr refi (conventional 30yr fannie/freddie rate term 3.37%), I have invested $0 of my own money in this property and its cash flowing $330/month.

Somehow my first BRRRR strategy worked out to the T and I have zero of my own money into this property which is awesome. I got a little excited and made 2 more acquisitions pretty quickly after this, so I am hoping those workout the same.

I would like to say I am 10000% confident I would not have had the courage to make a move like this without the kind souls on this forum. The contributors to this forum are truly willing to help others and I cant thank you enough for that. Everyone has helped me more than they know, and I am so excited to start this journey to help my family gain financial independence through real estate investing. Thank you SO much.