All Forum Posts by: Taylor Dasch

I did a lot of research on this recently as well and came to the conclusion that a cashout refi would be better when you are using the funds for a down payment. I think the biggest advantage of using a HELOC is when you are rehabbing properties and plan to pay it off quickly, and then keep doing that over and over. To me, it depends on the return your getting from your property. Im probably wrong in some aspect of this, but if your property is a good enough deal to pay the usual expenses as well as the HELOC and still produces cash flow, It would be better to keep the equity in the properties and when the HELOC is paid back you can cashout refi and buy a 32 or 64 unit. Whereas using a cashout refinance you would lower your cash flow on your other properties, which is still not a bad scenario since the percentage of return will most likely be way more than the percentage lost on cash flow from the refinanced property. Great question though I am interested to see what other people say and congrats on the 16 unit goal that is a big goal and I think you will get it!

Great idea, I havent heard of this and will definitely use it on my next project. I'd say get the big stuff done first such as any electrical/ plumbing/foundation work, then re assess your budget and do the cosmetic updates starting with paint then kitchen and bathrooms. Next would be flooring, and light fixtures. Once the property is fixed up, I would hire a professional to take pictures. Then price the property and post the property for rent and tenant selection. This is a very general idea obviously. I see how it would help a lot as you could have a timeline for everything and schedule your contractors with more confidence. 

That is awesome man! I have played the piano for 5 years now, started in my adulthood after learning the basics as a child and it has been such a blessing to me! Do you play as well?  It depends on what kind of financing you will use, Id go somewhere in the middle to play it safe. I use conventional financing so I have to make it look like i have a healthy stream of income coming in. However I am sure that there are some lenders on here who can go further in depth to your question. Good luck.

I have a couple, but the most accurate is to facetime my contractor while walking the property.  Sometimes I'll look at it and just use my gut feeling which is typically within 10-20% of the rehab costs. I am almost done completing a rehab and it has been very beneficial for me in terms of estimating costs. I got multiple bids for each job and have a good idea of what things will cost. Google proved to be pretty inaccurate when doing my research.  The trick is figuring out what needs to be done to get top dollar or meet your goals in the most efficient way.  This is where I went wrong on my rehab (I over rehabbed). But it is still worth it just for the first hand learning experience.  If you buy at a decent discount you have plenty of room for error IMO.

No problem! ARV is important for a couple of reasons, if you use the BRRRR strategy, it helps to have a general idea of how much cash you will get back out when you refinance it. If you partner with someone, you will need to be knowledgeable on the ARV and have confidence in your calculations so that you remain on good terms(and dont lose all their money) with the person who is funding your deals. For your scenario, It is best to have a general idea of what it would be only so that you can use what $ you have the wisest way possible. Often times, a property that needs a good amount of updating will be listed at higher than market value, if you dont know the ARV, then you will overpay for the property. Even if it meets your rental criteria, It is best to have a back up plan if it doesnt get rented out. Knowing the ARV also helps with negotiations when a property is overpriced, and how much you can go over asking if it is underpriced. Learning how to estimate it is easy, but it does take time looking at realtor and zillow. Go to the sold section on realtor.com map out your target area/neighborhood, preferably within .5 - 1 mile, then look at the properties that sold, the total cost and the cost per square foot, condition of the property, bathrooms, and kitchen, and # of Bedrooms the amenities each property has or doesnt have. If you look at it every day for long enough, you will eventually know each neighborhood in your market and a have a decent estimate on what the property will sell for. Or you could just use Bigger Pockets Pro which I think has a feature that shows ARV.

Thats awesome, I would first determine your price point that you want to be at, then look up Zillows median home price in each area your interested in. Then dive deep on whichever areas meet your price criteria. Next on the list is cash flow, lets say you want 300/door, the market you researched looks like it could produce 500/door, then dig deeper on that market and see if you like the area - my market(Temple) has a big hospital which is the primary job source for the community so I figure I will likely have nurses and first responders as my tenants.  Do that for your top 5 markets and see which you like best, and then I'd find a realtor for your top 2 and have them bringing you deals!

Thats awesome! You still have plenty of time to build your portfolio, I dont do this but I saw someone talk about this strategy on TikTok maybe lol. But the idea is to just do flips starting out. Lets say you make 50k/flip. You do 4 flips and that is 20% down on a 1 million dollar property. Then once you have that apartment or whatever it may be, you start over except this time you have more passive income to play with. I am not sure if this is the exact strategy though lol but it does make sense to me. Also you dont really need to have cash or credit if you are flipping and become very knowledgeable on your market, as HML love to lend on flips but I do think they run your credit so you may have to get that a little better depending on how bad it is. But all of them are different. So just build relationships with them, learn your market, and hustle for deals and you will make it ! Good luck.

Wow! You have a great plan and if you keep learning and stick to it, you will be financially free long before your goal date. Id stay in college so long as you love what your going to school for and get a job doing that, then get an FHA loan for a househack. I really wish I would have learned that before purchasing my first property.

Neighborhood-I like B and C class neighborhoods, some would classify my properties as being in a C+ class neighborhood but in my market it really is street/block dependent. Which is also why it helps to have a great realtor who knows the area. 

Size- Im with you, 3/2s typically work best for rentals- better tenants, less turnover, Higher ARV.

MFH- 2/1s are fine just be sure you use a higher vacancy rate when running the numbers. Ideally 3/2 but I wouldnt pass up a multi family property because it was a 2/1 on each side. 

Lot sizes dont really matter too much IMO unless it is a really small lot or really big. 

Property Condition- This is where your research and market knowledge really come in to play-another reason to have a good realtor. Ideally starting out you should get something with light cosmetic updates so that you have less risk if you go over budget or if it does not rent out for what you expected. But IMO if you are looking to build a decently sized portfolio, You could get a pretty run down property that needs full updating, BRRRR it, rinse and repeat. This is a lot harder than it sounds however. This is why you start small. If you have no idea what any of this work costs, what the property needs, or what the ARV and rental value is then you will be taking a massive amount of risk.

Cap rate-is mainly for large multifamily IMO, I analyze my deals by using COC return, and my goal is 15% AFTER BRRRR-which is easy, but I still would like a decent return in monthly cash flow as well so wont refinance to the full value of the property unless it still cash flows 500/month after expenses. ( on my current project).

I base my investments on what I like to do and my personality. I wouldnt like to call my tenants asking for their rent ( I would if I have to) I prefer a tenant who is low maintenance and pays on time every month. Not saying that all MFH tenants are like this but statistically there is a higher probability of a late payment when compared to SFH. You are correct though, multifamily is good for scaling. At the end of the day it is all about knowing your market very well, and then taking directed action to acquiring properties that meet or exceed your criteria in your market.

Once you are super confident in analyzing deals and ARV and cost to rehab/hold the property, and you find a good enough deal, financing will be the last of your worries. However IMO a job is crucial to being able to get loans on properties at least in the beginning. Keep learning, read as many books as you can, and start grinding, your young enough that if you start investing now, you will be lightyears ahead of 95% of people your age!

This is definitely a must if you are investing out of state and are unfamiliar with the market or dont have many connections. I have used two REA in the past, I know my market pretty well so my only criteria was be willing to view "cheap" properties and write offers. For a lot of REA it is hard to get them excited about showing smaller/cheaper investment properties. Which is why I decided to become a REA, to be able to write my own offers as well as give other investors the time and service they need to get the property. When I have an investor client, depending on their goals, I'll do a Rental CMA on every property we view so that they can get a headstart on where the numbers need to be for the deal to work. If they are flipping, Ill bring an ARV CMA to the showing. Since I am almost done with a remodel in Temple, I am pretty familiar with what the costs for certain repairs are so I try to help my best with that as well.

Join your local FB investor page and there will be plenty of wholesalers on there selling off market properties.  If you are looking to get an off market property without competition its honestly best to get propstream or start driving for dollars and call the property owners up yourself.