All Forum Posts by: Derek Adkins

@Corby Goade I don't understand the benefit either. From either side. I would definitely have to see what his proposed operating agreement would be before making a decision. He did mention also that he could front costs for any repairs and would also like to renovate the garage apartment on the property as well adding additional cash flow to the property I currently own. 

PM fees, sure, an added bonus, but definitely not basing any decision off that. From an asset point of view I guess 2 cash flowing assets are better than one? Even if it nets out to be the same cash flow as my current situation? Just thinking out loud.

@Brandon Vanderford I agree it is a very weird proposal and I really don't see where the benefit is from his side or mine. He mentioned it would be a property of similar value and equity as mine.

My property manager recently proposed a partnership between he and I on my current rent house. The proposal essentially was that I would allow him to assume 50% ownership of my property and in return I would assume 50% ownership of a like property in the same town that he owns. Since we would be 50/50 partners in both properties, he would not charge any management fees on either property. What am I missing? I would end up having the same amount of equity when it's all said and done, but i would expand my portfolio without any out of pocket expense to purchase a property. Any insight or opinions on this are greatly appreciated as I am on the fence on how to proceed. The property in this scenario is listed in my profile (green house).

Investment Info:

Other buy & hold investment.

Purchase price: $450,000
Cash invested: $60,000

AirBnB in the Smoky Mountains

No problem, good luck on your future investments! 

In my case, as a farm & ranch portfolio lender, as long as the loan payments continue to be made and do not default then we will not call on it. Of course there is a higher risk due to drop in value, but until a payment is missed you would be fine in our eyes. I think this scenario really depends on what type of lender you have and what your loan conditions/documents say. Another worst case scenario I would be worried about is the market "crashing" when you're trying to do a cash out refi.

@Ronald Rohde Holding for now!

@Obed Calixte I'm sitting at a ~55% LTV right now and was limited to that mainly because I used a commercial bank loan through my entity. The color is Forrestwood from Sherwin-Williams (SW 7730)

Investment Info:

Single-family residence other investment.

This was acquired using the BRRRR strategy back in Feb. of 2021. It also has a detached garage/apartment that I plan on renovating and operating as a separate rental.

What made you interested in investing in this type of deal?

No cash out of pocket!

How did you find this deal and how did you negotiate it?

I found it through a wholesaler on craigslist.

How did you finance this deal?

Private money

How did you add value to the deal?

Converted the home from a 2/1 into a 3/1 by turning the second dining room into a bedroom. There was a fireplace/chimney that was seperating from the house located in the second dining room that we had to remove and wall off. Renovated the kitchen, new electrical panel, flooring, siding, and interior/exterior paint. This was about a 60% remodel if I had to guess.

What was the outcome?

No money out of pocket! I based my numbers on $120,000 ARV from lack of comps, being in a rural area, and appraisal came back at $160,000!

Lessons learned? Challenges?

Dealing with contractors and the importance of creating a contract and keeping them to a schedule. Renovating/replacing everything that needs it instead of the bare minimum in order to try and stay in line with BRRRR projections.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

I refinanced this with Extraco Banks, a local commercial lender. I think they have a handful of branches across Texas. Gerald Popp is my lender and he's great! As for agents, I work with a lot of amazing real estate professionals across Texas that I can recommend. Just ask!

Thanks @David Schmiediche I'll try to make it!