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All Forum Posts by: Jeff Richardson

Jeff Richardson has started 12 posts and replied 167 times.

Post: Contractors needed for Live-In Flip in Houston

Jeff RichardsonPosted
  • Lender
  • Irving, TX
  • Posts 175
  • Votes 76

@Nicholas Hughley We use All Star Contractors and Hinton Services, both do excellent work in a very timely manner.

Post: Investment opportunities in Beaumont, TX

Jeff RichardsonPosted
  • Lender
  • Irving, TX
  • Posts 175
  • Votes 76

@Minh Le We received all of our deals from lifestyles  by joining at their higher level membership. That means, they find the deal, vet the deal with comps and a contractors bid, and all you have to do is look at the numbers and tell them if you want it. I made back 300% of the cost of membership on my first deal and each subsequent deal was at least 200% return on the membership fee, plus, I didn't have to put any effort into putting the deals together. Lifestyles teaches you to leverage people's time and expertise instead of trying to be a jack of all trades, you can focus on what makes you the most money/hour. 

Post: Pay cash for total price or take loan?

Jeff RichardsonPosted
  • Lender
  • Irving, TX
  • Posts 175
  • Votes 76

We buy all of our properties with Hard Money and refinance immediately after the rehab in order to limit our cash in the deal, our Cash On Cash returns are always above 20% and our equity Capture is always at least 50% of our cash outlay in Houston. Once you pay down/off a mortgage your tax liabilities go up drastically, because you no longer have the mortgage interest to cover the portion of the income that your depreciation doesn't cover. You also are limited with only 1/5th of the appreciation that you would receive if you used leverage and purchased a minimum of 5 properties with the cash you have in 1. Many people also don't realize if they have a paid off house vacant, it is just as bad as a leveraged house, for multiple reasons: if it rents for $1,300/month, you have essentially lost $1,300 if it isn't leased, you will also always have to pay property taxes and insurance and for the described property that would probably be ~$350/month. Remember, all you ever save is the interest that you pay of the mortgage, because you'd have to pay taxes and insurance already, and the principal goes back into your networth as equity. On a $130,000 house leveraged at 75% LTV at 5% interest, that is only $406/month, historically real estate appreciates at 5% a year, since appreciation is based on the total value of the property, not just the leveraged amount it more than makes up for the interest payments.

Post: In need of handy man

Jeff RichardsonPosted
  • Lender
  • Irving, TX
  • Posts 175
  • Votes 76

If there is substantial work, I use All Star Contractors or Hinton Services

Post: Strategy Change Rental Price

Jeff RichardsonPosted
  • Lender
  • Irving, TX
  • Posts 175
  • Votes 76

@Juan Rosado Two things: 1st, there are better loan products than FHA for house hacks, depending on your credit score and income you can qualify for either a 1%, 3%, or 5% conventional loan with close to the same interest rate. FHA loans carry PMI for the duration of the loan, Conventional loans drop their mortgage insurance when you can prove you have 20% equity, shouldn't take long if prices keep jumping 10% per year in DFW. 2nd, if you're going to use a realtor to purchase the property, they should be providing you with the "Leased" comps, all other routes of rental comps use what the property was listed at, not what it actually leased at.

Post: What would you do in my situation??

Jeff RichardsonPosted
  • Lender
  • Irving, TX
  • Posts 175
  • Votes 76

@Amadeus Hladun one of the most important skills of real estate investing is finding good deals, if you have a good deal, finding money is no issue. I would focus your time on figuring out what you can do to get better deals, this will be your highest $$$/hour you can make.

Post: Dallas Rental Market

Jeff RichardsonPosted
  • Lender
  • Irving, TX
  • Posts 175
  • Votes 76

@Lynn Cornell I would definitely purchase an apartment complex with that type of cash, you're going to get much better cash flow and tax advantages.

Post: Tax Lien

Jeff RichardsonPosted
  • Lender
  • Irving, TX
  • Posts 175
  • Votes 76

I believe Arnie Abrams is the expert on this subject in Texas.

Post: Investment in Houston, TX

Jeff RichardsonPosted
  • Lender
  • Irving, TX
  • Posts 175
  • Votes 76

@Bruce Cash If you want good COC returns, you're going to have to buy properties well under market value with either private funding or Hard Money, that way you can roll the very large majority of the purchase price and repairs into the Hard money loan or Private loan. Buying at market value and/or putting 20% down will not generate the COC returns that you're looking for. My last deal was $50,000 purchase price, $32,000 rehab, $122,000 ARV so were out of pocket our closing costs from title and hard money loan fees. After the property is rehabbed, we will do an immediate rate/term refinance and will be cash flowing $447/month, over 100% COC return. Buy that same property with 20% down model and your out of pocket is $10,000 down payment + $32,000 repairs + $5,000 closing costs = $47,000.

Post: Investment opportunities in Beaumont, TX

Jeff RichardsonPosted
  • Lender
  • Irving, TX
  • Posts 175
  • Votes 76

@Minh Le We used Lifestyles unlimited to find all of our Houston deals. We are able to find exceptional COC returns and Equity capture on each of our 4 Houston deals.