All Forum Posts by: Drew C Grossman

Just sent you a pm. 

Hi @Sangeeta Salvi - I am an agent / investor and I am in Jax. Just shot you a pm!

Thanks for taking the time to share..! That’s a crazy experience with the contractor / electrician. I’ve dealt with a handful of things but I think this one takes the cake!

Question is, when are you starting the next one?! Lol

Great question, and I’ll try to answer with two examples. It really boils down to if you are using your own cash to finance the Brrrr vs using financing /hard money. 

#1 - (Cash Example) You buy a property for 100k, put in 50k of rehab to get an after repair value of $250k. Now let's assume you brought 100% of the cash to the table and you don't use any financing or hard money…you can refinance out at 65% LTV and get $162k out..after closing costs you will walk away with 100% of your $150k cash back….and you can rinse and repeat the process. Hypothetically you can recycle the same money into 10 different properties over 10 years…doing 1 a year.

#2 - (Financing example) You buy that same 100k property, put in 50k of work and get a ARV of $250k. The only difference is you bring your own cash for 20% ($30k) and borrow the remaining 80% ($120k) from a lender/hard money / private financing. When you go to refinance at 65% LTV you will get $162.5k back…less closing costs…less the $120k you owe the lender …less fees and points you owe to that lender ….in this case you only walk away with $20k ish. You get a portion of your money back, but it's much less efficient because you will pay a hefty price for hard money or this type of financing that will eat into your profits. It can certainly still work but depends on the property itself and specific financing terms available to you.

Although you can expand both ways, being your own bank from the start may work the best but depends on your situation. By doing so you will avoid double closing costs / lender feee and also retain all of the profits….if interest rates drop significantly this may change the story. 

My main point: In most cases, these high interest rates (especially with hard money/private financing) will diminish your returns rather than boost them. There is a price level where this will invert and will be the opposite where leverage boost your returns but it depends on the price point…amount of money borrowed relative to the property and the properties operating expenses. 

Hope this helps and best of luck!

Hi @Dominique Rucker - Welcome to the community! Be sure to take advantage of the group.... you will get a lot of different opinions and perspectives. 

Here is my two cents knowing the Orlando market.... I think buying a primary house for you to live in can offer one of the easiest most practical and efficient ways to get started. I think the main focus for you should be "buying right" and getting a "good deal" so this can set you up for your next investment. 

Start by finding a property that your Mortgage will be lower than what that same house would rent for. If you can buy a place ALL IN Mortgage at $2,000 and they rent for $2,500 this is a good start!  It sounds super obvious but you would be surprised that some localized areas will be more expensive to own vs that same house to rent. By doing this, this enables one of your exit strategies which would be to rent it!

The pricing side of getting a good deal is a more complicated to analyze. I think the main thing to look at is as interest rates continue to rise throughout the prices will deflate...however I think Orlando and Florida as a whole will fare better than a lot of other markets in the country.  

Since you mentioned you are a travel nurse...to buy your next property you will likely need to save your "earned income" from your Nursing job ....OR if you made a good financial decision on your primary purchase it will allow you to potentially access equity by refinancing or taking a line of credit on the home, only giving you more options in the future!

This is a very questionable zip code in Jacksonville and an D class area, and I would not expect your cash flow to be great out there.

What are your expectations for price point and returns? 

Anything east of the St John’s river to the beaches is generally a more A-B area. Price points will be much higher with that…There are some pockets of C areas around the outskirts but very location specific. 

Work with the buyer and seller and then coordinate with title accordingly. 

Since you have on or before Feb 15th you have flexibility in the closing date BUT you need to make sure you give title enough notice before hand because they usually need to have things in place on their end before closing…title report ect

Welcome @Jonathan Woody - 125 properties in     2 1/2 years is impressive! What type of deals do you work on most for your brokerage? I’m sure you have learned tons throughout the process by working these deals….and I think you are smart for wanting to cycle your earned income into real estate…it’s always funny to me that some real estate professionals don’t own themselves!

I grew up in Jax…started real estate out of school in Central Florida and bought a handful of properties…trying to expand to a few other markets after I am done with some current projects.

Keep us updated on your progress. Just shot you a pm to connect!

Hi @Matt Caviness - am also in the middle of some Duplex brrrr projects and will be focusing on finishing them before starting anything else on the investment side for the time being. 

I've thought about STR although I haven't gotten into them yet. Have you done STR in the past? It's one of the few areas of the industry I know the least about… I'm curious to what sparked your interest and what your expectations are? STR have been some of the most popular main stream investments and everyone made it look easy (from an outsiders perspective)…. need to be very prudent in your underwriting!

As far as your goal for Orlando…the landscape is very diverse leading to a lot of different strategies with investments….there’s opportunity with diligence. I went to school in Orlando and am very familiar with the areas!

@Tyler Gibson would be a good person to reach out to for more specific options on the STR side of things

Hi @Julie Suckow! 

Welcome! I also invest in the Ocala market. 

If we stay strong in numbers, maybe one day BP will make an Ocala location for Florida! Lol