All Forum Posts by: Greg Scott

I'm connected with one wholesaler.  He specializes in older stuff in working class neighborhoods.  DM me and I'll send you his email.  I've never bought from him, but he seems to have good deal flow.  Some sell very quickly, and some get re-priced.

On the other hand, have you trolled the MLS? There are plenty of good deals in Indy right on the MLS.

It is worth seeing how this boring deal impacts the rest of your portfolio.

Remember, looks like 100% bonus depreciation will be reinstated this year. This property might not have an effective BRRR strategy, but if you get a massive depreciation write-off, you might be able to eliminate a ton of taxes that you would have to pay next year. From an after-tax perspective, this boring deal could become a home run.

I never buy condos because of the large HOA fees. Even if they tell you the monthly payment is a number you can live with, they can always hit you with a special assessment. The main problem with condos as a rental, is that a huge portion of your operating costs is completely outside your control.

This is not a stupid question.  It gets to the core of underwriting. 

Underwriting a property is part art and part science.  Math is easy.  What is harder is answering questions like the one you are posing.  Often, there is no scientific way to get to the answer.

We own two properties in a B-class market.  In this market there are two newer properties with much higher rent.  All the other properties of similar age and have much lower rent than ours.  If you are just doing math, you would conclude there is no possible way our properties can get the rent we are getting.  And yet, we do.

From an operational perspective, we simply keep trying to make our properties better and better over time.  If we find that our occupancy is pushing close to 100%, we start raising rents.  We raise them until we start having trouble leasing and then stop.  Sometimes  occupancy drops below where we want it.  Then we may lower rents.  Other times we identify ways to make our property even more desirable.  Sometimes that is improving the unit interiors, sometimes improving curb appeal, sometimes adding amenities, or numerous other actions.

So, with the property you are analyzing, what can you do to improve rent?  That is the art of it.  It sounds like one solution is to furnish the units.  Look at the condition of that property.  Does it look like junk?  If you made it look better, do you think you could increase rents?  Is there a key amenity missing that other properties have?  How could you differentiate your property from the others to provide a unique market proposition? 

There is probably not a mathematical answer to your question.

If this is your first rent property, you are going to have a lot to learn.  If you are making renovations, that first year is going to go fast.

I wouldn't worry about the 2nd property now.  Get this one rehabbed and operating well. Once you are nearing the finish line, your next move will be much clearer.

My immediate reaction was that the credit report is fake.

Don't deviate from your processes.  A good tenant would not care about the $47 if it gets them into a property they like.

On a related note, if you do not follow your standard process for EVERYONE, you can be accused of, and charged massive fines for violating fair housing laws.

My understanding is that the moment the HELOC is created, before any monies are withdrawn, it impacts your DTI. This makes sense because you could draw on it at a moment's notice. But, I'm not in the lending space.

The right mortgage broker is key.

In 2015 I wanted to refi my personal residence and at that time I had 14 SF rentals.  It was an interesting process.

I first went to the bank that was already servicing my mortgage.  They could not write me new a loan because they didn't have branches in our state.  Then I went to a bank that has numerous branches near my home.  They insisted that having more than four mortgages was illegal. (Obviously incorrect)

Finally, I went to a mortgage broker I had used in the past for my one in-state rent property.  He got me refied in no time.

I disagree. (Note: I am not a wholesaler.)

If you don't like them making over $10K, then don't buy their deals.  If I get a great deal, I don't care what the wholesaler makes.   Let me buy all those great deals.

Given the angled ceiling, it probably isn't.  You should be able to tell for sure by going into the attic space and seeing if any beams rest on that wall.

On the other hand, that building looks fully-rehabbed and the kitchen large-enough.  I'm not sure it makes sense to remove that wall.  What are you hoping to accomplish?