All Forum Posts by: Account Closed

@Richard Swift I know you can go replenish that equity quickly by other means! Then on to the next deal my friend

@Kenny Schumacher I actually like some secondary regions in Indiana, Kentucky, and a few parts of Wisconsin way more than I like Ohio lol. Check those out too! 

@Richard Swift 

This sounds like the property we talked about a few weeks ago right?

Honestly, I think you did alright if you spent 6-8k on very minor improvements and got a 40k equity boost out of it. Appraisers are usually hard pressed to give someone a huge boost in value over their previous purchase price when they know the owner is trying to force equity- so you did well! It doesn't look like a lot of that equity is due to you buying the property at a huge discount either. 

I don't really see how you could pull money out of this property. Your current equity position isn't so thick, and I don't think this property should truly value higher than the appraisal. I think we had discussed trying to get these things parceled out separately so that you can treat them like two individual SFR's. That sounds like a zoning department issue, you might be able to reach out to them. I don't know much about zoning laws though, so this may be doable or completely impossible.

Looks like you're going to have to just go out and hustle up the extra capital the old fashioned way :)

@Kenny Schumacher

What kind of numbers are you getting in Huntsville? I have trouble making price:rent ratio work out well for smaller properties in the south. 

I haven't had much success finding big cash flow in primary markets this deep into the peak of the economy. Secondary, and select tertiary markets in the midwest that have strong rental markets with high rents and demand seem to be a place where I'm still able to find the returns people were looking for 3-4 years ago. 

Indiana is a solid state as far as taxes/laws/expense ratios, but Indianapolis has been so popular amongst oos investors and has gotten expensive.

Ohio is a place I'm back and forth on entering. Taxes are generally reassessed upon sale, and the tax rate can be high. Landlord tenant laws aren't the worst. Columbus is really nice, but too expensive and 7 caps in the midwest don't really excite me. Cleveland has deals as far as price-rent ratio go, but C class small multifamily out there can attract a pretty transient tenant class due to the abundance of SFR rentals- this is per the management companies I've spoken with, not personal experience. Owner paid water & sewer bills for MFR are insane in Cle too. Seems like SFR can be a good option out there?

I've considered some inbetween-cities areas in Ohio. I'm sure @James Wise can point out suburbs and secondary markets where he's seeing the sweet spot between higher than avg cash flow & manageability. I think he's a few posts up.

@Joshua Gross

You don't have to hate a job to move along from it. For some people, wanting out can certainly be a primary motivator. Your motivator, however, can be a different one. 

My previous job before going full time in my REI business was one I loved. I made great money by employee's standards, I was good at what I did, I delivered value to my employer and customers, and I was continuously offered opportunities to learn and grow. I had complaints as well, but overall my outlook was very positive.

I quit because I saw an opportunity to make a lot more money, fulfill a sense of purpose that was even more important to me, and be challenged at a higher level all while having the opportunity to build my own platform to express more of my latent professional skill set. 

I also knew that if the potential for success I saw came true (and I was confident it could), being the principal of a real estate investing business could offer me the financial means and flexibility to make adjustments to my lifestyle as my life situation changes. A family and kids may be in my future, and I would like to have the ability to be present for that. There may come a day where I want to work from home, less, or without a high level of responsibility. An excess of success today would allow me to morph an already successful business into a slightly or drastically different version of itself, so that it's an extension of my lifestyle, rather than the converse.

I say you choose a target for your future sooner than later and start working towards it today. If it means full time REI or passive REI+job, commit sooner than later so you can start making some progress!

@Nick Monge

Is the property occupied? If it is and the work isn't urgent, just stuff to do as the units turn, you can purchase this with a 80%LTV commercial loan. Of course, I would only recommend this if you've got some spare cash to perform the work as it arises, in case the rehab costs exceed the rents.

A 6 unit at a market value of 265k is a pretty good deal @ 650 rents/ unit (provided the expenses are pretty low). This is really similar to properties I come across in some select markets throughout the midwest and south. It's always nice to know of more- would you mind sharing the city?

@Alex Get I recently got put in touch with a portfolio lender that appears to be pretty flexible by a client.

"finance of america" is the name of the lender. My client spoke highly of them, their product, and their willingness to work with a variety of clients and situations. I have no firsthand experience with them yet though.. and I am in no way affiliated with them.

@Aaron Bonne 

I definitely like my money in buckets, and I'm finding it much easier to earn that type of income running a sales business. I like working in this business, and i don't find myself working an unreasonable amount of hours... so I guess you could say I'm as passive/active as I would like to be right now. 

Not that owning rental property is truly passive, as @Jay Hinrichs mentions. This is a huge misconception that many investors seem to latch on to. It's probably still much more passive than running a sales/marketing business. It also sounds less fun (matter of preference), for someone that doesn't want to be "retired" yet.

As for my plan with the funds. I couldn't quite tell you yet. I'm a rather immaterial individual. Beat up converse sneakers, costco t shirts, live in my starter home from 2012 and still have roomies paying the mortgage. I think the abundance of cash eventually gives you some reason to spend it, so certain "niceties" of life that appealed less to me before than they do now, simply because they don't seem as expensive as they once did. But there are no Ferraris or mansions in my near or probably far future. 

Giving back is huge- and I can't tell you exactly how I plan to do it. I've made small and large gestures to friends and family all of my adult life, before I had money like I do now, and I continue to do so. I don't quite know how I'll do it on a public scale, because I'm still deciding on the causes that are purposeful to me. And although I've given out money and things of monetary value, I've observed with extreme accuracy that contributions of knowledge and experience have benefitted their recipients far more than contributions of monetary value. The old, "teach a man to fish" adage, ya know?

@Uneeq Khan 

Don't pay someone a business partner's cut to perform a fairly commoditized service that can be provided to you for a lower fee. 

Writing an offer letter, coordinating a transaction, and receiving transactional funding are all pretty inexpensive services. 3rd party transaction coordinators will manage the escrow for about $300 bucks per transaction. Transactional funding costs about 1-1.5% of the AB transaction purchase price. 

Someone who takes a real cut of your business should not only perform tasks, but be a significant factor in the growth and development of the business. 

That's a very short warranty window. The inspection company I work with in high volume offers a 90 day warranty. Seems like it's pretty important to find a quality inspection company, huh?