All Forum Posts by: Austin Fruechting

I can walk to this one!

It varies based on the property, but usually just slightly nicer finishes than are necessary to make the property stand out a bit more... Maybe a nicer vanity than standard. Maybe painting kitchen cabinets to look a bit more modern. Maybe stainless instead of white appliances if replacing them all. Maybe slightly nicer looking vinyls/laminates if those are going in, etc. Maybe replacing something that doesn't necessarily need replaced but makes a visual impact. I also typically provide washers/dryers too. Usually that adds a little to the rental amount, but even if it doesn't add to the rent, they rent quicker. One less month of vacancy over the life of the washer/dryer pays for them. 

I've never been one for specific goals. I had one goal when I started in 2010 and that was to achieve financial freedom passively through rentals. I left my job in mid-2015 and my wife left hers this year. So that's done! We did that through just taking advantage of the home run deals when they were there, and patiently waiting when they weren't. In fact in 2015 I didn't buy a single investment property. Had I stuck to some arbitrary goal of X properties in Y time, I may have forced an ok deal to reach my goal and then not been able to do the great deals when they came (bought 80 units in 2016).  

The closest it comes to a "goal" for me in 2018 is to be more intentional with my time. To live life intentionally. To enjoy and appreciate every day since any day may be my last. To travel, explore and enjoy our freedom.

We have the income we need for the life we want to live. I have general plans for real estate because I love putting deals together. So continuing to invest fits in with my goal of enjoying life. I bought two portfolios in 2017 (June & November) that I will finish up all the work on, refinance them, and have that additional income. When they are both done (summer), I'll also have around $200-300k to deploy into the next deal. I'm playing with ideas of what to do with that and wether I will do something alone, or go bigger. I'll see what fits in with my main goal of enjoying life. Time commitment will be a big deciding factor. If it takes up too much of time, then it won't be an option. I'll also be very patient with that and wait for the right deal as I always have. I still look for deals because I like analyzing and have a few investors I can partner with if a good one pops up before I refinance these other packages.

Absolutely you want to maximize your returns by not over-improving. 

As part of my a 32 unit portfolio I bought in June, there are 12 townhome units. My contractor, property manager and I discussed 3 levels of improvements for them as they came empty. The sweet spot was the middle option. Yeah I could have achieved slightly higher rents and had cooler units with the highest level, but the returns were abysmal for the additional costs. There were also 2 duplexes that it would have been nice to fully rehab, but for 1/3 the cost we could capture 2/3 of the rental increase so we went with that option. 

I will, however, "over-spend" an additional bit (maybe $500-2k) per unit that is probably not be necessary to achieve the rents we are going for. But I will do those to help ensure I get the rental rates I want, with the tenants I want, and to minimize the vacancy times by having a slightly nicer property/finishes.

Two times this can work: 1) when BRRRR-ing a property and you will refinance before the interest period hits 2) when the cash flow can pay it off before the interest period hits.

I've done done both multiple times, and am actually currently doing it again for a portion of the rehab on a 22-unit portfolio. They key is (in either case) you must conservatively run your numbers and have a buffer to account for the unforeseen. If you really know your numbers then it's not risky. Risk comes from not knowing what you're doing. 

I'm pretty young (32). I started investing at 25 and my wife and I are already retired. It doesn't take generations of wealth building needing to start young. If I were 48, I'd start investing in real estate and retire at 55. Hell of a lot better, faster, and easier than trying to build up a retirement account to be able to retire on at what, maybe age 70 if I'm lucky? 

I'd go talk to portfolio lenders and explain the situation. You may find one that is willing to count your bitcoin as cash in the bank knowing your plan to cash them out right before the purchase closes. Then you get around the having to cash out and have it sit in cash for too long. 

Fastest strategy is to BRRRR properties. Get most to all the cash back out and into the next one. And if you're looking to do anything with short term debt, the only thing I would recommend is BRRRR... otherwise you could easily find yourself not cash flowing and too over leveraged.

See if you can get multiple LOCs from different banks and apply at the same time. I've also used credit card promotional advances multiple times. I get offers from my cards all the time that are ~3% one time fee and interest free for 12-18 months. I'm actually in the process of using $40k that way right now for approximately 6 months that's only costing me $1200. Use your cash for the down payment. Use the short term for the fix ups. Refinance, repeat. 

If you're super new, then it may be better to work through the realtor for the others, but tack on the seller factoring realtor fees into everything. 

Alternatively, if you approach owner directly, you could work with a lawyer for the legal side to make sure you're covered through the process.

Or it may be better to pick the one up now, and contact the seller later to buy others. 

Perhaps you'll have to get creative with some seller financing. It all depends on so many variables about your personal situation that only you can determine. 

LOL at people calling themselves investor for reading a book. 

EXPOUNDING: Words don't matter, actions do. No one cares what you say, they care what you do. Titles don't matter, what you've done matters.