All Forum Posts by: Greg Moore

@Greg Scott thank you. I’ll check the comps to see what I can find.

Fellow BPers, please help me make a good decision:

Background: I'm ready to list a newly rehabbed 2/1 SFH for rent. I paid cash for the house and rehab. The home was built with a window A/C which is sufficient. My A/C contractor told me "Don't waste your money upgrading to central air. This home and this neighborhood are fine with window units." (Note: I put in a new window unit as part of the rehab). Today, the Appraiser came to do the appraisal so I can do a cash-out refi to get my purchase price back so I can put it into the next house. (And you all know how much I love Appraisers from this post!) The Appraiser said he would only count the square footage in the family/dining area where the window A/C is because there is no A/C vent or central air in the two bedrooms. (You can assume the window unit is fine -- even in the summer. I've felt it and it was cold in the rooms with the old A/C unit on, and I put a stronger unit in).

So here are my choices.  What would you do?

Option A: Keep it as a Window Unit.  This will mean I can't do a cash-out refi. Upside in this scenario is I remain in-budget and all the rent is cash-flow. Downside is I'll have to wait before I can invest in the next property b/c I won't get my cash-out via the refi. The property would appraise for about $20k less, and below my target. This also changes my COC from 17% to 8.5%

Option B: Spend $5k for central air to ensure the appraisal comes in where I want it to be. (I acknowledge if I'm renting the appraised value is just academic for now).  Upside of this scenario is the home will appraise for more, improve (slightly) on renter's satisfaction, and will be in place if I ever decide to sell.  Downside is I'll be $5k over budget, and since I can only get my purchase price back from a cash-out refi, it is $5k of cost out of pocket. My COC drops from 17% to 15% (still ok).

Option C: This is a hybrid option: leave the window A/C in place, rent the home, and after it has cash-flowed for 5 months make a capital investment in a central air.  Upside of this scenario is I put the home in service and start collecting rent and can choose to pay for central air with the proceeds of the rent rather than my out-of-pocket.  I can always request the cash-out refi after that (e.g. May or June). Downside is I won't be able to return the $700 window A/C unit, I'll have to delay having my cash so I might miss out on a deal, and it might be a nuisance to the tenant for a few days when the central air is installed.

Please vote A, B, or C! Bonus points for sharing why you voted the way you did! Thank you! 

@Tyler D. There is definitely a place for you to be totally passive in the REI space. Have you considered Multifamily syndications? Totally passive; you're in first (well, approx first) position; they cashflow with 8-12% pref; and when the property exits as planned you get a nice payout growing your cash 15-20% IRR. It is WAY less risky than stocks with better returns. In some cases the GP(s) does a Cost Seg and passes on the ability to accelerate depreciation so you get some RE tax benefits. Just click the "INVEST" button, wait for the mailbox money, then on to the next deal that someone else finds and puts together for you. CrowdStreet is my favorite of these platforms, but Brandon Turner has a nice Mobile Home fund going with his company Opendoor Capital LLC.

@Kelly Peng I live, work, and invest in the Tampa area. I suggest you connect with @Kathryn Wilson. Kathryn is my wholesaler in Hillsborough and Pinellas counties and has a steady flow of off-market /below-market deals on distressed homes below $300k where you can force appreciation. She also has a solid network (eg HMLs and contractors) since you’re starting from out of state. Good luck!

Thanks for sharing @John Warren! I've used Cozy.co in the past and really liked it. I've been thinking about going back to it.  And thanks for the comments on Zillow and Apartments.com.

I'm going to attempt to self-manage a few properties in 2021. This is a new area for me as a landlord.  What are the latest and greatest tools you use for finding, screening, qualifying tenants, receiving maintenance requests, receiving and tracking incoming rents.  I'd love to hear your tech stack!

@Matt Whitney you’ve come to the right place for ideas. And I admire your desire to help.

My step dad was in a similar position only at the other side, meaning he was 75 and not able to retire due to too many bills. He still owed roughly 1/3 of his original mortgage (2/3rds paid down). He had car payments, credit cards, and more.

I offered to buy his house for what he owed, plus an amount to cover his debts (plus a little extra for a retirement vacation and to rehab a few trouble areas), as well as 6 months mortgage payment that I would keep in the bank as reserves.

In return, he would rent out the house for exactly my mortgage payment.

There are two things needed to make this scenario work:

1. Your dad has to gift you the equity in lieu of a down payment. This means no cash out of pocket for you.

2. His rental agreement basically needs to be a Triple Net Lease b/c you’re not setting aside Property Management, CapX, OpX.

We’re one year in and the set up is working. He is retired and happy. He autopays his rent on time and my mortgage autopays right after. He has no debt and his stress is basically zero. In fact, he was just out here to visit for his retirement vacation.

Were it not for this kind of creative deal structure, he would have been stuck working until his dying day and not enjoying his golden years. And since it was gifted equity and he pays rent equal to my mortgage, it’s really no big deal from my side. I’m happy to have done it and see him live a stress free retirement. With interest rates so low, you can probably put together a pretty sweet package that is within reach for your dad. Good luck!

Wow - the Crypto Gods must have been following our thread!  Bitcoin up to it's all-time high today ($20.8k at the time of this post... not to be confused with $6k per coin when this thread started in May). 

Friends - this has been an awesome thread that has had two lives: the original post in May, and the renewed activity this past week.  What's clear is that people in our BP community have strong views for and against cryptos, Bitcoin, etc. I've learned a lot from the views coming from both sides.  It's helped me exercise caution, set a reasonable amount to invest (that I'm willing to lose), and to be smart about blockchain technology before transferring my first greenback. In other words, this community helped me get what I was looking for. Thank you!

Based on my research:

• I'm bullish on BTC, ETH, Blockchain, and DeFi, but overall bearish on alt-coins and stable coins.  
• I feel the blockchain is BTC's greatest (and probably unintended) gift to us all.
• I would still rather own Real Estate than BTC, so I love the playbook of the asymmetrical risks of putting a little into BTC and letting the extreme gains fund real estate investments.
• I would encourage the bears to do more research. We've seen a lot of uninformed views in this thread.
• I would encourage the bulls to respect that crytpo is not for everyone and we have to respect an individual investor's tolerance for risk.
• And I want to thank @Russell Brazil for the absolute best comment in the thread earning him some 100 votes by the time this thread dies out!

And thank you all for your commentary. It's been great! I'm going to unsubscribe from my own thread.  (Too many posts to keep up with!). Maybe I'll revisit it in 12 months with a Real Estate Investor update on how this has played out.  I promise no gloating if the Bulls turned out to be right, and I promise humility and honesty if the Bears turn out to be right.

Happy investing everyone! May your real estate and your BTC reward you well!

@Jeffery Callis what’s your source? I look into this metric quarterly when Glassnode publishes reports on the percent of Bitcoin addresses that are “in the money” (at a profit). In October when BTC jumped to $13k, Glassnode reported,

“98% of all bitcoin UTXOs are currently in a state of profit,” Glassnode tweeted. “A level not seen since Dec 2017, and typical in previous BTC bull markets.”

And with BTC being up 46% since Oct it stands to reason the percentage of holders in the green is up, too.