All Forum Posts by: Haider Abdullah

BP family, Happy Sunday!

I’m thinking of different ways to grow my portfolio and currently, I’m actively flipping in DFW with investor capital.

Here’s a scenario and I’d love to hear how you are doing this:

1. Buy a home for rehab with partner money

2. Rehab home with partner money

3. Once completed, cash out refi (Ive heard minimum 6 months before this can happen?)

4. Pay the investor as if it was hard money at 10% and own the property

I see this a very low cost to entry as the only capital I have to come up with is the difference between what I pay the investor + 10% and the amount I refi the house for. (If there’s a gap)

This will definitely vary based on deal, however, I’m able to leverage no interest money (partner money is non interest) and then maybe as a hedge to not selling the flip, I can employ the above strategy and keep the asset and pay the investor a solid 6 month return (10%).

This adds doors to the portfolio without having to deal with the upfront cash requirement and the house is ready to go and super tenant friendly.

Thoughts?

Thanks for the newer responses! I wish downsizing was an option. With 3 kids under 8, going from a 3 bed to a 2 bed is not going to work. Especially now with everything being virtual, we need space for work/school/etc. 

@Brian G. @Sean McCluskey thanks for sharing the insight. We can come up with around $150k and I’ll get a loan for around $750k so we can bump up to $900k range and keep costs somewhat the same. Love the realtor idea, in fact, have actively been considering this. 

Good to have options! I find lake forest to be the perfect compromise relative to location, amenities, etc. most of our social life is in Irvine too, so just off Alton or Bake will keep us close to “comfort” yet allow us to own, not “kill” the bank and hopefully, grow some leveraged equity in our home. 

Thank you!!

The “safer” option is to probably own my own place first too. Worst case, I’m paying toward my own equity (eventually) and that will at some point become leveraged. 

Where I'm stuck is: I need to spend money on living regardless. And because I'm spending $40k/year on rent, my thinking is: where can I get the best ROI in this $40k? Because the $40k is a fixed cost. Sure, I can move and spend a bit less but that's unlikely where I am.

So, options would be:

1. Do nothing, keep renting

2. Keep renting, use cash I have to start building CF through, likely, OOS investing 

3. Stop renting and buy my own, build equity, leverage and buy more

Great sharing folks, thank you! I should’ve mentioned that I have 3 young kids too, so house hacking may be a harder option. 

We are exploring both options actively and ultimately, the hybrid is best for so many reasons. 

Also agree with the reverse engineering concept which is what we’ve actively started to design. Like many posts on BP: if you have “$x”, how should one invest it. For us, at $3400 month in rent, the $40k year I’m spending on rent is a colossal waste IF I can get into a home that works for us and keeps our payments within same range. 

I’m actively flipping in Dallas and the intent is to use the cash from the flips to then buy and hold outside of primary residence. And eventually, build up equity and cash out refi to buy more and maybe at that point, even rent out the primary spot and get something else. 

So many options, so much fun!

Thank you!!

I live in SoCal which is pricey. I have cash...do I start investing in doors outside of CA where $100k cash can buy me a leveraged quad, or do I put down on a high ratio loan in SoCal and buy a house for $700-800k?

Various schools of thought here:

- invest in our own home, stop paying rent ($3400pm in Irvine) and pay your own mortgage. Plus, it’s CA, so values will always be strong and appreciation will always be there

- grow equity, leverage with heloc and invest in a year or so...

- or buy maximum number of doors in less expensive states and start cash flowing immediately and creating a multiple door strategy off the bat..

Our ultimate goal is to have dozens of doors, if not hundreds, however, the first step is so crucial.

I honestly don’t see a “wrong” here but I’d love to get the community viewpoint to truly assess both options (or others) and then just get into it ASAP.

Worst thing to do is a analysis paralysis and ultimately do nothing.

Thank you BP community!

Haider

Hey BP community!

I’m an active flipper in Dallas while living in Souther CA and now looking to use similar strategies to grow the buy and hold portfolio.

I use partner money to fund all my flips, and to date, it’s all been private money not hard money.

I wanted to know from you folks as to how you appeal to hard money lenders, what rates are common/reasonable, and then how you bring in private money.

How do you structure this (repayment, equity, duration, etc)? What do you foresee if the intent is to BRRRR in today's economy/market?

Would love to hear your thoughts - actively looking to raise funds to grow the buy and hold portfolio very aggressively.

Thank you!

@Brian Eastman thank you! You’re spot on with the education. 

Appreciate the response and hoping to get this structured so we can start having some fun!

My wife has a SDIRA. From what I u see stand, because I’m not connected to her linearly, I should be “qualified” in terms of being able to take profits on deals.

Scenario:

Wife and I structure $100k deal flip through her SDIRA.

Let’s say we make $20k net at the end.

Let’s say we agree to 50/50 on profit.

So, at the end of the deal, is it as simple as putting $110k into her SDIRA, tax free, and me (spouse/deal provider) taking my $10k cut on the deal (taxable to me)? And then we continue to do this and grow her SDIRA tax-free while allowing me to take profits because I’m not “disqualified”?

Any guidance would be greatly appreciated. Especially if you can help us understand on how to structure so this I can do the above. Ultimately, we want to unlock the potential of her (SD)IRA while allowing me/household to generate income and grow her pot tax-free.

Thank you!

Thanks Lucia! 

I have been fortunate to have been able to get a team working for me out there so we’ve got them working hard and they know the market. I do see the demand; just hope Covid doesn’t slow down materials supply or affect people’s desire to spend on homes (resale). I am hoping this presents some good investment opps though...

thank you!

Hi folks,

What’s everyone’s thoughts/experiences with the recent spike in COVID in Dallas area? Have you seen this slow down the market (resale)? I’m also hearing that supplies are a bit harder to get.

Would love to hear from you, and also, generally about other markets. Are we entering a time of uncertainty that’s worse than what it was in March and what impact will this have on prices, rehab resales, wholesale deals, rent, etc...?

Has the time come to take your “foot off the gas” while COVID settles or are we to continue marching forward?

What are hot pockets for fix and flips based on your experience?