All Forum Posts by: Chris Adams

Probably not, Banks want to see you have "Skin in the game" as they call it. So they are going to want you to put hard money down. That doesn't mean it has to be your money,

 I couldn't think if the correct name, but thats what my plumber does. I try not to do plumbing. If I went to the desert, it would leak.

All of the $/door numbers are useless in my opinion. Because they do not put the cost of ownership in perspective. If you own a SFR that cost $5k a month to own, you would never be happy with a $100/month return. For me everything boils down to DSCR.

DSCR = Debt Service Coverage Ratio explained here

http://www.investopedia.com/terms/d/dscr.asp

You need to determine what your DSCR minimum standard should be. Banks will tell you they typically want to see an experienced investor get a bare minimum of 1.20 : 1 This ratio should also be adjusted for risk. If the property or the investor is on the risky side banks may want a 1.5:1 ratio.

When calculated correctly DSCR is one of the best ways to analyze a properties performance. But DSCR is only 1 piece of the puzzle. I also look at some other numbers like COC and ROI for my new acquisitions.

When I started out I didn't have any money to spare so I leveraged hard at 1.2 DSCR. Now I look for 1.4 or better.

Ben Leybovich goes thru DSCR very well on one of his Podcast appearances, I think it was his 2nd but I'm not sure.

When Pex first came out I refused to use it. I don't like to jump on the next new thing especially when my name and reputation are on the line. Now I use pex exclusively on all of my new construction, and rental/rehabs. 

Thieves dont steal pex

Pex will not burst as easily if the water lines freeze

When I use pex in new construction we trim off all of the under cabinet areas with copper and it has a very clean look.  There is also a number from Canada on you tube that has done a bunch of how to videos for the pex type supply lines. I highly recommend watching them.

Great news @Mike Campbell 

Hopefully this education you received didn't cost you too much.

1 more thing, this system will not allow tenants to make partial payments, only full payments. I also use this to collect 1st-last-sec deposits.

I use quickbooks and they offer a product called IPN (Intuit Payment Network) which allows you to email invoices to tenants with a payment link imbedded in the email. The tenant simply click the link in the email, enters checking account info and payment amount and your done.

The cost is $0.50 per transaction. I have been using this for over a year and I love it. Once your paid you simply log on click download transaction and they sync the payment with quickbooks.  

I takes me less than 5 mins a month to bill and receive payments from my 5 rentals.

Since I haven't posted in about 7 weeks its time for an update.

 I mentioned back in November that I signed a contract on Presold #3. Winter came around just slow enough to let us get the foundation poured and start framing. We signed the contract on November 14th. Pulled permits and started excavating right away. After last winter I was very concerned about the weather. If frost starts before the underground is complete it would have been a real headache.

The city released my permit on 11-24 and we did excavating, footings, walls, underground plumbing backfill and poured the slab on Jan 2nd. This included Xmas and NYE holidays. Since the presold side of this unit has a basement, I let the foundation sit for 10 days after it was poured. This allows the foundation as much as possible in an effort  to reduce stress cracks in the concrete walls.

Here is a picture of the footings being poured on 12-4-15

If I had worked a few days slower it would have been a disaster. Once the framers started the weather got cold fast. Temps plummeted to near zero for solid week or so and then we started getting snow. 

I think my framers started on 1-5, and they are just finishing up this week. This house should have taken them 3 weeks and they are going on 6 weeks because of the weather. I have mechanicals starting at the end of this week and I'm praying this current cold spell ( yesterday morning was 1 degree F) will lift soon so I can get roofing/siding done and move forward. Thankfully my client is very understanding.

The model home finished up right around the middle of January, and even with the horrible weather we have gotten a few decent leads. I worked with one couple for a few weeks and we are signing a contract with them this Friday. This will be presold #4. I had a very good 2nd meeting with another prospective client yesterday, and she brought 3 family members with her. Thats always a good sign. I expect to here back from her soon.

My initial goal was to sell 12 addresses per year. I really feel good about exceeding that number. 

I will try to get more pictures and post more frequent updates.

@Mike Campbell Demand in NWI is steadily improving and I expect sales to pop in the spring. I signed 1 contract in mid November and will sign another this week. Now our Sales model just opened a couple weeks ago. Even tho this winter has been pretty brutal we are seeing very good interest in the project. I had a 2nd showing yesterday and expect to be working with that person soon.

My initial sales goal started at 12 address sales/year. I expect to exceed that.  

Well your not going to want to hear this, but if your breaking even on the cost of ownership, your loosing money. Your carpet is getting worn, your roof is getting older and your not saving for future repairs and maintenance. And when you move on to the bank for the next property they are not going to be impressed that your first investment property isn't profitable.

But you made the move to get your first property so that the positive side.  Now you should be concentrating on making the first unit profitable. Maybe not tomorrow but some time in the near future.

Im not familiar at all with Canada and the financial side of investing there. But if you want to increase your wealth there is not better way than accumulating more real estate investments. IF this is the direction you want to go then I suggest you start researching different types of REI. SFR's. Multi's, and commercial space. Figure out which way you want to go. Then learn the correct way to analyze a property.

When I started out I analyzed something like 100 properties, just as a way to practice and understand all of the factors involved. Today I have 5 SFR's that cash flow very well. I have a LOC dedicated to purchasing these homes so I can make cash offers. I refi later after i do some rehab and get tenants in.

Hope this helps.