All Forum Posts by: Jacob Stevenson

Investment Info:

Condo buy & hold investment.

Purchase price: $163,000
Cash invested: $37,500

2bd 2bath condo that could use a facelift.

What made you interested in investing in this type of deal?

It was safe. We live in the area and knew it was one of the more desired zip codes.

How did you find this deal and how did you negotiate it?

We were actually going to look at another property. About an hour before going to see it, our realtor texted us that it was under contract but she had another (this) property that was falling out of contract that we might be interested in. We went and toured it and put an offer in that day.

We didn't negotiate per say. We offered 3k over asking but asked for the seller to pay 3k towards closing costs

How did you finance this deal?

Conventional Mortgage

How did you add value to the deal?

We didn't.

What was the outcome?

We got a property manager and the place was rented and cash flowing ~$200/month 2 weeks after closing. Currently cash flowing ~$300/month after raising rents.

Lessons learned? Challenges?

When we walked the property with the property manager, she suggested ~6k worth of rehab that would raise the projected rent $300-$500. We decided to wait to do that since we had just spent majority of our bank account and thought "Oh we'll just do that when they move out".
Now we're conflicted and hoping for turnover in order to do the quick renovation and increase our cashflow. In the future, we'll make sure to do rehab upfront especially if it can be financed.

I keep hearing that while you should be cash flowing positively, you should be showing a loss on taxes for your rentals. I've deducted every repair, interest, tax, insurance, depreciation, etc. that I have put into the property and I guess the straight line depreciation just isn't enough to push us into a net loss on taxes. Am I doing something wrong or missing something here? Thanks for any advice!

Hi BP community, I have been watching and listening to podcasts and youtube videos from BP consistently but I still feel stuck where I am, and so I am asking for your input as to what I need to look into or suggest books I should read. 

The last two-year run has been amazing for my family as we now have 3 SFHs in Austin, TX. Two SFH are being rented out and cash flowing very well since we bought them during the first wave of COVID. One of them is a secondary home and the other is an investment home. They have about 175k and 290k of equity, respectively. Our 3rd house will be a primary home and is a new build scheduled to be finished by end of this year.

I am a vet, so I am thinking about using the VA loan for the first time, but I'm still planning to put down 20% for the primary home. My ultimate goal is cash flow so I want to look at multi-family. For my next project (after closing our primary home), should I use my VA loan on this property instead and cashout refi on our investment/secondary property? I have never cashed out refi yet, so how will that affect my current cash flow?

Thanks for your input! 

I learned this the hard way too, if a renter reports a blocked or slow drain you have to specifically tell them (I would do it in writing) not to run any water until you get the pipe cleared. My renters ran a load of laundry on a non-draining pipe and it backed up in tub and overflowed the toliet. I paid the $650 cleaning fee ($7/sqft) for the bathroom and the $350 plumbing fee. The plumber was already scheduled to come in the morning immediately after they reported the slow pipe. I always check stuff out myself first, but this was like April 2020 (covid was new) and I didn't want any part of sewer drain line clearing. The plumber did retract the snake and there WAS wipes attached to the head, which they denied.

Not every house is on new lines or even to a sewer, so no wipes are not to be flushed and they were told not to in there 1950s downtown house.

Hi BP! I’m Ramon currently in the Army with 18 months till retirement. Currently having a home built in Colorado Springs and plan on renting it out and moving to TX after retirement. I absolutely love this podcast. Think it’s amazing on how friendly and helpful everyone is. Definitely a great place to get great advice and information. I’m looking forward to journey in real estate investing after retirement. 

 Jonathan,

Thank you for your info. I have also started in areas where I have someone I could get to be my eyes, so Southern Indiana (Evansville, etc.)/Louisville, KY, Ashville, NC area, and Sioux City, IA areas. Got distracted by desire to get it done. Have to do it right, not fast. 

Your advice is correct, and deal before area is cart before horse. Appreciate the gut check.

Phil