All Forum Posts by: James Allen

You should definitely sell! (assuming you haven't refinanced a ton and have a large mortgage balance) - I'm assuming you have over $1 million in equity, even at a 4% cash on cash return, you would NETTING $3,333/mo. You bump that to an 8%, you should be NETTING a $6,666/mo. That's Only cash flow. The principal paydown would be much larger, the appreciation and tax write offs would be better even with a weaker market because $1,000,000 down could buy a $4,000,000 property. In a market where you can reach the 1% rule, that's $40k/month rent vs $3,600. You just need to get to know your new market intimately so that you know what a good deal looks like. Fly out there, drive the streets, meet with potential team members, talk with local investors, etc. - Not to mention you'll avoid the headaches of California Tenant friendly laws!

The biggest hold up without question is the high interest rate environment we're in. Nobody wants to tap into their equity right now with 3%, 4%, or 5% rates locked in on investment properties. Tapping into your equity is the fastest way to expand your portfolio vs just saving up.
I'm sitting on a lot of equity right now that I'm not touching until rates come down a bit.  

The problem is coming fresh out of 2 & 3% interest rates back in 2021 to being in the 7-8% range is a complete game changer. As rates went down, investors were able to expand their portfolios faster because of cash out refinances. I utilized BRRRR Strategy along with just refinancing other properties with good equity positions back then but it's simply a different landscape today.

Yes, I was worried about making a costly mistake on my first property or buying a bad deal or in a bad area. A lot of this can be solved by doing the work upfront. Taking time to educate yourself on your market, drive the streets around your target zip code or area so you know the good streets, bad streets, and up and coming streets. Taking the time to speak to local investors and know what an average roi is for your area. In addition, run the numbers on dozens of deals yourself so you can confirm what an average deal, good deal, and great deal looks like in your market.  

I did this for a while before making my first purchase and this gave me the confidence I needed to move forward. I purchased my first rental out of state and it was a success and led to buying many more great deals. 

Thank you Chris!

@Josue Rosa - Awesome! I just sent you a message. I'm interested in hearing who you would recommend. Thank you

Hey guys,

I'm looking to do a full renovation on a 2 bed, 3 bath townhome in studio city, CA. Do you have any recommendations you can share as far as good general contractors in the Los Angeles , CA area? Thanks!

Thank you @Greg Kasmer & @Andrew Syrios, that was very helpful!

Hey guys,

I'm currently finishing up renovations on my first apartment complex (A 5-unit property). I'm looking to cash out refinance based on the new NOI. In order to get the maximum value, do they appraise based on a trailing 12 months or just based on where rents are currently at. Essentially do I need to wait 12 months after putting my last tenant in to get maximum appraised value?

Hey @Zechariah Gawthrop! There's quite a few reasons but in short it was a great market for a combination of cash flow and appreciation. Nashville wasn't giving enough cash flow for what I was looking for. I saw the upside with what was going on in Knoxville with all the fundamentals and redevelopments taking place and saw the cash flow numbers still worked to where I like them all while being in a landlord friendly state. So far I've been mainly focused on North and South Knoxville areas and recently expanded out into the Maryville area. 

Absolutely! I've done several BRRRR's in Knoxville and I think it's a great market for real estate investing. With that said, the BRRRR Method is getting harder and harder to make work on the back end especially with mortgage rates spiking and prices softening.