All Forum Posts by: James Wong

thanks Steve!

 Quote from @Steve Vaughan:

A Heloc would most likely be simplest and cheapest.  That's what we have and use it as an opportunity fund in case something good comes along. 

Unlike a loan, the line of credit won't charge interest when not in use. 

Hey everybody!

I have convinced a family member to join the real estate adventure. (they saw a lot of success from me learning off BP!)

With a free & clear property, this individual is retired and receives pension benefits. This person lives in the f&c home. Individual wants to use the untapped equity from their home. Their DTI limits the LTV to 20%. Was hoping to get an LTV of 70%. Proceeds of this would be used to purchase a commercial property, effectively servicing the debt, and then some.

1) Is there a loan when the collateral of the free & clear property can be pledged as the down payment for a commercial loan? or,
2) Is there a refi loan that can qualify income of an investment property, not yet purchased? (requiring two loans to close simultaneously)

I am stumped on creative ideas here. Any input would be nice. 

Originally posted by @Nick D.:

@James Wong - How has your experience with CJRE been since your last post? 

@Snehann Kapnadak- did you ultimately go with CJ? I am currently looking for Kansas City PMs

Any insights would be welcomed! 

 It's been good. No problems. 

I have gone turnkey route and I prefer it. I run a full time business so I do not have the extra bandwidth to deal with management and maintenance. Everyone's journey into real estate is different. Have you considered house hacking? 

I can give you my experience with a tenant in place for a SFH. The tenant was in there significantly below market rate. I was fine with this since it was cash flowing on the first day. Tenant was also long term (over 5 years) with a lease expiring at end of year. I was planning on increase rent slowly but surely. During renewal time, tenant decided to vacate instead. I was able to bring the property to market rate right away. It took ~4 months to fill the vacancy. What I did not realize was the lease expired in the winter and that it would be a difficult time to find renters. I failed to take this into consideration during budgeting. In hindsight, I wish I paid a little bit more attention to the quality of the existing lease.

It is hard to answer your question without knowing your goals. But here are somethings I would ask myself if I saw in your position.

How much are you currently cash flowing after expenses? How much will you be cash flowing if you decide to split into two rental properties? Are you ready to manage two more rental properties? Selling seems like a good strategy. How about a 1031 exchange? How about a cash-out refinance and acquisition? 

Cheers!

Are you purchasing 100% in cash? Or financing?

Your 10% CoC and $200/door is achievable.

I acquired a SFH last year with 16% CoC and 300$/door. I am in the process for a duplex with same return and cash flow criteria.

Originally posted by @Snehann Kapnadak:

@Michelle Lutz & @James Wong Thanks for the insights!

Just wanted to follow up on this. This is my first investment property out of state. My SFH had a tenant vacate on 10/30/2019. Notice to vacate was received sometime in July of 2019. The time to make rent ready for fairly quick. I think it took a week for this. Today ( January 2019) the vacancy was filled with a move in date around the end of the month. My initial impressions was that winter is probably a difficult time to fill a vacancy. I think there were a total of 30 leads. 3 prior leads through November and December did not materialize (credit history, not following through with security deposit). I was disappointed that the pictures used for marketing were antiquated. I think I saw the same pictures used with the prior rental posting a few years before I acquired this property. I Acquired this SFH with significantly below market rate rent and was able to achieve market rate this January. I know that I forgot to switch the water utilities to my name and CJ properties helped me with this. They had to physically drive to the utilities company to get this done as the utilities company did not allow for deposits to be done online or over the phone. I did have to give a rent concessions sometime in December to try and generate more leads. It did help. Going through Christmas and New Years, the leads were silent. I have a 18 month lease now so the lease can expire in the spring/summer. Winter is much more difficult to fill a vacancy. The postings were advertised on a 4-5 internet postings. I only knew Of 1 of them. The other posting websites I was unfamiliar with. I think overall CJ properties did a good job of handling a tenant turnover for me. The bill to make rent ready was not outrageous in cost. Well that's my experience so far. Again I have no reference to the Industry standard of how long a tenant turnover should take. I'm not sure how many leads should be generated before having to reassessing rent rate or concessions. I think I saw some investors using 4% in their calculation for their vacancies. I think I would probably budget for 12% for vacancy in my future calculations. Additionally I think looking into lease expiration vs season may affect this number.

Originally posted by @Snehann Kapnadak:

Hi All,

Hope you're having a good week. Has anyone worked with CJ Real Estate in Kansas City: https://cjproperties.org/? They're a property management firm who's been managing units since 1987, according to their website. Any information you could share would be much appreciated.

Thanks in advance!

Just saw your post; I have a SFH with CJ Real Estate currently. I'm currently in process of tenant turnover. I can let you know how it goes as it progresses.

Best starting point is to check out local rules & reg with Department of Social Services. There will be many different classifications.