All Forum Posts by: Jared McCullough

I am just a small time compared to most. We run about 30 Units. We currently have 6 tenants going through the Pa version of the CARES Rent Relief Program. All are in some progression of application submittal or approval. 2 have already received funding for prior months but had to resubmit documentation for further funding. Most of these have drug out all summer long and many of these tenants haven't paid for most of the year. 

We are currently sitting over $20,000.00 in back rent and with the eviction order felt it was best to continue to try to pursue RRP. I call multiple times a week and get the same excuse about how they have 100's of applications and not enough people. As usual for a government ran program this is getting way out of hand. How long am I supposed to let these people live there without even knowing if they will be approved for funding or when I will get paid. There staffing issues should not be the downfall of my business as I have been waiting for months on many of these applicatoins.

Would be interested in seeing how others are fairing with these programs.
 

Was in the midst of a refinance in March when my lender suggested the most they could offer is Contracted Sale Price + Renovations. I am not necessarily going to complain because at least I am getting all my money back out but this really negatively impacts my prior strategy.

She implied that Bank Examiners are really crunching down on real estate lenders to prevent bank defaults. My initial thought was well then I will just go to the other lender I have used in the past. Unfortunately received the same response.

Anyone else running into this dilemma. Sucks because I was netting an average of an extra $20-30K from invested capital per refinance which was really fulling my growth. 

Wish I would have bought more last year and in 2019 is all I can say.... 

I have closed on (3) already this year but certainly weren't the deals I have been getting in 2019 and early 2020. They meet my basic criteria but I can't help but shake my head knowing I am paying more than I would like to be comparative to last year.

Even the depressed areas which normally have pages of active MLS listings it is now usually filled with pending houses. I am beginning to look at areas I once would have never considered.

If you are actively trying to build a portfolio unfortunately you can't just sit a year out but let's all hope things adjust. It seems like there are so many more people in the game lately too which I think is part of the problem as well. 

Following

My journey has shown a little differently but maybe I am just not talking with enough lenders. My brother and partner left his W2 about 2 years ago to focus on real estate. After getting his license and expanding his rental porfolio he still finds it difficult to get financing strictly based on the deal. One of the main reasons we are in a partnership is my W2/personal guarantee typically alleviates all of these issues for the bank. 

What befuddles me is he is able to show more earnings through his rentals/sales a month then my W2 but they seem so hyper focused on stability associated with W2 I guess.

Anyways my guess is there are lenders out there but I don't think you are going to stroll into every local bank and find they are willing to lend based on your deal/analysis.

Ryan,

Thanks for the reply. I have 11 properties between Indiana and Westmoreland county. Not sure I would consider that local as I am out in Chippewa (i.e. Beaver Falls) area. My partner lives near Indiana Pa so we are kind of looking on the 422 corridor for properties at the moment since inventory in our area is low. 

Last summer I was finding some killer deals on houses in New Castle but was really timid to even consider as the MLS had pages upon pages of them which really concerned me regarding potential to rent after purchase. I don't want to buy a decent place just to have it sit.

I have looked in the last month or so and seems as though now decent deals have been flying off the market failry quick. Not sure if these are out of town investors or if things are starting to pick up. I was more just looking for someone who actually has some properties in New Castle to give advice on how easy it is to rent a property there.

I have generally not had issues finding inventory in the other surrounding counties of Pittsburgh (i.e. mostly Westmoreland, Indiana) that being said Inventory has been somewhat limited recently in those areas.

I have been watching the mass influx of New Castle properties hit the market in recent years and have been timid at what is driving this. I have lived in this area my entire life so I am very familiar with New Castle and the associated demographics as well that within New Castle where the good and bad areas are.

More recently I have noted that a lot of the inventory is moving quicker but still plenty of good deals to be had. Not sure if there are out of state investors that have been keyed onto this area but the last year there certainly has been an uptick in sales.

Now to my question. At the moment this seems to be the best area for quality/price. You can actually buy some really nice houses for sub-$50k and the market rent I would say is comparable to most of the small rural towns outside of Pittsburgh. I am looking for someone who actually has properties in New Castle to hopefully just shed some light on me to their experience since they have been there.

Jared

I have generally not had issues finding inventory in the other surrounding counties of Pittsburgh (i.e. mostly Westmoreland, Indiana) that being said Inventory has been somewhat limited recently in those areas. 

I have been watching the mass influx of New Castle properties hit the market in recent years and have been timid at what is driving this. I have lived in this area my entire life so I am very familiar with New Castle and the associated demographics as well that within New Castle where the good and bad areas are.

More recently I have noted that a lot of the inventory is moving quicker but still plenty of good deals to be had. Not sure if there are out of state investors that have been keyed onto this area but the last year there certainly has been an uptick in sales.

Now to my question. At the moment this seems to be the best area for quality/price. You can actually buy some really nice houses for sub-$50k and the market rent I would say is comparable to most of the small rural towns outside of Pittsburgh. I am looking for someone who actually has properties in New Castle to hopefully just shed some light on me to their experience since they have been there.

Jared

Looking to re write my rental lease agreement. I was hoping a few people may be willing to share so that I could bench mark. Also what are some key attributes you think others may be missing based on experience. Thanks in advance.

I am on year (2) of my RE Journey with my brother. Last year certainly had its ups and downs but all in all I would say worked out. I ended up closing on what will be (10) Units. (1) Duplex, (6) Single Families, and (1) SFR that is being converted into a duplex. We were able to do light rehab and fill everything except (1) Unit of the duplex conversion and (1) SFR that was bought in December.

My main focus now is understanding how people with full time jobs scale the portfolio at a quicker pace than this. I certainly think we had the potential to maybe do another (5) but beyond that I am at a loss to understand how people are doing it.

Some background is that most of these houses are what I call light rehab (i.e. cosmetics, flooring, maybe a roof) and we do a mixture of self-labor along with finding supplemental workers where we can as professional contractors seem to be impractical somewhat from the economic perspective but more so lead time. You would almost have to be doing enough inventory to keep a contractors crew busy the whole year.

The paperwork alone for closing (10) properties then COFR these can be a decent time suck in of itself. Then managing the hiccups from what I call early turn on (i.e. we typically rush to get these up and running then work the bugs out after we fill the vacancy). I am just trying to identify people who are obviously more successful at doing this and understand for those that have a day job how they manage this additional workload on top but more so what methods/systems have they developed to streamline this process to allow them to scale quicker.

Say short term what would recommendations be for scaling from (10) properties/year to 20 to 30?