All Forum Posts by: Jaron Walling

 Winter season. That's another reason we started looking again. We have bought two properties in the winter. There's less listings but less eyes on properties. Best of luck man! Maybe you find a deal you can't pass up. 

We have walked a few wholesaler deals, looked at the MLS, and sent a few letters (no where near enough) trying to get back into the market. I'm getting the same results. Lots of skinny deals, overpriced vs. sqft/layout, bad street, or a combination. Most of the distressed wholesaler stuff is the bottom of the barrel, C class, or worse. MLS has some opportunities if you can negotiate down on distressed property. That's a big ask though. We need more cash and need to quit looking in these locations. We found success there so it's hard to switch off the brain, and level up to better locations.

JD martin said in another post we have a log jam in the housing market with no end in sight. Federal debt and fear of hyper inflation has homeowners in a gridlock. Nobody with a 3% rate would sell (unless the economy forces them) and jump into a 6%+ rate. 

Profiting $23k NET would be a homerun flip in our book but to each there own!! Haven't found that deal yet. 

Without getting to political I'd say no. Everything that our newly elected president talked about during his campaign trail leads to higher prices. They already replaced the head of the EPA (sorry earth) and now have there eyes on Jerome Powell. They will try to cut the FED prime rate, increase tariffs, and shake up global trade. They have strings to pull and possibly both houses of congress to get it done. Nobody can afford higher prices but the majority of his voters don't understand tariffs, global trade, and basic economics so here we are. 

Cash-flow does not fit that equation. Prices need to come down or level out for a long period of time for rent to catch up. Unless you bought RE a few years ago, created equity via successful BRRRR, flip, or do a combination you're just playing the appreciation game.

@Grace Hartman Most of the time sellers offer credits instead of fixing repairs. It's easier to pay the buyer and let them deal with it. If the sewer is still functioning (sounds like it is) you get to decide what to do with the money. Maybe you change your mind and remodel the bathroom! Seller doesn't care they just want the house sold. 

@Grace Hartman I don't mean this in a negative way but you're in this situation due to lack of experience, terribly high contractor quotes, or a combination. Understand that, learn, and grow from this purchase. Tuck and point is NOT a $7500 repair. If your quote is that high it better involve a bigger SOW or other exterior repairs as well. Replacing a sewer lateral is easily a $7500 repair; it's probably closer to $10k, and personally I would have prioritized it over t+p. You need to place a value on these repairs and then pick your battles. 

From the sellers prospective you picked repairing/replacing bricks. You agreed to the $7500 sellers credit which is generous, and they are ready to close. Asking for additional credits could easily ruin this deal. Depending on your market, houses for sale, etc. they could cancel the contract and relist. Being a duplex that sounds pretty decent the odds are in the sellers favor they'd go pending ASAP. 

Homeowner deal with repairs and maintenance all the time. New or old every house needs work. My friends toilet just over flowed for 2hrs, leaked from upstairs, and destroyed everything below. Even with a professional inspection you can't predict the future. The only defense is saving, reserves, and insurance. Best of luck. 

@Dani Beit-Or It's my understanding you can't 1031 exchange a primary residence. Even if you could it all you're doing is deferring taxes instead of eliminating them. There is no minimum holding period for a 1031 exchange property (if you tried), but many investors recommend holding for at least two years to avoid scrutiny. The IRS focuses on intent rather than a specific minimum holding period.

The benefits of the primary exclusion out way renting your primary, deferring, and doing a 1031 exchange. You also have PM, repairs, vacancy, and capex on rental property. When you bake in those expenses renting makes no sense unless the cash-flow is insane. 

@Lawrence Adair That strategy can work but if you create road blocks for yourself why do it?

Seller or owner financing isn't ideal for BRRRR in my opinion. Few sellers are offering this right now. It's not common for normal homeowners to offer it. Distressed houses (what you need for BRRRR/flip) is not ideal for owner financing deals. It's a road block, a needle in the haystack, if you will.

Second, what's your personal saving and financial picture look like> do you have cash for the remodel while living in the property? Just because an investor/seller is willing to do an owner financed deal doesn't mean it makes since for YOU. You're going to need at least $5-10k for a down payment regardless. Most sellers offering owner financed properties want to sell, meaning you need to qualify for a new loan in the future (1-2 years) to cash them out. If YOU don't have cash to remodel (add value), what does that look like? This can be a road block for the buyer. Don't be in that situation. 

Look in your backyard. If you're renting currently have you talked to the landlord about selling to you? Maybe you can create a deal and you don't even have to move. If the numbers, location, and property condition match your goals there you go! It can be a win-win for both parties. Every house can become a deal but it's on YOU to find/buy/create it. It's not always advertised on the MLS like other houses.  

@Sean Conroy I'd 100% use some equity since you decided you're not selling the property. 

You can control a lot of aspects of the loan including LTV, length, type, and where to deploy the funds (BRRRR, flip, new construction). It's a win-win. If you buy the next deal correctly you won't damage the inherited property or kill the current cash-flow. You have options and that equals power. Don't take it for granted and don't take big risks with the money.

@Matthew Porcaro Duly noted. Thanks for the advice. 

@Brody Veilleux That's the big plus for HML; speed. If you use HML for the rehab get your SOW, contractors, and everything lined up well in advance. Get the remodel done, pay people fairly, and get out of HM as quickly as possible.

You got this man.