All Forum Posts by: Jaron Walling

@Evan Cruz The first property I bought was a BRRRR/house-hack combination. I choose that path because it was the fastest way to build equity and to cut my living expenses. It's possible especially if you already know someone that wants to live with you. My brother rented a room for 2 years. Remodel took 5-6 months. Found deals and paid cash for everything. I also planned to hold this property for long time. Ended up moving and renting as a LTR> cash-flow play.

For BRRRR type deals you want to work in reverse. You have to know the market and ARV. Without it you can't find/buy/create a deal. My first property was distressed, cosmetic+ rehab but it qualified for an FHA loan, 5% down. I looked a 7 properties all within 5 mile radius. Look in the "fridge area" C class zones. Contrary to what I read online my lender never questioned the condition of the property. People say FHA loans are more strict but that wasn't my experience. I believe it was because I had good track record with the the local lender, $25k cash in savings, and a property that appeared okay in photos.  

If you can find the right property, sacrifice for 6 months, it can absolutely change your life. My cost of living has be reduced on every deal since my first property. The American Dream is alive and well in this country but you have to make it.  

@Rick Zink You should lay out the numbers for this amazing deal. You'll get advice on which financing strategy makes the most sense. I could be wrong but I've always viewed HM as a "bridge" to get a rehab to the finish line. I'd not rely on one to fund the entire deal. 

Getting over leveraged in this market is a bad idea. 

@Zack Whiting We don't know your experience but jumping into auctions is not the easiest path for REI. You have to understand the market, neighborhoods, numbers, and realize the risks involved buying houses "sight-unseen". A lot of times you cannot view the property. Sometimes the property is owner or tenant occupied. There can be surprises and damage to the property. These are not simple challenges to overcome.

Auctions in our market they are dry. Can't say the same for yours. Not a lot of distressed sellers underwater on loans. Until that changes I don't see the advantage of attending auctions. This market is already difficult. Don't take my word for it thought. We're just clueless mid west investors not interested in buying bad deals. 

@Robert B Azimi If I'm in your shoes I'm meeting with the tenant in person to figure out what's going on. Just a none confrontational coffee meeting, "how's your family", what do you need from me so you can pay rent on time??  

You need more information. Late payment of rent is not a good sign. Do this before rent just stops, and you're a worse situation. Nobody wants that. Nobody wins if an eviction happens. 

@Robert D. Sounds like you have some options which is great man. You're so far ahead of the game. Owning paid off property is every investors dream but it comes with responsibility, management, and budgeting. That's why I mentioned involving the finance/wife in a future deal. Everything is a team play and trust me it ain't easy. My investing "speed" slowed way down and it was for the better. 

"to a tune of $15k and thought that was insane to pay." - Absolutely insane. I love there YT channel and informative videos but dear god it's just a LLC! Drop in the bucket for you most likely but don't over complicate it. Set one up locally, review insurance policies, and call it a day.

@Robert D. You should seek out and speak with a financial planner/estate attorney. Anything you own currently is not hers until you get married. When I got married I owned two properties (whoop whoop). My wife nothing but student loans and car debt. Together we bought a BRRRR deal, completed it, and got married soon after. It was a big test. Really established our finances and money goals. Money is the #1 killer of marriages. We have been married for 5 years and have since established a living trust and put all our assets into the trust. Any LLC we start in the future will be held in the trust. If nobody can see what's in a trust nobody will sue you.

You have three paid for properties. Leverage some equity and get into a deal with your finance. Get her interested in REI. That's what I was looking for when I got married because we're playing the long game! With our marriage and investing goals.

Worry more about your choice for a life partner and less about community property. 

"The franchise fees here would be $800 per LLC per year" - Don't sweat it. Put them all under the same LLC. Get an umbrella policy for the LLC if you don't think you have enough insurance on the rentals. That's what we did.

Cheers. 

@Danny Johnson Historically speaking condos are more challenging as rentals. 

You should read The Millionaire Next Door by by Thomas J. Stanley Ph.D. and William D. Danko Ph.D. 

It will give you an entirely different prospective on investing, time management, and economic outpatient care. I don't judge but it appears you're letting your daughter's decisions dictate your REI strategy.

@Chantel Holsather "the estimate I got last summer was $12000" - Did you mean to say $1200? Big is the deck?

If a contactor is replacing only the decking (boards you walk on) $12k is a ripoff. You should be able to build an entirely new deck with concrete footing for less. 

 I agree. Just have to stomach the higher rates for 2-3 years, break even (ideally cash-flow a tiny bit), and handle the PM during the roller coaster ride our President is putting everyone on. You can make deals right now but everything we see requires strong negotiation. Almost nothing cash-flows at current rates/rent/list price. 

@Rebekah Shields "Update the inside, up the rent. Then make foundation/roof repairs one at a time. Get rid of the property manager to save some money." 

This is the option I'd pick. 

It depends on your goals and being honest with yourself about being an OOS landlord. PM companies charge a lot and if you don't have multiple rentals why pay them? If you drop the PM and hold this property consider it a fresh start. You (we?) can handle the PM but you have to work together and run it like a business. When a tenant calls or texts you drop what you're doing and answer. That's the sacrifice to run rental properties correctly. 

The property needs some love. Either you're going fix it or someone else will, but you'll pay them for the privilege. It's no different than investors buying and negotiating low prices on distressed opportunities. It's in there best interest to do so.