All Forum Posts by: Jason Measures

@Grant Smith You're correct, I'm certainly not a seasoned investor! I'm really glad you were motivated by my story though. I continue to find motivation in other's stories along this awesome journey. Pertaining to the cashout refi, I'm utilizing a private bank here in DFW because they do not require a seasoning period on cashout refis, whereas traditional banks require a minimum 6-month seasoning period. Also, I'm getting 65% LTV on the cashout refi. If you're struggling to find someone to do a cashout refi quicker than 6 months, just call around to local banks and eventually you'll find one.

@Joshua Y. I have a group of investors that have become close friends and we're constantly talking about REI. I've tried to share with everyone I know about my endeavors as well, simply because my first deal came strictly from networking. You don't have to approach networking as an expert, but you want as many people as possible to know what your goals and plans are so your deal flow potential will maximize.

@Jay Hinrichs Thanks for asking that question Jay, as that's a really good point to mention. In no way would I ever try to take advantage of a seller in that way, but when we first met at the property and she began telling me her story, she became choked up and tears streamed down her face because she had no idea how she was ever going to get out from under the weight of that property. I'm sure it was sentimental for her, as she and her husband had lived there for 30+ years, but she was bleeding from the property and it was in such a distressed situation that she had no idea how to sell it. She had already moved into another home and was continuing to pay out-of-pocket on this property. She had tried to sell it but nobody could help her, so when I addressed the situation, I simply tried to find a solution that would help her out in the best way possible, while making it a profitable deal for me as well. The seller and I actually have a good relationship and she asked if she could see the property when it was completed rehabbed. When we went to see the newly renovated property, she was proud to see it taken care of so well and that it is now an excellent home for someone else. So, all in all, while it is an excellent opportunity for me, I do believe I was able to help her in this way, although I understand I am quite biased from this side of the deal.

@Sharon Tzib This is a property in Arlington near the Cowboys Stadium and Ballpark in Arlington. My private lender is a friend of a friend, who is a RE investor as well, therefore he did most of the background work on his own, as any good lender would. I'm on a 6-month short term loan with a 3% origination fee, which I paid out-of-pocket at closing, with no payments due until the end of the 6-month loan, which I will then pay him the entirety of the loan plus interest. I considered doing a simple rate/term refi after the rehab was done, but with the ability to actually pull cash out of the deal on a cash out refi, making my cash-on-cash ROI an infinite amount, I decided to go this route.

@Lucas Vaughn How I found the property is the best part because I didn't have to work for it at all. Through basic networking and sharing my REI goals with most people I interact with, this deal fell in my lap because someone heard about the seller's situation and they thought I might be interested. Turned out I was VERY interested! I've found that, even though I am not an experienced REI veteran, it is still invaluable to market yourself and network like crazy if you really want dealflow to happen. The key is not pretending like you are more than you are, but be vulnerable and honest, but be persistent and work your tail off! Anyways, I called the seller, met her at the property, and once she began talking about her situation and the property, it became glaringly obvious that the property was a huge burden to her and her greatest desire, far above a fair sales price, was simply to get out and never have to deal with it anymore. This is where I based my negotiation and her most desirable outcome was to have me take care of all logistics so all she had to do was show up to closing and receive her $5,000 check.

@Paul Timmins Something that has been invaluable to me is utilizing a rehab company instead of subcontracting the work myself. The company is a local DFW remodeling business named Finishing Touches. They provided me with a Project Manager and I had an online login to their portal, which I could access photos and a calendar of the progression of the work completed. While I paid a little more for this service, it saved me a ton of time and stress. At the end of the day, real estate investing is the vehicle I hope to obtain freedom from a job, not to have an additional job.

Totally messed up the mentions. Here's to a redo.

@Chris K. The whole process took around 2.5 months. My first contact with the seller was early January. She wanted three weeks to get her stuff out of the house so we closed on January 31. Rehab begin immediately after and was just completed, so just a little over 5 weeks (extensive rehab). Pre-leased house around mid-February and tenants are moving in this Saturday March 15.

@Cory Adams You can totally do it! There is always hope! I'm not special by any means. Stay PERSISTENT my friend.

@Chris K. The whole process took around 2.5 months. My first contact with the seller was early January. She wanted three weeks to get her stuff out of the house so we closed on January 31. Rehab begin immediately after and was just completed, so just a little over 5 weeks (extensive rehab). Pre-leased house around mid-February and tenants are moving in this Saturday March 15.

@Cory Adams You can totally do it! There is always hope! I'm not special by any means. Stay PERSISTENT my friend.

Thanks to all for the congrats!

While I am in no way an expert and very much a newbie, if any first-timers need any help or simply needs some encouragement to continue on and find deals, PM me and I'm happy to help in any way I can (although that may not be much).

Hello BP!

At the end of January, I closed on my first rental property for $5,000 total purchase price. The seller's husband had died recently and already moved into another house, so the property was a major headache and she just wanted to get out. She originally wanted $25,000, but after a few negotiation sessions, I was able to get her to accept $5,000 because I agreed to cover all of her closing costs and take care of the entire process, leaving her with $5,000 in her pocket and removing the burden from her life. I had read often about motivated sellers, but experiencing it firsthand was surreal. For first-time investors still looking for motivated sellers and high-equity deals, they're out there! Nevertheless, let's get to the numbers.

Purchase Price: $5,000

Rehab, Closing, Other Fees: $40,000

All in at $45,000 through a private lender

Total Out-of-Pocket: $1,714 for the Origination Fee and Insurance

$950 Monthly Rent with Tenant moving in within the next few days

Monthly Cashflow (after PITI, Vacancy, Maintenance, etc.): $450

All-In Amount after Paying off Private Lender and Refi's Closing Costs: $49,000

Cashout Refi Loan in 30 days through Private Bank: $56,000

Cashout from Refi back in my pocket: $7,000

ARV: $85,000

Equity Capture (after Cashout Refi): $29,000

Cash-on-Cash ROI: Infinite

For all the first-time investors out there, stay persistent and fight on because the deals will come! Tell as many people as you can that you're investing in real estate because that is simply how this deal fell in my lap. While I had to work minimally to acquire it, it truly just fell in my lap and I cannot be credited much for that portion. Keep going and they will come. Also, there are many details left out here but I just wanted to share the overall details to encourage you first-timers out there to see that it can definitely happen for you, if you want it to. Bring on Number 2!

Hey @Brandon Hall! The strategy you suggested was certainly my strategy as well until this super cheap house came along and threw a wrench in my plans (not that I'm complaining about a $5k house of course!). Have you found your first deal yet?

Thank you for the quick response @Minh L. My plan is to cash out refi after 6 months but I need to fund the rehab initially. While I could afford to fund the purchase and rehab myself, I do not want to tie up all my cash because I have two other deals lined up in which I need capital for. What do you suggest I do for the initial rehab loan? Private lender (I currently do not know of one)? Hard money? HELOC or HEL after closing (if there is a bank that will do that)? What do you think?