All Forum Posts by: Jay Dean

I recommend that you start out with some more research and reading.  I am a big fan of "set for life" by @Scott Trench "the book on real estate investing" by @Brandon Turner.

These books do a great job on touching on the key / core concepts.

If only I had read these two books +/- 20 years ago...

In the cash out / refinance portion of the BRRRR process you are not going to get full ARV for the rehabilitated unit. On the high side, you might get about 70% of the ARV (after repairs and upgrades).

You will not get all the money you want / need back during the refinance stage.

More importantly, I do not subscribe to really aggressive leverage.  If something goes wrong, you are far more subject to falling into a death spiral if things do not go as planned.

Do NOT wear the rose colored glasses if you are playing the leverage game.

@Megan Greathouse - Is there potential to hack this one?  I assume not because of your financing numbers.  Whether you hack or not, this looks like a pretty sweet deal and I am super jealous.  Congratulations.

My advise is to put your location / market in your post heading.

@Ronald Kielmeyer - You need to network and meet people that are already in the game.  You need a mentor, ideally one that will give you financial consideration for your "sweat equity".  If you have the willingness to do the hustle, you need to pair with someone that has the money and no time.

At the end of the day, if you make a few bucks and learn something you are one step closer to getting in the game yourself. 

Flips aren't for people with little to no money.

If you haven't already read "Set for Life" by @Scott Trench I recommend it.  I love what he has to say about a "side hustle" and your "financial runway".

Check this book out.

The squeaky wheel get the grease first.  The tenant agreed to the terms.  If they are late they get the late fee.  If you show any flexibility, you will be farther down the line waiting your turn to get paid.

People tend to hate collection notices, payment reminders.  The mere thought of getting a notice is sometimes enough to deter this behavior.

I say hold their feet to the fire.  If your property manager isn't doing this, they are not doing their job.

I already have my books on Quick Books.  Should I get setup with the bill / electronic payment system in QuickBooks to somewhat automate rent collection or do you like another service better?

@John Jackson

Are you willing to share to some numbers from a typical deal you have done with this format. 

I like the part of this where I can help out someone with a few dings on their credit but as an investor there has to be some upside to the deal to pursue it.

Thank you.

@John Jackson @Greg H.

What attracts me to this possibility is the idea that it could be structured with pre-determined appreciation and pre-determined / scheduled rent increases.  In addition, I collect a "down payment" lease option payment that I get to keep if they don't finance within a pre-determined period of time.  Also, in theory I have the future owner in the home as a renter.  They should be motivated to keep it looking nice, and I no longer have to worry about finding the next renter.  I also assume that the deal would specify that they are responsible for maintenance and repair costs.  Finally, I they walk I get to keep the lease option payment.

I believe the primary down-side is when the property appreciates substantially more than I project it will.

Am I clear on the concept and does this really work within State of Texas regulations?

Thank you.