All Forum Posts by: Jake C.

Good luck, Curtis! Curious to hear which areas you are thinking of as well.

Alan, if I were you, and given the time constraints you laid out, I'd sit on that equity for now and wait to see what happens to the market in 2019. Having $3MM of dry powder during a potential downturn is EXACTLY where I'd want to be, not invested in a property that is simply treading water, especially in a more expensive market.

I am of course assuming a downturn, but there is no denying that even very active money (i.e. more time available to spend on adding value) is having a difficult time finding quality deals today. 

Another thought that comes to mind is JV'ing with a hard money lender. Get lines of credit on your two properties and supply a hard money lender with capital. Done right, you can net high teen returns with fairly low risk and remain reasonably liquid.

BofA offers 85% LTV on a HELOC. 75% sounds more like commercial loan LTV. There is no "difficulty" other than having the appraisal they commission equal what you think it should.

Start talking to banks.

The way I built my business was by splitting the profit with investors, while offering them a "preferred return" of 8%-10%. Preferred return can mean different things to different people, for me it was similar to what they call a "waterfall".

So:

Investor makes the first 10%

I make the next 10%

We split the remainder.

If the deal only returned 15%, investor gets 10%, I get 5%. If deal only returns 10%, investor gets it all, I get nothing. 

On juicy enough deals, this does a lot to comfort the investor as his risk is very low (assuming the deal is underwritten properly), as you only make money if he makes money. A lot can go wrong before his 10% gets eaten into. 

Travis, find a high net worth individual to back you on your first couple. Give him first money out at an attractive return. If you do it right, you will be able to get in and out of deals for the same or less than what you'd pay a hard money guy.

If I were you, I'd get a home equity line of credit on top of your mortgage. You can use this as a revolving line to purchase more property, season it, and then refinance to longer term debt. This won't affect the senior mortgage you already have.

Best bank for this type of debt will typically be one of the big ones (Chase, BofA, etc.). Start the conversation with whichever bank you have your personal accounts with.

I moved to Chicago at the bottom of the recession specifically to get into SFR. There was a MASSIVE dislocation between purchase price and rental price (there still is, compared to the rest of the nation).

Fast forward; bought, renovated and now manage about 600 of them, all in Chicago area. The focus was always cashflow, never appreciation. 

No use looking backwards but, if I could start over, I would have bought houses with less cashflow and more upside by concentrating on gentrifying areas. Also would have pivoted to multi family in 2012/13.

Not worth the brain damage. Federal liens are a nightmare; not even a tax deed will wipe it out. Run.

That looks like a good product. I am very curious to know how that works out for you, keep us posted!

 I think the scamminess is driven by the lack of personal detail and the amount of questions. I don't think many people will lie about their income if you are clearly stating that it is necessary and implying that they will be wasting their time if they can't meet that minimum. After all, they don't want to waste their time either.