All Forum Posts by: John Claborn

Great job, Jarrod. You’ll have to talk about this at our next Thursday morning group.

Nick Jones - Jones & Associates

Jared, Mark Murray with the Reside Team is my go-to. PM me for contact info.

Does anyone know current traditional mortgage rates for 15 and 30 year notes in Lubbock, TX? Typically, I BRRRR with ARV loans through a local bank for our investment properties, so I'm not up to speed on traditional mortgage rates. Before I start calling banks, I'd like to hear if anyone has any numbers from recent deals. Thanks!

Jacob is right on the mark. Everything in real estate is based on comfort level (not including actual numbers or legal ramifications). Agents that specialize in rental real estate are preferred, if not mandatory. You can't just use any real estate agent. If there is an agent that specializes in $500k+ luxury homes, they may not understand the investor market. Use a realtor that has sold to investors, and ideally, actually has an investor list. 

Attorney's can help you sleep at night, but they can also keep you up at night with their fees. I would suggest a property manager that is understanding of current real estate law. Once you have a large portfolio, enlist the assistance of an attorney to set everything up into an LLC. That way, if you're ever sued, they can't go after your personal assets. Attorney's can cost you more than the profit you receive from a property, so you have to be careful.

Our attorney is someone that we could not do without because he handles everything that we are not capable of understanding ourselves. They should be a resource and not a liability (financially speaking).

Agree with both assessments. If you can purchase a property without using your money, that's the best move. After you have a few, depending on your debt preferences, either use a LOC or refinance and pull cash out to buy more, or snowball the debt and get them paid off. Either way is great depending on your goals and your tastes for debt.

Kosh, with our BRRRR properties, I always get a contractor to go out with me on the initial look. I agree with Brian that you almost have to have a contractor on hand to give you an estimate unless you've done this numerous times and are comfortable assessing the renovations yourself.

The best way to handle contractors is to have them give you a bid for labor then you purchase the materials. You can price out and search for overstocked materials on FB and Craigslist to get the costs down. On your first property doing a rehab, it's going to be difficult to have a contractor that you can trust and rely on since you may not be aware of their work integrity. I think many investors would argue that you will go through some bumps early on by selecting the wrong contractors.

Personally, my first two rentals cost me about $10k because I just didn't know how to run a renovation project utilizing proper contractors. I took it as an education, and on our 3rd property, there were no added costs because of the learning curve. Unless you get lucky and find a great contractor (or contractors if you GC the project) expect to have some dollars come out of pocket after the project is complete. You will find a team to handle your projects in the future after you get your feet wet and understand the process.

Good luck!

I can speak for the character of Location rentals. I go to church with Dan, and he has partnered with some great people. Susan Backus is an insurance client of ours, and they are great people as well. I think that would be a great resource for property management in the local area.

@Michael Fortier Brad Smith is my corporate CPA who handles all of our LLC, syndication, etc. taxes. He offices next door to me on Slide and 80th. DM me and I'll get you his contact info.

Austin, I'm very familiar with this situation, and I know exactly which bank you're referring to. I would look at Happy State and Trey Weaver. They refi-ed a property of mine at 85% ARV in about 3 weeks. I'd also take a look at First United Bank, I believe my realtor mentioned they were now the source for quick refi's with ARV loan options. Don't quote me on the second one, but I'm fairly sure that's accurate.