All Forum Posts by: Leon Greene

Thanks for all the fantastic input guys. I really appreciate it!

Thanks @R.F. Plevy for the advice. I think my wife and I feel much more comfortable with the idea of going the route of just leaving the property in an LLC and pursuing financing that way. We want to treat it like a business from the beginning.

Thanks everyone!

-Leon

Thanks for the advice @Dan Perrott. I think we are going to take a conservative approach and buy the property under the LLC. We're not going to try to refinance out of the property for a while so that we can focus on learning the process, learning the tax accounting, learning how to work with a property manager, and learning if we even like the concept once we own it.

This is our "take the plunge" purchase to get over the analysis paralysis we've been in for a long time, so hopefully just being in the game will open doors and get us more involved (as well as be a legitimate tax write-off when I visit family down in Martinsville and drive for dollars).  Thanks Dan!

Thanks for the advice also @Randi Plevy. We're fine with personally guaranteeing business refinance, if it's a reasonable path. I think we want to leverage our strong personal financial situation while our business is new. I see that you also work in NYC; if we were looking for business financing down the road, would we need to be looking in Indiana where the property(s) and the LLC are, or could we explore options here in NYC since we live here? Is this where an umbrella LLC that manages the LLC's the properties are housed in comes into play? Thanks!

Hello everyone,

My wife and I are in the process of buying our first rental property in Indianapolis, Indiana, Marion County (we live in New York City). We are buying and fixing the property up with all cash, but we're hoping to be able to cash-out refinance the property when all is said and done (BRRRR).

It's our first property, so I'm not sure how much equity we'll build in the property through the repairs, so let's assume it's ARV is just what we ultimately pay in cash for it, which would be fine because it's got fantastic cashflow.

Our question is how do we purchase the property so that we will be able to refinance and pull cash out to buy another one, while still being protected from liability? We've already established an LLC in Indiana and we're planning on purchasing the property through the LLC, but our options seem so much more limited on the back end when trying to refinance.

I hear @Brandon Turner talk on the podcast about quick claim deed transfer after you refinance, but it sounds risky. Any advice from investors that have gone this same route or lawyers who have suggestions would be fantastic! My wife and I are both W-2 earners with good credit, so I'd love to leverage our personal situation in financing the first few properties before we get into portfolio loan territory.

Thanks everyone!

Hello everyone,

My wife and I would like to start building a rental portfolio through Brandon's BRRRR strategy. We also desperately need to move out of our tiny NYC apartment before we go insane. What we want to do to start seems to be a modified version of the BRRRR strategy, but we're not sure if it's a good idea.

We want to use a hard money lender to purchase a distressed property on Long Island (we haven't been able to compete with all-cash buyers going the traditional renovation mortgage route), fix it up using a combination of contractors and doing some of the work ourselves, rent part of it out (basement apartment) and we'll move into the main living space, then refinance into a conventional mortgage, hopefully with a lot of equity at the end with the ability to pull cash out. It would essentially be a BRRRR strategy, but we would end up living in the home in a house-hack fashion, for the foreseeable future.

At first glance, this sounds even better than a typical BRRRR because I would assume the refinance would be easy as we're both W-2 with good salaries and are already approved for a high mortgage through a few banks. I'm also assuming that hard money lenders would like the idea more than a typical flip because we already have the buyers lined up: us. The obvious issue of finding the property aside, are we missing anything here? Should we just stick with a traditional home-buying approach for our first home, and save the BRRRR stuff for investment properties? I should mention that we also have a solid amount of savings to bring to the table for the initial deal, if needed.

Are my numerous assumptions above on the right track? Would we be messing up any first time home buyer benefits with this strategy? Is there something big that we’re missing?

Thanks for any advice or comments! Love this community!

-Leon

I'd look at your neighbors. Are there other units in your building that are set up two bedroom at 700 sqft and rented to a family? As a working professional in NYC, I almost spilled my coffee when I read you were a mile from the train. I'd be willing to guess the unit would be more appealing to a family with a vehicle as a two bedroom. 

Another point to mention is the approval process for renter screening in your building. NYC coops can be extremely picky with tenants. You may just want to pick the path of least resistance based on what they "prefer". They'll never tell you the type of tenant they prefer directly, but after having multiple potential tenants denied, you'll get the idea. Ask around.

-Leon

Hello BP community,

Before I get into anything, I just want to say thank you to everyone who has given us advice on purchasing a two-family to owner-occupy in the Cypress Hills / East New York / Woodhaven area. We have learned so much from everyone.

Now to the subject that has caused me a lot of stress lately: real estate agents. Speaking from our own experience thus far, while we have met and continue to work with a few great agents, most have been less than great, many have bluntly lied to us, and one even insulted our ethnicities. I really don’t want to knock them because they are a crucial component for most home buyers, and can be a fantastic resource for investors,…

But where do real estate agents fit into the process when you are an informed first-time home buyer?

What I mean by informed first-time home buyer is a buyer that has done research on real estate investing, has read the major books, listened to countless hours of podcasts, has a good grasp of the numbers involved in analyzing and purchasing a house, knows what they want, and is realistic. Essentially, a buyer with the level of knowledge a typical BP community member possesses.

Neither party benefits from an agent “selling” the property to you because the property either is or isn’t what you want, and your calculations tell you which. There is zero room to be “sold” on the property and pressuring me doesn’t change the numbers, and also doesn’t fix the obvious poor renovation job that I would need to correct.

We have quickly become jaded by agents trying to walk all over us and assuming we don’t know any better. Have we just had really bad luck? What should we expect from real estate agents in this situation?

Thanks everyone.

-Leon

@Diana L. Hi Diana, what area are you looking? 1M is pretty high for ENY and surrounding area. Or are you going for a building with more units? 

Thanks for all of the amazing feedback and warm welcomes. We really appreciate it. I will try to respond to a few of you in one post:

@James Northrup Thank you for the advice James. We are actually very interested in the Cyrpress Hills area and plan on visiting the area this weekend and, hopefully, going to a few open houses. We have friends that purchased on Atkins and Sutter further south in ENY that are really trying to sell the area to everyone. Would you have a referral for a good real estate agent in the area? Thanks so much for your advice James!

@Scott Williams How is the Brownsville area now? I know it had the reputation as one of the most dangerous areas in NYC, but is it coming around? If I'm not mistaken, there are still some large S-8 housing projects in that area that were a big source of crime. Thanks for the info Scot!

@Sarah P. Thanks for the suggestion of Woodhaven. We have actually been overlooking Woodhaven because it is part of Queens, but still totally meets our criteria. The price of entry is a bit higher than ENY, but still worth a hard look. How far along are you in finding property there? Thanks for the advice!

Thanks again for everyone's advice. 

-Leon

Hello everyone,

First off, I just wanted to say thanks to the BP community for helping us learn so much about real estate investing. We feel like we have all of the tools and knowledge that is needed to make our first deal, and it's really because of this community and the podcast, as well as a few other amazing REI podcasts.

My wife and I are successful 9-5ers that are hoping to purchase our first property soon. We've been on the hunt with a real estate agent, scouring the various online real estate listings, and picking a neighborhood each weekend to "drive for dollars". 

Our goals on the first property are to find a duplex or triplex that will allow us to live in one unit and rent the remaining, with the hopes of living almost for free, and allowing us to save for more buy and hold properties. Our biggest challenge has been the fact that we live and work in New York City, and have been looking in Brooklyn, Queens, and on Long Island where the price of entry into the market here is so extreme. We need to stay near our jobs in NYC for any of this to realistically work, though.

We're interested in networking with others in the area that may offer some guidance, or even just want to have conversations about investing potential in the area. We're very curious about East New York and Jamaica, two towns that seem to be really on the upswing and are seeing a lot of investor money pumped into them. 

Thanks again for everyone's amazing advice, past and future! 

-Leon and Anna