All Forum Posts by: Tyler Weaver

Infinite CoC is a great metric. Once you can achieve that, the next thing to look into when comparing one investment option to the next is IRR. It takes into account how long you had the equity out in the field.

I really love the model you are in though. Something slightly better than the 1% rule, built in equity in what appears to be a decent neighborhood where you would have a good pool of applicants for. 

Most hard money lenders lend on both house and renovation. This is one of the main services that make them worth working with vs a traditional bank loan where it would be much harder to close on the loan on the current status of the house and they typically require more documentation on the construction funds as well.

As other said, hard money is expensive. Large companies like lima one capital, lending one, etc make it pretty easy to find their terms. They do take credit into account, but are mostly interested in the asset and the borrowers ability to execute.

Their interest rate and fees, you want to make sure you can execute quickly. You also need to make sure you have enough funds to complete the project, even if it runs over your initial estimate. 

As other said, hard money is expensive. Large companies like lima one capital, lending one, etc make it pretty easy to find their terms. They do take credit into account, but are mostly interested in the asset and the borrowers ability to execute.

Their interest rate and fees, you want to make sure you can execute quickly. You also need to make sure you have enough funds to complete the project, even if it runs over your initial estimate. 

It isn't terribly helpful for evaluating A vs B investment property decisions. Could help in determining if you actually like your investing model in the first place. Maybe you will find that after taxes, there is not enough cashflow and you want to save for a larger deal. 

For instance if you are at a marginal rate of 45% state and local, then your $250/month becomes $162.5. But then depreciation comes in and may increase that a bit. 

The other thing is with a mortgage, you are paying down principal at a similar rate to the depreciation. So on a cashflow basis they tend to wash. 

Probably more important than cashflow is trying to determine what the potential of the investment is on a 5-10 year timeline. So all cashflow, all principal pay down, all potential appreciation.

I am not a CPA, so not tax advice, but.. That does not sound accurate. Also, you can file amended returns after the fact if you have made mistakes. Definitely review this with a qualified professional and find out your options. 

Well you have accumulated 375k in equity in short order so it would seem you have found a model that works for you.

That is enough equity to build a pretty large BRRRR or flipping operation.

The problem I see with holding your money in equity and trying to use it on a downturn is if the downturn is significant enough you may find that your equity line of credit goes away during a liquidity crunch. To truly take advantage of a significant downturn, it is best to have the funds ready to go and to have existing relationships with lenders/equity partners who are also liquid and ready to invest in a downturn.

Depends how involved you want to be. You should probably look at it similar to how Brandon Turner suggests underwriting all rental deals to pay for management because at some point in the hold you may decide not to self manage. There is definitely an advantage to having someone that is minutes away rather than hours away to deal with things as they come up. 

The difference in business structure between completing flips with you and one other guy for the labor and doing 15 a year will require a lot of changes. 

 Congrats on your first 2 flips. Sounds like you did pretty well so far!

For your first one, and doing it remotely you are going to want to have someone cohost it. Realistically there is a ton of setup work and management that will be difficult to do remotely. If the business plan does not make sense paying the extra fee to have someone cohost it then it is likely not going to be a worthy investment.