All Forum Posts by: Jess Archives

@Cameron Lam Inspiring! I’m hoping to follow your footsteps!

@Chad Daniel

I'm curious to know if you've started any process on working with out of state investors for Strategy 2?

For the most part, I have heard of the remote investor fronting all the money. I'm not sure what a fair share would look like if cash was fronted by the local party also. I am curious though.

Let's say the investor fronts 70%, and the local fronts 30% for the initial cash investment.

Property is then bought at $30k so the split is $21/9k

Renovations are $40k split at $28/12k 

This pushes the ARV to $100k allowing a refinanced cash out of $75k

Rents are $900 per month (Ideally $1000. But I'm trying to be conservative.)

What would be worthwhile given that:

Initial Total Cash Invested - $49/21k Inv/Loc

Non-Cash Considerations

1. Local's Connections and Onsite Management. 
2. Remote Investor's risk with larger initial cash.

Analyzing Splits:

Both parties should be paid a total of their initial contributed cash after refinance. The excess $5k split is undetermined.

The question then becomes, how do you analyze value for 

1. Investor's $49,000 of initial shared risk
2. Local's due diligence and $21,000 of initial shared risk

More simply put

1. Investor's $28,000 of initial shared risk
2. Local's due diligence and $0 of initial shared risk

This is where my estimates can be wildly off

• Let's assume the local party has an established system in place, principled by economies of scale. Managing this deal from start to finish would average 10 hours per week over the course of 7 months. 
• According to Indeed, a Real Estate Project Manager makes ~$46/hour
• So the cost of time would be $46 x 28 weeks x 10 hours = $12,880

If my wild estimates are fair, the initial investments would be

• Investor $28,000
• Local's due diligence = $15,120

or

• Investor $12,880
• Local $0

Naturally, the question: Is it worth it for both parties?

- In the end, there is $25k equity in the property, $5k liquid remaining, and $150/month cash flow.

- If the investor takes $5k liquidity and half of the cash flow, the CoC is 11.4%

- It could be more lucrative if the intent was to flip and funnel the house through turnkey after a year

Just thinking out loud here

Has anyone been able to build a local partner as a remote BRRRR investor?

There seems to be two ways for this:

1. Partnering with a Core Four team
2. Partnering with one local person who understands the core four partnerships

I’m more familiar with 1 as there are plenty of content I’ve read up on that. As for strategy 2, there seems to fewer anecdotal experiences I’ve read up.

Strategy 2 has many different ways, which makes sense. Though there are qualities I keep seeing:

• The remote investor fronts the money, the local partner manages the BRRRR
• At refinance, the remote investor receives the initial investment and splits the equity difference 50/50
• Investor and local partner can also share the rental profit

Has anyone had experience for strategy 2 or see additional qualities for this?

*Note: I’m a well researched remote OOS investor. Currently doing strategy 1 for my first property. And am interested in strategy 2 to compromise for a more hands-off approach without losing higher equity gains as in a turnkey strategy.

Hi all thanks for reaching out! Will definitely be keeping the advise in mind. I'm excited, but I want my first deal to be done well too.

@Christian Hansen Yup I am from the North Carolina area. I actually used to live in Raleigh until February. I live overseas now.

@Kayla V. A bit a late here. Was wondering if you able to find a lender to fund the $50k price point?

Does anyone have recent recommendations on banks willing to write conventional loans at lower price points ie $60k? Also, what rate range should be expected? Thanks!

@Henry Wang I'd be interested in that spreadsheet if you still have that available. 

@Penny Dun. Were you able to connect with an investor friendly realtor? I'm a newbie also looking into Cleveland as an out of state investor

Hi all. I've been following Bigger Pockets for three years now. This community has been helpful to get insights on how real estate works. Because of which, I feel comfortable enough to soon purchase my first investment property. But first, I thought I'd say "Hi" with this post to share/critique my process.

A little about me: 

I'm in the tech field, so Real Estate apart from second hand Bigger Pockets experience, is a foreign domain to me. As such, most of my investments have gone into a traditional 401K account. Until earlier this year - I became increasingly convinced real estate methods like BRRRR would outpace any indexed portfolio I have.

I know my first deal isn't going to dramatically affect my lifestyle. And because I'm investing out of state (from NC living overseas), momentum is going to be more important than finding the perfect BRRRR. Turnkey looks like the best option.

For Turnkey solutions, I'm seeing options for Cleveland, Indianapolis, and Kansas City MO at around 10-15% CoC with $20-30,000 total cash initial costs. Note for this investment I'm not looking into forcing appreciation, or refinancing as it wouldn't make sense here. Feel free to provide any thoughts!

Looking forward to further discussions!