All Forum Posts by: Shawn Coverdell

This is an age old debate that can go either way. I have had a PM from day one. At first you are blown away by the costs, then after say 10 or 12 doors you don't seem to mind anymore. You just fall into a routine. Our cash flow is several times what I spend on living expenses. So my PM gets 2K a month. What would I do with it really? If I need to buy another home, I just refinance some equity out of another. I quit my day job that paid many times that amount and I am not about to take on Land lording for 2K/month!

A little secret, Keep your INCOME below 250K or so and tax time is a breeze. You don't get taxed on all that  equity, it just takes a little longer to get it into your bank account when needed so plan accordingly. Refinance in series (regularly) so You have the cash on hand when the deal springs up. 

Tonight we pack, tomorrow we head deep into the Glacier National Forest in Montana. We will not be taking any calls from stinky tenants, We will not be working on any toilets. My lap top stays here on this desk.

Boot and Reboot Bro. Get em gone. Pull up with a uhual and a

Outstanding! Keep up that routine again and again. In a few short years (goes by fast when working hard), you will be able to give your boss notice. 

Best of luck!!!

Interesting. I think what you are doing is a modified BRRRRR strategy actually. Normally a BRRRRR is purchased with cash, then refinanced on the back end to get your cash back out to yo-yo into the next deal. Most I did was 5 in one run.

It sounds like you are financing them and then refinancing them which is not actually but a BRRRRR but it is similar. Many people get that confused due to not being able to come up with the cash and don't even consider it an option, but it really is. We started with financing and refinancing. now we buy cash. MUCH better. can buy homes that cannot be financed normally. tarped roofs are gold mines!!! Just bought one for 40K put 12K into it. appraised at 100K. borrowed 75K against it and it rents for 900/mo.

save up the cash and try it. bought one on cell phone using verisign. No need to show up at title company because there is no note to sign. As is where is, call me and it's gone. Done deal. 

That is the advantage of a true BRRRRR transaction. It's free and clear. Just call up your banker when it is rehabbed and rented and they will do the rest.

Let me know how you like it.

Shawn

Homes in the Hood

Not sure. I have a non-conforming Home in  Longview WA. One of the last alley houses. In fact I call it my BOGO deal because we bought 2 of them side by side. Separate lots. Both houses literally touch  the alley property line. You can hear the gravel churn while in your living room with each passing car. City has a code that if utilities are not on for a 12 month period they will never be able to be turned back on. in other words no occupancy for 12 months means it is no longer eligible to be occupied again. Both were in the worst condition imaginable. 

Because of these issues, we picked up both houses for the price of one. Flipped the worst one to pay for both. Then took the best one and fixed it up real nice and it now rents for 1,100/month. with about 20K into it. next we financed out to pull out 75K! (appraised at just over 100K)

took that and bought another, refinanced out of that one too. 

Not sure how you would measure that in terms of risk but it was enough to convince me to wipe out my 401K (pay taxes on it) and get it into more low end rentals.

Hope you have similar results,

Shawn

Don't let your tenants know you are the owner. I am just maintenance, mowing the lawn, filling in for Pedro. "cute dog, how old is he, where did you find this little cutie." ……………

Then, if in Washington, have your PM deliver a 20 day no cause notice to vacate.

If your place is nice, there are plenty of non-scammer/non-entitled folks who would love to make it there new home. 

Go with your gut, you already know they are lying to you. Boot and Reboot.

If you are self managing, change that, or sell it to me. 

Dennis and Kiley,  Once they are rehabbed we turn the keys over to our property manager. They place the tennent and take it from there. We have it ,set up so that I am notified of any needed repairs (all repairs require my authorization). How I retired so quickly, was by doing all repairs ourselves, but this year we are hiring all repairs out on occupied units. We still do our own rehabs.  First we enjoy the work, secondly. To contract out would cost us 30K do do what we can do for 4K (and few hundred of our own man hours).

I think it is easy to make to much out of it when thinking of management. Hire a PM, get quickbooks, buy tools, Youtube. GO!!!  

You could hire it all out if you wanted. many do, but keep working for the man for many years.  I think this is a race actually to some extent.  You will die, and before you die you will run out of physical ability most likely. For me there really was not time to hang back and research. My motivation was being surrounded by old people still working in cubes. I freaked out. I just bought a duplex that was cheap. one side was profit (sort of). I realized I needed several of them, or doors rather to replace my income. I worked an average of 80 hours a week for the man in between each property at first. Maxed out my rehabs for max equity. maybe 2 years or so into it? I was able to start refinancing. Started buying for cash. I think the biggest take away here is that I got that equity, not a bunch of contractors if I had hired them. Remember every 10K becomes 100K pretty quickly when your running this race.

I don't quite understand it but there is something that prevents people from doing this. I tell everyone look do this. and there all excited and there gonna do it right?  then...... they don't do it. It's weird. They just can't or something. My son is the only one who followed up. He is looking for door #3, and 4 currently. started less than 2 years ago. 

It's like there are all these encouraging remarks and questions and research, lots of pep talk but no pep. 

Sometimes I feel like we are becoming a nation of people who's goal is to not achieve. 

If everyone on here just spend 3 days reading on this site. and bought a property on the 4th day most would be successful. Even if your first one was not so great. It will not matter in a few years. Tomorrow will never come. In fact If I were you guys I would not even go to sleep tonight. figure it out and buy a property. 

with financing, your 25K becomes 100K with leverage. in stock market, your 25K goes up and down and all around, staying close to 25K. Kind of like one of those Indian casino's. You rarely gain, sometimes you might win, but you always loose your time sitting on those stools in front of a boring machine. 

Once you raise enough cash in realistate, you can BRRRR to obtain homes that you have no money into them yet they cash flow and appreciate too.

Try that with a stock!

I stared out financed my first few properties. worked 80 hours a week on a w-2 slave job until I had enough cash to buy a home outright. At that point I launched forward. only stopping to take breaks. The key is to .have cold hard cash in your bank that is not borrowed anything less is not really a true BRRRR deal. Just get the cash and do one without any lender. I promise you, you will never look back and can give your boss any finger you choose.

Many people on here are trying to shortcut this by using hard money or personal loans etc. Trust me it is not the same. 

The deals you need require you to close them quickly. You need to have them under contract within the hour. because this is a tight market and My guy calls me and I have to take it or leave it like now. or he calls number 2. Cash, AS IS, now, no inspection, fast close, send wire instructions please. 

Why else would they call you?

If you cannot do that yet, study up but start out with a financed deal. Much easier way to start. 

I would like to add. my wife and I have been through some tough times and we both agree that we are in a good position to survive the next downturn. We can drop our rents to half and not miss a steak dinner (we cheat and raise our own beef) but seriously, if you buy hood homes and make them nice as can be, usually requires you to do your own work to accomplish this. for the price. some are the nicest on the bock, I think I can maintain occupancy during the next credit crisis. 

I spoke with many F property investors who not only did not even realize there was a housing crisis, but were smiling from ear to ear like a teenager at a clearance rack, grabbing up as many deals as they could hold. 

"location, location, location" (kind of ironic isn't it?)