All Forum Posts by: Joe Cassandra

What an awesome journey :)

You guys sound tough but also have the patience to make sure you found the right property etc.

Keep it up!

I just completed 4 BRRRRs...

My perspective:

Results: 

- Got all cash (and some) out of 3 

- Had 9% of money left in last deal ( I knew from the get go I wouldn't get all money back)

All SFHs in hot areas of ATL. b-c class. 

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What I learned: 

1) Part of your math you need to include the rent you rec'd during the 6 month timeframe. 

2) YOU NEED TO BUY GOOD DEALS. I'm buying houses at 65-75% - repairs with a good rent-to-cost ratios

3) Yes, you will get your money back, but your cashflow per month may be lower than what you hoped (that's what I found with ours. For us, we don't take cashflow out each month to spend, we just leave it so we'd rather have all our cash back at refi and let the house run for 2-4 years without touching any cashflow)

4) You must know your repairs well (we get ours within 5-10% once done...and we're still relatively new.)

5) Find a good bank who can do it at 75% LTV (80% LTV if you don't get cash out).

6) Watch out for BS closing costs on the refi. I just got screwed on two of the houses. In return, I got 30-year amort. instead of 20, but fees weren't worth it. 

7) We got some help as we got appraisals as markets are as hot as ever (not huge jumps from our initial numbers, but a good 5%)

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I think BRRRR is awesome.

Just be realistic that "You can get all your cash back", but don't expect "I'll get all my cash, and then some so I get infinite returns, AND have a ton of cashflow each month."

I'm in North suburbs of Atlanta in Woodstock, Marietta, Acworth and Cartersville. 

Rental inventory is very low. 

For one rental that leased last June, the rents in area are already up 7%. Others rented out quite fast including one put up during Christmas.

I don't. 

I give at the beginning of the relationship when they move in ($25 for new light bulbs, maybe a card and a box of cookies.) Other than that, I do not except by answering promptly when there's a problem and always being cordial. 

Just doing those last things go a long way as you can't imagine how many landlords are terrible.

Sometimes, I'll have off-the-book agreements such as "If you pay on time and are reasonable, I'll replace this old stove in 12 months." I'm the beginning and end of deciding if they follow that, and I let them know.

Do you think it's possible for RE to appreciate much more. 30 years ago, most people could afford a house, and their prices were obviously much lower. 

Now, wealth is mostly in the older brackets with younger folks being unable to afford homes now. 

So wouldn't there be a ceiling at some point?

If you DO NOT: 

...want to be a realtor

...want to find your own deals a la similar to wholesaling

...want to work for anyone in REI

than your only other options:

1) Network to find money partners

2) Network with realtors

3) Do all this to find private money to fund deals

4) Do this to find potential deals

There aren't many other avenues if you're looking for quality rentals. In multi-family (as I'm finding), it's even harder to find deals without connections. 

So, maybe just start with meeting with as many people as you can.

Never "rush" to buy a house because you feel some non-existent pressure to do so. 

If you feel you're 'behind' others...buying bad deals will never make you go faster. Will only put you deeper in the hole. 

We started in 2019...looked for a deal for 6 months...rushed into a flip...lost 30k. 

Sure, we learned a ton of lessons, so we 'got some of that money back' in the school of hard knocks. But it's better to find learn on a better deal. 

...learn how to find deals. Better to invest cash into this than into bad MLS deals

...it gets easier

...find a private lender who can bring in money rather than borrow from a 401k (the worst idea you have unless maybe you're private lending it yourself...but that's a stretch too). 

...don't give up

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If all of this sounds hard, real estate is hard. But the returns are large.

My wife got into design consulting recently...and after I've been a 'freelancer' for the past 5 years, I had tips to share with her: 

1) Despite common belief (and fear), YOU the expert are in charge. Not the client. You take the reins. You don't let them add things to the scope of work without expecting more money. 

In your case, YOU are the boss. Not them. Fear of pushback or anything is not the way to go. Losing your cool with them on the phone puts you in a beta position.

2) Set expectations from day 1. 

Unfortunately, sounds like you've already wasted a bunch of time on the phone with them.  

I inherited a tenant a few months ago and they called me within the first 3 weeks at 4AM because toilet was leaking. 

First, I didn't answer the call. Second, I didn't call them back. 
Instead, I sent correspondence in writing to "train" them. 

Also, I told them directly. "I promise to make necessary repairs within 48 hours (and I sent someone out that day). In return, I expect you to abide by how we manage our properties. First, don't ever call me, especially in the middle of the night. All requests go through email. Second, this toilet likely has been a problem for awhile (it was and rotted the floor beneath). It is your responsbility to tell me before problems get out of hand or you pay for it." 

Haven't heard from them since except through email.

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Bottom line:

...you're the boss. 

...you tell them how things go. Do it in writing. NEVER interact with tenants on the phone. I only talk to tenants on phone once and that's when I'm screening. 

...if you don't have any legal way to get them out, someone recommended leaving X amount of envelopes with stamps and they can mail you a check. 

Then, be clear with them that because they're being difficult, tell them now you likely won't be renewing their lease. You promise to answer repairs ASAP. In return, you expect them to follow your rules. If they are willing to get on board, tell them you'll reconsider. 

Double-bottom line ---> you're the boss. Never let a tenant (or client) think they're the boss. 

Words NEVER spoken by a real estate agent: "Oh, that's a bad deal." 

...

Words ALWAYS said by REA: 

.."Now, is the time to buy!"

.."You're getting a deal on this!"

.."Better get your offer in...I heard from someone from someone else that another buyer is making an offer."

I do everything through email. It's less stress on you. It also doesn't let the tenant get on YOUR time. Emailing, they know you're the boss and will get around to it. Texts, people expect answers right away.

- I only chat on phone with prospective tenant after they've filled out a pre-screening questionnaire and walked through house

- All repair requests go through email. You don't want tenants texting or WORSE calling you unless it is a 100% emergency. You have to train them. I just inherited a tenant and didn't explain my maintanence process (my fault). 2 days ago, she called at 4:05 in the MORNING to tell me the toilet leaked. I shut that $$$% down right away. No repairs are that urgent they can't be emailed unless the house is flooding/on fire. 

Congrats on the new acquisition :)