All Forum Posts by: Joel Calkins

Hey there Nick,

This is the kind of market where you most likely have to make a deal instead of finding one. Whether that's off-market seller financing or driving for dollars. However, driving for dollars to me seems like a complete waste of time. There are an insurmountable amount of resources online to find distressed properties on the cheap.

Maybe call up some investor-friendly agents in your area and get the ball rolling.

Hey there Kelly,

According to the City of Chattanooga's official website "The Tax Rate is set by City Council each year as part of the annual budget process. The current tax rate is 2.2770 per $100 of assessed valuation. Residential and commercial properties are assessed at 25% and 40% of appraised value respectively."

Other than that I haven't seen any specifics on exact rates for rental properties.

When running deals I like to just use the average millage rate for the state. In Chattanooga, the rate is 1/4 Mill per $1000 of assessed value.

If you plan to get an FHA or some kind of first-time home buyer loan you most likely have to owner occupy. Even if you didn't plan to live in the property and rent out the units you would need to be upfront with the lender and will most likely pay more on the downpayment.

Remember if the home you buy is listed as a primary residence that it shows up on your license and postal information as well. 

One thing you could look into is renting the rooms in the unit you occupy, this could source some additional cash flow. 

Feel free to contact me with any other RE questions!

Hey Stephen, 

I believe Brandon made a video on pros in cons regarding incorporating for investors so check that out. As for paying yourself a salary, you have to confine to the IRS regulations and have to pay yourself a fair salary as I'm sure you already know. I have heard lots of negative things about refinancing and getting loans if the title isn't in your personal name. In some cases, you may have to get a business loan that has higher interest rates.

If you arent dealing with oodles of units then I would steer away from this potential headache or at least speak to a RE attorney.

As a new investor being strapped for cash seems like a common trend. Especially when applying the BRRRR strategy I like to calculate for a higher downpayment to get more out of the refi.

This being said in my opinion calculating a good amount for PITI and CapEx will give you a good cushion and mitigate the blow to your bank account. Also with the current moratorium on rent payments and uncertainty in the job market accounting for reserves has never been more paramount.

If possible find a deal that isn't on the border of cash flowing with all of your expenses paid for because in the real world something is going to break and tenants are going to screw you over. So plan for it!

Let me start this off by saying the building is HARD! And getting the permits and zoning required to do this especially in California is probably HARDER!

Don't let this stray you though, some of the best wealth to be made comes from hard work and sweat equity! As Brandon said in a recent BP podcast, "Run at hard".

The average cost for adding an 800 sq ADU in California is $150,000. So make sure you have the funds, and be prepared to go over your budget.

Also, you will need a very competent group of engineers and contractors, to do this correctly.

Do plenty of due diligence and give your municipality zoning board to get the ball rolling.

If you have any other questions don't hesitate to contact me!

Hey Caleb. Congrats on acquiring your first house hack!

What tricks have you learned so far? 

Would you recommend this strategy to other new investors?

Hey Charles,

Most likely it will need a dishwasher for an FHA buyer. This is not an absolute must, however, it won't hurt you in the appraisal process.

Here's an FHA handbook that has helped me: http://www.fhahandbook.com/blo...

Feel free to contact me with any other questions!

Depending on the laws in your state the ways to go about this can vary. Typically the tenant has the right to withhold rent if the unit isn't livable only assuming if it's the landlord's responsibility. If you can somehow prove beyond a shadow of a doubt that they caused the issue, the tenant can be held liable.

Most states also give the tenant the right to break the lease agreement with no penalty if the property is uninhabitable by no cause of the tenant. 

If you are planning to maintain a good relationship with this tenant talk about options with them. Sometimes renter's insurance will cover hotel expenses while uninhabitable so ask about that too.

If you have any other questions don't hesitate to connect with me. Goodluck!

Hey Nakia,

With the current moratorium on rent payments, I would suggest having 6-12 months of cash reserves.