All Forum Posts by: Joel Harrison

@Jon Kelly

I’ll give the lender that I used to purchase the house a call to see what they say. This is great advice!

Thank you!

@Kalen Jordan

Another year+ has passed. And, what a year it has been.

I ended up finding an off-market deal on a distressed home in the Nashville area. My plan was to do a live-in flip, but many factors have changed my plans. First off, there was/is a lot more going on with this house than I realized, and I feel like I’ve bitten off a bit more than I can chew repair wise. Also, my main job got twice as busy, so less time to work on the house. Then, the pandemic hit, so all of the finances that I had been saving up to throw at renovations had to be held in case things got REALLY bad. And, well, I did get furloughed. So I feel like not spending that on the house was a wise move. I did find temporary work that helped buffer the finances, but I still had to dip into my savings a bit.

Things are finally starting to ramp back up for my “old” career, and things are looking up again. I’m more motivated to get things done, but materials are almost three times as expensive now. Fortunately, I do have cabinets and new appliances for the kitchen in storage, so that’s a pretty hefty bit of the budget for the kitchen. Just gotta get flooring and a little bit of sheet rock.

I also plan on re-finishing the basement, as the PO did a very poor job.

The electrical in the house is a mess. The PO fancied himself a handy guy, and he definitely could do some things. But, all of his execution was very poor.

@Colleen F.

Thanks for the reply!

I failed to mention.. I have new cabinetry for the kitchen in storage. I still need to get flooring, a countertop, and a new sink. Then, labor of course, but I plan on doing most of that myself. Just not the plumbing/electrical.

I still have to get literally everything for the bathroom.

I’d like to get in on these low mortgage rates and do a partial cash-out refinance so I can get this ball really moving. However, this house I’m in is only partially finished, and I don’t have the finances to get everything done in a short amount of time. The kitchen is virtually untouched, and the master bath is almost completely demoed right now.

I have some money that I was planning on using to do the kitchen last year, but the pandemic made me hold out on spending as I lost my main source of income. I had to dip into those savings a little bit, but have recently brought it back up to my pre-pandemic numbers. My “new” job pays about half of what my “old” job did, so I’m a little bit nervous about spending all of that money.

Should I basically YOLO the cash into my house and do the refi, or keep the slow boat moving and do things incrementally as I had been? I REALLY don’t want to miss out on these low rates.

A short history of me... I became seriously interested in REI two years ago when a co-worker was telling me about his adventures in REI. He shared this community with me, and kept telling me his stories and showing me pictures of his investments. He has since all but quit the industry we used to work in together (I’m still in it), and has gone full-time REI. So much that he recently told me that what has now become a family business is acquiring a new property every month or so. I’m sure this is small potatoes to some of you hard hitters out there, but it’s incredible and huge to me. My friends father was a contractor when he was growing up, and he worked for his father through high school so he had that experience already. This seems like a huge advantage in the world of REI. As for me, my experience regarding any construction work was as general labor on a framing crew during a couple of summers in high school. Not much. So, fast forward to now, and I have bought my first house with the intent of doing a live-in rehab into a decent rental over the next two years, the first of which I am well into. I purchased the house in March. My girlfriend and I have done most of the work ourselves up to this point, but it’s has been mostly just cosmetic stuff. I did hire a friend of mine to help tear down a wall and put up a header beam in its place. Also to help build a wall for what will eventually become the master bath. (This house needed/needs a LOT of help.) I also had to get the HVAC replaced in its entirety. Duct work, unit, pump... EVERYTHING. There had been rats nesting in the old ductwork, and the pump was full of nest material and who knows what else. We lived with it for a couple of months before we realized the extent of gross that the rats had caused. Then the AC unit developed a Freon leak. It had to go anyways, so instead of throwing over $1K into the old unit that needed to be replaced within a couple of years anyways, I went full-tilt and spent $5800 on the all-new stuff. There is a house two doors down that just got scooped up by an investor who seems to be pretty well established in an off-market deal. We just noticed that the unsavory neighbors that were there had a giant garbage bin in the driveway one day, and it was filling with junk. Then, about a week later, there was a crew tearing out kitchen cupboards and walls and such and filling a new bin with it. So, a couple of days ago, I saw who seemed to be the crew chief out taking a short break, and went to talk to him. I thought that perhaps he was the investor, but he wasn’t. He told me that he is just the guy who runs the rehab crew for the investor, and that the investor is a contractor. He also showed and told me what they had done to the house. It was a TON! I was blown away that they could do so much and still turn a profIt! This got me interested in what benefits were to be had by being my own contractor. Also, what knowledge comes with earning that title. So, here I am. I’d like to ask those who are contractors if they recommend it for someone who is not interested in it for any other reason than for REI purposes. Specifically, my own investments. Would it be better to just develop a solid relationship with someone who is already a contractor, and just hire out the rehab work from now on? I will say that I still enjoyed framing out the walls and putting up the header beam, I am NOT liking ANY part of the drywall work or trim work. Painting is fine as well. Yard work is fine, though I’m certainly no pro with it. Is this just a matter of speed and efficiency at some point? We’ve been concentrating on the main living space upstairs at this point. I am very tempted to have a contractor come in and give me an estimate on the rest of the work for me. I had been trying to keep the rehab costs down to $15K or less, and I’m now at around $10K. I still have the kitchen, master bath and basement to finish. Not to mention a deck and some yard work. It doesn’t feel like there is less than $5K worth of work to be done, but then again, I don’t have much experience in estimating repair/renovation costs. That’s a whole other topic.

I don't take that as being mean at all. I have certainly considered that! I am, after all, not only a first-time investor, but a first time home-buyer as well! I know I'm not the easiest client they have right now.

This would have been FHA, 3.5% down, and I've been doing the math with a 5% and at 4.25% loan rates (5% just to over-estimate what's going out). However, I have moved on from that one, and found a decent SFH to start in. I decided that I really need to get some equity behind me.

Thanks for all of the input!

Here are the basics... I found an incredible opportunity for a duplex in an amazing location. However, I don’t have 20% to put down on the place with the math being worked out as a full-on rental property. I can’t make any real positive Cashflow on this property unless I can put 20% down. However, I CAN come out about even. Does it make sense to lock in the property (buy it), house hack it for two years, then refi? Unless something goes absolutely wrong in the market (Nashville), I should have some instant equity, and have even more when I refi, right? I don’t want to lose the opportunity to own in this area, but I also don’t want to sink myself with a bad investment. The hardest part about this is that there are hardly any duplexes that come up in the Nashville market, even fewer at a good deal, and house-hacking seems to fit me best. Would it be smarter/better to just suck it up, let this one pass, and continue to save until I have the 20% to put down on a future opportunity? Should I use what I DO have saved up into a flip to get that higher 20% faster? My agent is pushing me a little to go ahead with this one, as she sees the opportunity that it holds as well.

Let’s work with some hypotheticals.

Say If I found a property that is on the market for $170,000. I’m curious, so I look up the “property report card” on the county website, and it says that the total value is $195,000.

If I buy this property at $170K, does this mean I have instant equity?

Congrats on the green card, AND to more properties!!

I know this is a year-old thread, but I feel like this is all still very valid. I’d like to inquire about Murfreesboro, TN. I recently saw a list of top US cities to invest in Real-Estate, and Murfreesboro was #12. It also happens to be my home town, and I’ve watched it grow at a steady rate since I was a child. The local university is doing well, and there is a fair bit of new construction and expansion happening. Are there any turnkey companies looking into this market? If so, I’d love to be introduced to them. I’m a total newbie, as I’m still on the hunt for my first property, and I need financing. However, I’m committed and focused.