All Forum Posts by: John Cardinale

Good afternoon everyone! I'm hoping to find some guidance on evaluating potential spec house builds. Does anyone have any preferred formulas, strategies or tips for determining the maximum allowable offer for lots? Is anyone using CoC return metrics to decide this or some other ratios?

ok cool! I think it could be a neat addition! 

Hey everyone! Hope all is well with yall. I've done 2 new construction projects thus far, and plan to do more in the future to have some exposure to market trends and to have nice capital injections every once in a while to pay down on my LOC's. I like new construction more than flips as there are less unknown factors. I was wondering about methods yall are using to come up with asking prices for lots where spec houses will be built. Maybe this is could be a idea for a new BP calculator tool? As of now, I'm just working backwards, figuring out from my agent what Sold prices per foot the area can withstand, designing a house with square footage to match the neighborhood, making sure there's a large enough margin between what my turnkey cost is and what I think it will sell for, and then finally splitting what the $ left between what I can offer for a lot and what I wanna keep for profit. I'd love to hear about how other folks do this.

What's our motive behind preferring the equity over the cashflow? Is it because you know you'll be selling them in the future and prefer to recoup your profit upon selling? The one I'm doing could go either way. I think I'll have $45,000 in equity after completion with $130,000 outlay having paid $68k for house and putting $62k in renovations. Cashflow will be tight... maybe it will be positive by the skin of my teeth but I should have significant equity. I can afford to leave a little money in the deal and I can also aford to float the mortgage should I have a collections issue. 

Morale of this story is, there's no hard and fast rule. My project will be close to cashflowing and me getting all my money out. Each situation is different and so in mine, I'll decide to leave a little extra in the deal because its in an area I'm less familiar with, tenant base is somewhat more unpredictable,... thanks for all the responses! 

 Thanks for responding Chad! Sounds like solid advice. I think on this one, I will focus on simply getting all or most of my working capital back out and if I can do that and make the numbers work I'll be good. 

Hey Kevin, Thanks for taking the time to help me think through this situation. I'm definitely not retiring from buying properties and with my HELOC's being adjustable and near term rates set to rise further, it makes the most sense to do as you said and take out what I can to pay down those HELOC's.

Hello, I have a general question about financing my next BRRRR. Is there a general rule for how much money to leave in a BRRRR? What are the things I should consider? Is it always best to take out everything you put in and/or as much capital as possible? I've seen some folks say if you can still cash-flow at a LTV of 60% then do that. ATM, my stats are looking something like this. ARV $190,000. Total $ invested. $130,000. Potential rent $1400 - $1500. Thanks for anyone's help and advice! I should also note that I'm BRRRRing with funds from 2 HELOC's so 100% of these funds are borrowed at an adjustable rate if 8ish %.

HI Kenyatta, I'm in the new orleans area and am active in Real estate. Good luck starting out and if I can help please do reach out. I haven't been active hear but am trying to change that, expand my network, and share where possible. I have rentals in 70119, 70115 and 70127. Cheers! 

my issue is I've got a lot of equity in this property. Getting at is seems pretty difficult and I don't really like the idea of cash out mortgage because it feels very permanent and locked in. Maybe the permanence of a cash out refi would be good in a world where real estate sees decreasing values. Because I've only been an investor for 9 years I don't really know what that's like.