All Forum Posts by: Jonathan Small

Get a list 10 recent renovated sales in the area.  Contact the agent.  Ask who did the renovations and who was the work.  Reach our to the contractors and have them to walk your property.  The realtor may be interested as well since they will want to sell your house after it is renovated.  Networking :)

Don't look for a "mentor".  Find experienced people that you can develop a relationship with.  Talk with them.  Share your deals with them.  Help them in some way with their deals.  Bring deals to other investors.  

In short, these conversations lead to advice.  I get advice from my banker, local investors, real estate agents, home inspectors, and property managers.  None of these people are my "mentors", however I talk to them on a daily basis.

Hello Brian.  I primarily invest in rentals 120k and less.  There are many lenders that will finance these properties.   Most want the loan to be more than 75k.  You can also consider doing a portfolio loan where you put 2-10 properties together and get a blanket loan.

As far as appreciation, I have found these lower end properties are usually in an area that has a lot of rentals vs home owners.  As a result, your comps are from other investor purchases. 

@Grace Walser consider going on Zillow rental and see who is managing your competition.  Give some of them a call as if you are a renter and see who give you the best service.

@Shawn Sopic i am excited for you. I recommend you contact the realtors that sold the comps in your area.  They just sold what you are looking to renovate and sale.  They will be able to tell you what to add and how is the local market.  I also recommend walking current renovated properties so you can see what your competition is doing.  You will also be able to talk to the realtor and maybe even find out who did the renovations.  This will give you some contractors that you can use as well.  Best wishes.  send DM if you need to talk.

If you get a from 1099-Div from your broker then you need to file it on your taxes.

can you email me details?  [email protected]

A rent roll and current PM information would be great.

Hey @Lane Baker, I want to share what I would do with 50k HELOC at 10% interest. I would use the HELOC to renovate a fix and flip. The 50k could be used as part of the down payment and renovations. Once I resale the property I am paying off the HELOC. The HELOC is like your 50k partner or your 50k hard money lender.

I would use the HELOC to buy a BRRRR rental. I am personally looking to purchase and renovate for 100-120k and get market rent of 1100 to 1500. That would allow me to purchase and renovate using a combination of HELOC, savings, and bank loan. As soon as I can refinance I am paying off the HELOC and getting better longer bank financing terms.

I would also use the HELOC to minimize expense risk.  I want to make sure I have cash or HELOC money for need renovations, vacancy, and unforeseen expenses.

Be patient.  Only do great deals.  Run the deal by other professionals you trust so you are more confident it is a good deal and not you trying to force a deal.  DM if you want to chat.  Best wishes.

I am trying to evaluate buying dividend stocks versus another single family rental.  What do you think is the best option.

20k in stocks I am looking to buy:  Alteria Group (MO), Enbridge (ENB), Devon Energy (DVN), and Ford Motor (F)   on average they will give me 7.4% dividend or $1,480 in dividends per year.

SFH I am looking to buy: 3bd/2ba for 110k (purchase and renovation cost), 20k down, 1100 market rent for about $1,440 year cashflow after property management, insurance, mortgage, and taxes.

I am looking to  generate consistent income streams.  My two prevalent investment options are: dividend-paying stocks and single-family rental properties. While both offer the potential for attractive returns, they differ significantly in terms of risk, liquidity, and management responsibilities. I want to  delves into a comprehensive comparison of these two investment avenues, highlighting their respective advantages and disadvantages.

Dividend Stocks: A Passive Income Stream

Dividend stocks represent shares in companies that regularly distribute a portion of their profits to shareholders. Investing in dividend stocks offers several advantages, including:

1. Passive Income: Dividend stocks generate a consistent stream of passive income, providing regular payouts to shareholders.
2. Diversification: Dividend stocks can be easily diversified across different industries and sectors, mitigating overall portfolio risk.
3. Tax Advantages: Dividend payments are often eligible for favorable tax treatment, enhancing overall returns.
4. Potential for Capital Appreciation: Dividend stocks may also experience capital appreciation, leading to additional gains over time.

However, dividend stocks also carry certain drawbacks:

1. Fluctuating Dividends: Dividend payments can vary or even be suspended depending on company performance.
2. Market Volatility: Dividend stocks are subject to market fluctuations, meaning their value can rise or fall significantly.
3. Limited Control: Shareholders have limited control over company operations and dividend decisions.

Single-Family Rentals: Building Equity and Cash Flow

Single-family rental properties offer a distinct investment approach, providing a tangible asset and potential rental income. The key benefits of investing in single-family rentals include:

1. Tangible Asset Ownership: Single-family rentals represent a tangible asset with potential for appreciation and equity accumulation.
2. Rental Income: Rental properties generate regular cash flow from tenant payments, providing a steady income stream.
3. Tax Deductions: Rental property expenses, such as mortgage interest and property taxes, are often tax-deductible.
4. Potential for Capital Appreciation: As property values increase, the value of the rental property also appreciates.

Despite these advantages, single-family rentals also present certain challenges:

1. Active Management: Rental properties require active management, including tenant screening, maintenance, and potential evictions.
2. Vacancy Risk: Vacancies can disrupt rental income and lead to financial strain.
3. Maintenance Costs: Ongoing maintenance and repairs can be costly and unpredictable.
4. Liquidity Limitations: Selling a rental property can be time-consuming and may not always yield the desired price.
   
   What do you think is the best option and why?

Investment Info:

Single-family residence fix & flip investment.

Purchase price: $80,000

This was one of my first deals I purchased at the beginning of my real estate investing career. I purchased this property with the plans of fix and flipping it.

What made you interested in investing in this type of deal?

I was interested in this deal because it was in an area that had a lot of renovations and the neighborhood was transitioning into a positive neighborhood.

How did you find this deal and how did you negotiate it?

I found this deal from a wholesaler.

How did you finance this deal?

I purchased this deal using a hard money loan from a private lender.

How did you add value to the deal?

I painted the inside and outside of the property. We replaced the hot water heater

What was the outcome?

I lost this property to foreclosure. I was over extended in this property as well as other properties. The property was given back to the private lender.

Lessons learned? Challenges?

I learned I need to buy deals with a lot of room for profit. I learned to buy in areas that families with kids want to live in. I learned to use professional contractors and not unlicensed handymen to do large jobs. I learned to have multiple exit strategies on a fix and flip. I learned to have a team and get them involved in the project before I purchase the deal. I learned to have cash reserves to complete the project.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

no