All Forum Posts by: Jon Kelly

@Alex Kehaya Nothing wrong with a low-ball offer and staying true to your numbers and what works for you. The only reason you wouldn't low-ball is because of competition. If there's no competition, the seller may be willing to negotiate off your low-ball offer. If there is competition, your low-ball offer doesn't stand much of a chance. 

@Francois G. Mostly psychological reasons. People are trained to work to pay down a mortgage and other debt to own things "free and clear." (I'm also a leverage guy)

@Will Fraser That's really fascinating and encouraging to hear. Would you be comfortable sharing a couple barriers to entry for the 75-108-126 units? Similarly to you, I hope to tackle those one day and would be interesting to hear your perspective on things that slowed you down and what you're doing to avoid it next time. 

I wish you luck on closing the 12-unit and 20-unit! 

What was the 1st (and maybe 2nd and 3rd) thing you did to scale your business from SFHs into MFHs of 16+ units? 

Next month, I will be closing on my 15th property and will have 33 doors. I started ~3 years ago and have slowly acquired properties every few months. I own SFHs, duplexes, triplexes, a quadplex and an 8-unit property. I'm interesting in scaling up and purchasing larger, 16+ units, MFHs. 

Thanks in advance for sharing your story and advice!

@Jason M. Typically, I don't mind debt, especially at 5% or below, but 9.9% is nasty... Can you refinance it with SoFi or another institution and cut the interest in half and then do option 2? Otherwise, I would do option 1 because it's a guaranteed 9.9% risk free return. 

It's good to see you're thinking about it the right way. I've seen so many people take the $$$ and buy a new car and just add to their debt... Just know that you can't go wrong whichever option you choose 

@Paul Ellerbusch Now you can retire and buy a yacht! Just kidding, congratulations! Seems like you gained a lot of knowledge and made connections in your area. Now your 2nd deal should be even easier. Good luck!

@David Latu Why don't you ask your sister if she's comfortable with you selling the property at any point? I wouldn't assume you need to hold onto it for 5-7 years or else "it'll ruin your relationship." Better yet, buy it from her now, then sell it within 6 months and split the $75k in profit with her. Win-win?

@Mark Yesa Yes, of course you can do that. While not quite a "BRRRR" it's still an effective strategy if your property appraises for higher than the purchase price. Increasing rents will increase property value. I would initiate the increase in rents and update your leases before going to another lender and asking for a 2nd appraisal

@Mark Yesa BRRRRs can still work while occupied, but in my experience they are best done on unoccupied and undervalued properties. If you used hard money and paid cash for the property a "BRRRR" without rehabbing can still work if you purchased the property below market value. For example, let's say you paid $350K for the duplex but it can appraise for $400K. You can pull out 75-80% of $400K or $300-320K.

@Jeff Peters 3% maintenance fee may be a bit light... no capex or property management fees? Loan interest rate 2.25%? Well done if you found a rate that low!