All Forum Posts by: Jordy Train

@Taylor Frank I live just down the road in Lindsborg. My partner and I are looking for investing opportunities in Lindsborg and McPherson mainly, due to both our jobs being in Mac and him living there as well, but we have been checking in to Salina and Hutch as well. Property values seem to be a bit less in Salina/Hutch than LB/Mac, but with everything going on (as you have already mentioned) I could see property values jumping up around the downtown/Kansas Wesleyan area. The population has stagnated for a LONG time, sitting around 50k for 40+ years. That northern part of Salina is generally regarded as the "not as nice" part of town, but I could see that picking up too as the downtown rehab moves north up Santa Fe. 

My problem (as with most newbies) is available cash on hand to make a deal happen. We are currently rehabbing my primary residence with the goal to pull out $20k from a cash out refi to put into our first rental. Goal is to close by Jan 1 2020. Always interested in talking real estate; we haven't been able to find any meetups either. Like you said very little chatter from places other than KC/Wichita. Maybe this will be the start of something. I'll send you a connect request.

I am going to a meeting tomorrow evening with the intent of offering to buy a house at a premium to the client but would include the seller financing. All details of the deal aside, I am needing some help finding some resources for the nitty-gritty parts for the seller financing. Do we still have to use a licensed realtor to complete this sale? I have an attorney that can draw up all the documents but I am a little worried about the in-between details, such as costs associated with a title company, what all steps need to be taken before it transfers ownership, that sort of thing.

I have purchased my first home as a primary residence, but this would be my first acquisition as an investment property.

Thanks in advance!

OK so if I have 10k cash and there's a 50k purchase price, with a 10k rehab, I can't get a HML for 60k? I've never done one before so I am unsure

So I made the jump to PRO and have started utilizing the calcs to analyze deals. Just a general idea of what I'm trying to do...

This will be my first true investment prop purchase, which I'm wanting to BRRRR. The plan will be to have 10k saved up in a reserve account, and use a HML to purchase a house between 50-60k, put in a 10k rehab, and turn it into an 80-100k ARV.

My QUESTION is...how would you put it into the calculator so the acquisition loan can cover the purchase price and the rehab? OR I guess another question could be, is my strategy sound with these numbers listed up above to begin with?

Thanks in advance

@Andrew Frishman @Ken Virzi I'm part way through a process that I would consider a mostly BRRRR strategy...

Found a house on the MLS in my hometown. Meant to use it just as a normal primary residence but discovered BP along the way and I've got the bug hard now, so the strategy has changed a bit.

Asking price was 89,900. Agent negotiated for me down to 86,900, and the seller paid the closing costs. 3 bed 2 bath. 1700 sq ft. about a 100 yr old house. I used the first time homebuyer grant (not sure if that is a state or federal thing?) for $5000, with the stipulation that I have to live in the home for five years or will have to pay that back at a pro-rated amount. I got a 3% down 30 year ARM that started at 5.25%. We closed in August of 2018. I had to bring $4.35 to the closing :)

Since closing, I have painted the outside, removed piles of branches and rocks from the backyard, had six trees taken out to clean up a corner of the yard that was otherwise useless, and began tearing out the plaster and lath walls upstairs. There is a room without a closet that while I have the walls down I'm going to build a closet space so I can refinance it as a 4 bed 2 bath. I will also be having an electrician add more outlets and double check that the knob and tube is completely replaced (inspections came back that it was but double checking), plus I will re-insulate all the outside walls before putting up sheet rock. After that, the only thing I will have left is adding gutters before I go to refinance.

I have pulled comps in the area, and unfortunately since I live in such a small town I have seen 4 beds go for anywhere from 85k to 220k. Narrowing the search to ages of homes that are similar, close in size, and the big purchases (roof/HVAC ages), I've come up with a number I think the house is worth, which is about 120k. I feel like that is a conservative estimate, when compared to the other info I have. Hoping for 150k but not banking on it.

If we come back at 120k then I can refi at 80% LTV so my loan will jump to 96k principle from the 83k it is now, but since I will be getting a (much) better interest rate my mortgage payments should be about $50/mo less than they are currently, and I will also be getting that extra 13k cash back...minus the refinance closing costs. I have budgeted 5k for the rehab I described above, so my somewhat conservative estimate is I get back about $5000 in cash free and clear.

The goal is to have this property refinanced by August of 2019, so if all these numbers work out exactly like I just stated, I will have made $5000 to live in this house for a year. I have also house-hacked a little bit by getting my girlfriend moved in with me and paying half the mortgage. So I guess getting technical it would be 5000 cash - 4200 paid in mortgage over a year = 800 free profit.

This is probably a good example of a "base hit" for seasoned investors using the BRRRR method, rather than the home runs most people talk about. I plan to live in this house until my financial situation changes and I buy a nicer primary and will use this as a rental. My best guess is $1200/mo rent which using the BP calc would get me about $300/mo cash flow after I've taken reserves out. But that's probably a couple years down the road.

Also, from an emotional standpoint, can i just take this time to say OMG I AM NEVER DOING A LIVE IN REHAB AGAIN THIS IS SO TERRIBLE I JUST WANT MY HOUSE TO BE PUT BACK TOGETHER

OK, clarity question....

So, you calculate into your net worth the appraised value of the home as an asset, and the mortgage as a liability, right? Example: 100k valued home purchased with a traditional 20% down loan, so 80k mortgage, would equal out to a positive 20k net worth, right?

What I'm leading into more of this is, for people that talk on the podcasts about having a million dollar net worth, and champion the BRRRR strategy and staying leveraged....so essentially they have over 5 million in assets, but 4 million in liabilities, roughly, if they're staying leveraged?

Am I following this line of thinking correctly?

I update mine the first of every month. For me, I'm still paying down debt while attempting to save money for retirement/real estate. I actually start filling in the cells in my spreadsheet around the 20th or so and then start asking "ok, if i have any extra money, where can i be putting it to max out my net worth number?"

I treat it like a game and I'm going for the high score every month. Sometimes I probably spend too much time focusing on it, but its taken me to a better place so I'm gonna keep doing it!

Pre-ordered a couple weeks back, cant wait to get my copy in the mail!

This is more the thought process I was running on. The year long lease would be market value (or even slightly higher), and the higher amounts for shorter terms would both encourage a longer commitment but also it'd be a bit of a marketing ploy to make them think they're getting a good deal. 

For reference, I live in a small midwest town of about 3500 people that has a college with a population of 700 kids. If I buy in this small town it most likely will be a college rental. 

Was kicking around this idea today and wonder if anyone does something like this....say offer a one year lease on a unit for $800/mo, or you can get a six month lease for $1000/mo....month to month lease? $1200/mo. Obviously meant to incentivize people to stay long term. Thoughts?