All Forum Posts by: Joshua Jones

Hi Joshua, in theory that's how it is done. I'm sure a few others will jump into this post and outline requirements for conventional loans - however, another option for the refinance is a DSCR loan. You should keep in mind when looking at deals, that max LTVs for DSCR cash out refinances are typically 75% LTV (& 80% if a rate/term). Furthermore, if you buy cash there are seasoning requirements. These range from 3-6 months based on the approach. Using the hard money lender for the purchase/rehab is a decent option if you want to ensure you have cash reserves, it also drastically reduces seasoning requirements - using "other peoples money" is a popular option to scale.

Well I'm about leveraging OPM to get this rolling.

@Matthew Davies I just made another post about a deal I found. Would love your insight. https://www.biggerpockets.com/forums/92/topics/1133621-turn-...

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So I'm brand new to investing. I paid for the annual subscription to BP and have been analyzing deals like crazy.

Found someone that is a wholesaler for a fix and flip investor.

They have rehabbed a property and filled it with veteran tenants.

The numbers almost seem too good to be true. I spoke with the wholesaler and checked her reviews. All seems on the up and up.

Sounds like I would have to get hard money loan for 24 months, then cash out refi to conventional.

Again, almost seems too good to be true, but maybe this is how you find opportunities.

Email from wholesaler on the deal:

These 2 properties are the 5th or 6th of the same business model/investor I've sold now. Basically this investor takes ran down properties, rehabs them, puts vets into them and then gives them to me to sell as cash flowing assets. Once the pair sells and closes he begins on his next 4, & we rinse and repeat.

The quadplex is 100% filled.

Because we have done the exact same business model so many times, we know exactly how the expenses play out along with what these are going to net. I actually just sold and closed on 2 duplexes and a quadplex that was from the same investor, 4 months ago and then the last one 2 months or so ago. Those investors are in line to walk these as well.

Along with the purchase, I can also give a referral for the PM that works with all of these gov. rental programs, which basically guarantees a near almost zero vacancy rate. Another great thing about this particular business model is the fact that it's literally recession-proof! I'll attach the website link for these properties so you can look everything over. I can have the owner put together a P & L as well, if you'd like. I also have the seller that has his own property management company and offered free property management until next year.

If you move on the quadplex and close quick, we will give you the absolute BEST deal we're able to once that 1 is filled and signed. VOA is paying half of the rents on each one, the one tenant is that pays cash is a long time truck driver. We can raise the rents on one unit 521 B it will from $860 to $897 which is an extra $450/yr not including the $400/mo/garage.

And deets from their spreadsheet:

Beds/Ba

Sqft

Lot Sqft

Year

CAP

Type

Rehab Cost

Asking

ARV

$/SF

*Rents/Rented

Vacancy

4/4

1632

5445

1920

12.48%

Quad

$255,000

$328,146

$201.07

$3,614

Rented

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So, I'm new to real estate investing. I want the best bang for my buck and don't mind researching 100 properties to find 1.

I recently found a wholesaler in my area. Investwithben.com

Seems to be wholesale prices. Fixer uppers in many cases.

I've found a lender that has access to hard money for 12-24 months at 10-13% that will include rehab costs in the loan, then you 80% Cash Out Refi based on the ARV down the road into a conventional loan.

I've got some good leads on Rehab teams and Property Managers.

Is this a good plan? Find good deals, use my own cash/cash value/heloc for down payment, rehab, rent, refinance, repeat?

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Quote from @Nicholas L.:

1 agent. All the REIA meetings. All the FB groups.

You can do your own marketing direct to seller if you want. Or you can try to get lead flow from the above sources.

So, do I need one agent per area? Like I've got 2 decent areas within an hour of me. Most only do Indianapolis and not the secondary location.

Some have been in the biz longer and seem to have "off market" listings. Or access to investor lists.

Still not clear on how to handle the agent side of things.

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Appreciate the insight.

Can someone explain to me the best way to find the most amount of deals to look at?

Do I need to work with 500 real estate agents, join a bunch of investor groups, join all the REIA groups and see what comes my way?

If that's the case, I will do it. Just need to know.

Or is this why people get into leads? Lead generation for insurance is my main business, so I understand how it works.

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Quote from @Nicholas L.:

@Joshua Jones

well, 2 other things then:

1. "the only strategy recommendation for a newbie is 2-4 Plex’s, which every other investor seems to be doing as well"

they're not. they come on BP, ask a question, and then don't do anything. if you're serious, find an agent and go look at 50 properties.

2. if you're not already, go to REIA meetings. go to all the REIA meetings.

I'm ready to take action. I've spoken to 4 agents in the past week.

On that note, they all seem to have access to different properties.

Just joined about 10 REI Facebook groups. Looking up REIA meetings now.

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Quote from @Nicholas L.:

@Joshua Jones

OK - my recommendation, then, is an LTR in a place you can be in person and not thousands of miles away

good luck

Well that I certainly agree with about staying local. Plan to stay within an hour for my first 10 properties.

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Quote from @Nicholas L.:

@Joshua Jones

i have to ask. your "access" to 300K. is that 100% borrowed?

i have "access" to hundreds of thousands of dollars too... if I took out a HELOC on my primary, refi'd a few houses in my portfolio, etc.

if you're borrowing you have to beat the return on the cost of the financing.

here's a strategy no one mentioned: house hacking. can you house hack? If you can house hack, house hack.

Some of it is borrowed, yes.

Can’t do a house hack.

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Quote from @Alecia Loveless:

@Joshua Jones Analyzing the area you want to invest in may also help guide your strategy.

In my area probably 85% of the LTRs have been converted to STRs making LTRs a much better investment strategy to pursue right now. Basically if you put your LTR online for rent you have no problem getting it rented right away assuming it’s nice and in a convenient location.

Also in my location we only have 1 hospital so there’s not so much call for MTR. I’m sure there’s a few people that do it and do it well but it’s not just a strategy that I’d go out and buy 10 units to plan to pursue that with.

So by becoming very familiar with your area you can get a better idea of what type of housing is needed there.

I live near Indianapolis. We have tons of hospitals and big business and conventions.

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Quote from @Dave Foster:

LOL. @Bill B., no way "everything". But I do know that the 45 day period is the greatest causer of angst. @Joshua Jones, if your QI hasnt already given you these tips then take heart.

1. Treat the 45 day period not so much as an "identification period". but more as an "I gotta get this thing under contract" period. You can't change the list after day 45 so you need to work as quickly during the 45 day period as possible.

2. If you hadn't closed your sale already you could have used the time before you closed your sale to also search and get under contract. You can be under contract for your new property before your old property closes. you just have to close the sale before closing the purchase. Many of our clients will use the 30-60 days before sale to get their new property locked up.

3. Identify more than three - You can identify more than three as long as the total value of the list is no more than 200% of your sales price. So if you're buying same price point as your sale you could identify 4 and it could work.

4. If the tax is huge then put a Delaware Statutory Trust on your list as a back up. These can absorb your exchange and keep the tax deferred. When they sell in 2-4 years you can 1031 back into bricks and mortar if the market has corrected (another choice of several of our clients).

5. If you hadn't already sold your old property you could have done a reverse exchange as @Jake Andronico and others suggested. So you lock up your new property before you sell your old property.

6. If you can't find a good replacement then don't turn in a list and pay the tax - no one ever went broke paying tax on profit - it just feels like it.

The 45 days is so real that I actually put an entire section in my book on mitigating timing issues.

Thank you! I haven’t sold anything yet.

Just planning ahead.

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All Forum Posts by: Joshua Jones

Joshua Jones has started 10 posts and replied 33 times.

Post: Buying from a Wholesaler to BRRRR to LTR

Post: Turn Key VOA Property - Too Good To Be True?

Post: Buying from a Wholesaler to BRRRR to LTR

Post: Which strategy to implement?

Post: Which strategy to implement?

Post: Which strategy to implement?

Post: Which strategy to implement?

Post: Which strategy to implement?

Post: Which strategy to implement?

Post: 1031 rules 3 properties?