All Forum Posts by: Joshua McMillion

@George J Roth

I argue that you should not buy & hold at every duty location. First, my goal is to niche in one market that I currently live in and grow my business around where I want to retire. Having all my RE holding in one area made me more flexible to sell in the portfolio and scale up quickly. 

Second, not all markets are equal, and just because there is a military base does not mean the community has a diverse economic system. I learned this lesson the hard way when purchasing in LA two PCS's ago. While the rest of the RE market was on fire during 2020 and 2021, my SFH did not increase in value. Due to the DoD hiring over 80% of the local workforce and the slow to no appreciation, I sold that property and shifted my focus to a market that would appreciate and help me achieve my FI goals. 

Third, your business will become unscalable. You will have a GC, lender, REA, and PM for each state you buy. That becomes almost too complex for the returns you experience. I told myself that I would grow my business around my life, not my life around the business. I also wanted to keep it KISS (keep it simple stupid) and focus on one region. 

For rents, I use three systems. First, I look at comparables on the MLM and see what the fair market rents are. Second, I ask my REA, my PM, and an investor in the local area. Third, I use other RE programs like PropStream. 

Sincerely,  

@Rita Davis

This question is near impossible to estimate without seeing the property and understanding the material costs in your area. For example, we just replaced a roof with some wood repair on an SFH of 1000 SF in AL, and the total cost was $6,500. We chose a metal roof, which costs less, and used the same general contractor to do 90% of the other REHAB, which cut labor costs. 

My recommendation is to find several roofing companies and have them walk the property and provide an estimate. Most companies I have worked with will do this for free, and you can get a good idea of the repair costs and have open competition for the job. 

Sincerely, 

@Moaaz Malik

Networking on BiggerPockets is how I found my real estate agent. The reason I love this platform is everyone is already an investor or is getting ready to start. It shortens the learning curve and helps you find qualified personnel to build out your Team rapidly! 

Sincerely, 

@Moaaz Malik

We moved from California last December, but before we moved, we purchased the home that we currently live in, intending to turn the house into a rental after moving. I'm active duty military and move often, but this was the first home I purchased OOS and sight unseen other than Zoom. My first recommendation is to identify the primary and secondary markets you want to invest in. Learn the area, jump on google earth, start rating the high schools, find where the hospitals are, and where the large employers are located. 

Secondly, I recommend you start building a Team. I found that the most critical Team member is the agent. If you can find an agent that is also an investor, you typically can use their Team. For example, I used my REA's GC, PM, and preferred lender on the OOS home, and my REA was willing to be the boots on the ground because I continued to add value to him. I eventually found a new GC, but his recommendations for lenders and PMs were spot on after my due diligence period. 

Third, you have to have boots on the ground if you are doing value add plays. A GC will typically have a google folder with photos to update you on progress but nothing beats physical quality control inspections. I was fortunate to be moving during the OOS home REHAB and was shocked by how behind schedule they were and some of the corners they cut. Find someone willing to be a project manager and have then manage the cost/schedule/performance. 

I hope that helped! 

Sincerely, 

@Ryan L Grinstead

I focus on cost/schedule/performance based incentives. The general contractor I have created a relationship with has a boiler plate contract he used with his other partners and I modified that document. Contracts can be modified and essentially are a form of written negotiations.

Hope that helps!

Sincerely,

Josh

@Tim Monistere

BP has a rent estimation tool. It is not the most accurate that I have seen, but it is a start. Are you planning to manage the property yourself? If not, I would call several PMs and have them provide you an estimated value for rent. We just did a BRRRR and are in the renting phase. I relied heavily on the PM to determine the rents, but we also used other RE tools like primary MLS's and Prop-stream to pull comparable rents in the area. 

Sincerely, 

@Chase Coley

No worries brother and happy to help!

Sincerely,

@Erin Thrasher

I use Brandyn Cox of BMC accounting. He is a military veteran, specializes in REI, and can operate in all states. Below is his website.

https://www.bmcaccountingllc.c...

Sincerely,

Bigger Pocket's Family, 

Investment Info: 

Our third RE deal was a single-family home in Northern Alabama with a 3/1.5 split.

Purchase price: $110,000
Cash invested: $32,000 REHAB, $27K Down Payment, Total $59K 

This home was a rental that needed a lot of work, and I was able to place an offer before it hit the MLS because of our ROCKSTAR agent! Before entering the deal, we had our general contractor in place and an estimate of the repairs and upgrades needed. Overall, we had to put on a new roof, extensive landscaping, "60 years of growth never cut", new decking, new fencing, completely remodeled kitchen, updated fixtures and lighting, paint, electrical upgrades, and drywall repairs.

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

I am active duty military and am on a path to #FI. Sophia, my wife, and I have developed a plan of attack for acquiring rental homes in the primary and secondary markets based on where we want to retire. We plan to purchase one to two houses a year, and SFH is the niche of REI I enjoy. I also joined a great mastermind to refine those goals and keep pushing forward towards my designed life! This property has an ROI of 12% and CF's $627 a month after expenses. We also achieved a $250 increase in rent, which the property just rented this week!

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

My #rockstar agent that I found on BPs knew we were looking for a deal and sent us the home. We were able to place an offer while the house was off-market and closed! 

How did you finance this deal?

Conventional Loan with 25% down and a 3.3% IR. 

How did you add value to the deal?

$32K in upgrades to for the whole home. No room was untouched, and the outside also had significant work down. See above for the details I already described. 

ARV: $150, estimated to pull out $40K on the REFI.

What was the outcome?

Home is in the rented part of the BRRRR, and we are estimated to REFI on 11 JAN. New rents are $1250, which was an increase of $250, and we continued to foster a relationship with our core-four in the primary market we want to grow in.

Lessons learned? Challenges?

First, finding a great agent is the most critical aspect. If you find an investor-friendly agent, they often already have a complete team and will save you time. Also, if you use their team, you continually add value to your agent, and when that next off-market deal comes, you will be first on the list! 

Second, handling general contractors and holding them to cost, schedule, and performance. We were able to do a lot of work to the rental home and complete the REHAB in nine weeks using incentive-based contracts. Finding a contractor was the most challenging part, but when you find your GC make sure you treat them right. 

Third, we needed to purchase the property significantly cheaper to REFI all our cash invested. This was our first BRRRR,

and we will leave roughly $20K in the property. We knew that was the case going into the deal, but next time we are wanted to pull out all cash invested to include the downpayment and start using the velocity of money principle! Overall, we will be able to pull out all our REHAB cash invested and positioned to purchase our next rental in 1QTR or 2nd QTR FY22. 

Sincerely,

@Brandon A Reilly

Congratulations brother! I love seeing military members crushing it in the REI space! Reach out if you ever need anything, I saw you are separating from the military this year and know how challenging that can be, but it seems you have a well-thought-out plan. Keep pushing forward! 

Sincerely,