All Forum Posts by: Joseph A Henke

I am flying out to Williams AZ (near Flagstaff) in about a month to scout some land to purchase to use initially for off grid camper trailers/ tiny homes. I want to develop the land overtime and get some utilities ran out there but start off grid. If anyone has experience running an off grid vacation rental I would love any advice on starting this venture.

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Investment Info:

Condo fix & flip investment.

Purchase price: $98,900
Cash invested: $7,000
Sale price: $115,000

Lived in the property for a 1.5 years did some cosmetic renovations and benefited from price increases from 2020 to 2022. Profited around 10k on the deal after closing costs and concessions.

How did you finance this deal?

FHA

How did you add value to the deal?

Cosmetic reno

What was the outcome?

Modest profit

Lessons learned? Challenges?

HOAs suck.

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Chicago Title is a great title company and they are very innovative when it comes to giving agent tools, helping agents generate and market to leads. I use their Chicago Agent One app to run affordability calculations for my clients on the fly all the time.

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Houston, Texas

Originally posted by @John Clark:

Originally posted by @Joseph A Henke:

This year I plan to buy 2-3 houses for 50k or less a piece then use HELOCs to recycle the money and buy more. Are there any holes in this strategy that I am not considering?

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Closing costs, for one. The fact that you probably aren't going to be able to take out a home equity line of credit as soon as you would like, for another. The closing costs of establishing HELOCs for a third. I sincerely doubt that you would have much equity in houses that you recently bought, so what would you get a HELOC against? There won't be much equity relative to your expenses and transaction costs. Better to find one or two multi-family buildings and live in one unit while refurbishing the apartments and raising rents.

So in answer to your question, you are overlooking transaction costs relative to your purchase value.

It's not important to grow fast. It's important to start.

Thanks for the response John! I completely agree, I am just eager to start. I am selling off a condo that I rehabbed right now then I am jumping in. Mostly in it for the experience. Can you expand on transaction costs relative to purchase value? Are you saying that since I would be buying at the bottom of the market that I need to consider that the transaction costs relative to purchase price will be much higher than if I bought something more expensive?

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Chicago, Illinois

Originally posted by @Joshua Janus:

This is a great option! Using HELOC's to purchase additional properties to increase your cash flow is a common strategy. I would also look into the requirements of a DSCR loan as they are much less stringent than conventional loans.

Hey Josh! Thank you for your response. I will definitely check out DSCR loans because if I can financing something bigger I would likely do that.

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Chicago, Illinois

Originally posted by @Bartholomew B.:

Have you driven by the 50K and under houses in Rockford? You're going to want someone very familiar with the area to guide you in your property selection. These properties are likely in rough areas and need extensive work. Are you trying to get HELOCs on the rental properties? If so many lenders will have a 6 month seasoning period before you can take out a loan. I don't see any holes in your strategy but go into it knowing there is a lot of work involved in low price point rentals.

Thanks for the feedback Bartholomew! Yes I have driven it some but need to do more. I live about an hour away from Rockford. I have seen several houses on the MLS listed for around 50k with minimal work needed though I assume they are on the rougher side of town. My intention behind this post is definitely to network with other investors or real estate professionals in the area. Do you have experience in the Rockford area?

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Rockford, Illinois

Hi Everyone!

I am a real estate agent in the in the NW Chicagoland area. I work with many investors and I am ready to start investing in rentals myself. I am interested in the Rockford, IL area for the low prices and decent rental rates. This year I plan to buy 2-3 houses for 50k or less a piece then use HELOCs to recycle the money and buy more. Are there any holes in this strategy that I am not considering? I can't qualify for a bank loan until I am two years in the agent business so this is why I plan to leverage in this way.

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Chicago, Illinois

Hi Everyone!

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Chicago, Illinois

Hi Everyone!

I am a real estate agent agent in the in the NW Chicagoland area. I work with many investors and I am ready to start investing in rentals myself. I am interested in the Rockford, IL area for the low prices and decent rental rates. I plan to buy 2-3 houses for 50k or less a piece then uses HELOCs to recycle the money and buy more. Are there any holes in this strategy that I am not considering? I can't qualify for a loan until I am two years in the agent business so this is why I plan to leverage in this way.

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Rockford, Illinois

All Forum Posts by: Joseph A Henke

Joseph A Henke has started 9 posts and replied 24 times.

Post: Off Grid AirBnb Vacation Rentals (Glamping)

Post: Off Grid AirBnb Vacation Rentals (Glamping)

Post: Condo Live in Fix and Flip

Post: Need a Good Title Company

Post: Buying Houses Cash then using a HELOCs to buy More

Post: Buying Houses Cash then using a HELOCs to buy More

Post: Buying multiple rentals cash then using HELOC to buy more.

Post: Buying Houses Cash then using a HELOCs to buy More

Post: Buying Houses Cash then using a HELOCs to buy More

Post: Buying multiple rentals cash then using HELOC to buy more.