All Forum Posts by: Justin Webb

Good Evening Texas Investors,

I am curious as to the strategies some of you may use to generate a positive cash flow with your single family rental properties in Texas. It may just be specific to El Paso, but every time I run basic calculations, I typically come up $150-$300 short in monthly cash flow. The only strategy I've noticed working is financing the property for only 40% of its value then paying the rest with your own cash. The culprit is property taxes being close to 2.86%. The same house renting for the same amount and same expenses (P&I, Insurance, HOA, property management fee, maintenance, and reserves) however, has a lower tax rate 5 miles west in Santa Teresa, New Mexico cash flows $100-$200.

Maybe the best strategy is to not invest in SFR and leverage MFRs since the tax can be spread out across multiple units. Any thoughts?

Hi BP, does anyone use an informational packet prior to submitting a letter of intent and drafting the initial offer to create several courses of action or options the seller can select that creates a win-win deal. Specifically, after discussing details with a seller why they want/need to sell, and their minimum requirements (ie. seller needs to sell so he/she can relocate, but they have a mortgage of $X and need $10k to pay for relocation expenses) the investor can take that information and create several strategies like using seller financing, carry-back, loan on future sales, wrap-around, etc . Or maybe, there is only one financing strategy will work for his/her situation and this packet is your tool for helping the seller understand how the deal will work for them. Similar to a prospectus that we use with lenders and investors to request private money. Any examples out there?

@Shawn Ackerman Both examples are great! Each provide different perspectives that I can pull from in creating my own. Greatly Appreciated!

When putting together a funding packet or investment opportunity packet to present to private lenders, hard money lenders, family, friends, doctors, lawyers, etc. What information should I provide about the deal? Generally, what information are lenders looking for? What needs to be presented to show I have an understanding of what is required. Also, to let the lender know I’ve done some homework and express what will be required from them. Are there examples out there I can find to tailor for my specific investment opportunity?

Hello BiggerPockets friends! My name is Justin Webb, I'm a native of Georgia, however, I am currently stationed here at Ft. Bliss in El Paso, TX. I've been following bigger pockets for a few months now after it was recommended to me during a Rich Dad coaching session. 

Although, most of the concepts were foreign to me when I began, this community's wealth of knowledge has helped me learn more than I ever thought possible in such a short amount of time.

I inadvertently began my investment career a few years ago when the Army sent me overseas to Korea. I couldn't sell my house, so I ended up renting it out. After a couple of years away, I realized what had occurred. I know now I didn't do it the right way but I had no clue this would work out back then. My tenant covered most of my monthly PITI. It was still a negative cash flow, but several other positive things occurred that peaked my interest. When it came time to file taxes, the deductible interest the tenant was paying on my mortgage was more than the high annual property tax in Texas. CPAs can explain it, but it was a nice payday. Second, the principle was also paid down leaving me several future investment options I'm looking to explore. Finally, the value rose since the location of my home is now in a highly development area.

Needles to say, I'm hooked! Over the next couple of years I will be looking for deals and opportunities that eventually add up to create $5k in monthly cashflow either from buy and hold properties or owner financing. From there, Ill be able to begin investing full time.

I've done some research and know I'll be pushing a boulder uphill here in the beginning, but I look forward to the exciting journey as well as connecting and learning from many of you in the future!

Sincerely,

Justin