All Forum Posts by: Kenny Kuramoto

I'm Looking for finding a BRRR or first investment property in Savannah. Any idea what's a good starting point on how much cash i need? I have a HELOC of 200k. Any agents who get decent off market deals? Thanks everyone

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Savannah, Georgia

I'm in the same boat as you as well. I have a 200k heloc but have an equity of 600k. I'm looking for Cashflow properties in Ohio at the moment. Looking at Kansas City next but need to find a agent. Look for a market you want to be in first then reach out to agents. I'm new to this so take my comment very lightly haha

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Quote from @Jay Hurst:

Quote from @Marcel Sunday:

Hey BiggerPockets Family! I’m back! Let’s talk about Savannah Georgia.. I’m consistently getting my clients 20%+ Cash on Cash Returns on Short Term Rentals in our area. I’ve helped Jabbar Adesada (Bp episode 357) get 3 Short term rentals in the past 4 months, I truly believe Savannah Georgia is the most underrated market in the United States.

Deal Breakdown:

Purchase Price: 275k

Initial investment: 60k

Airbnb Rents: $4500 (Conservatively)

Cashflow: $1500 a month

COC: 30%

@Marcel Sunday Does the city regulate STR rentals in any way?

They do. Only specific areas are allowed to STR. Mostly around Historic area. I don't invtest there I just know that part. lol There might be more areas though

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Congrats! I hope I can be like you one day haha

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Wichita Falls, Texas

I'm a newbie too want to connect and start sharing my experiences with me figuring how how to use this damn heloc haha. I'm pretty sure theres a bunch of people using HELOC to invest especially from Cali. I do want to start connecting with people while i start reading books. Let me be real. Not read but Listen to Audiobooks.

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San Diego, California

Are you going to include CapEx and Maint? If not you should tbh.

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Quote from @Dan H.:

Quote from @Benjamin Aaker:

HELOCs are a great way to have money ready to purchase a new property. They are more expensive than a conventional loan, so are best used for the down payment on a conventional - your second option. Seems to me that your insurance rate is low - your property will be non-owner-occupied so likely have a higher premium. I budget 5% for cap ex and 5% for maintenance. Unless this property is in need of a lot of work, your numbers for these seem high to me.
You should also evaluate why the cash flow you estimated is too low. This number is going to be different for different investors. But keep in mind that you'll be building equity and that's more important as long as you aren't in the red.

10% for maintenance/cap ex will never cover for that property. That would be 2 units for $170 or $85/unit. Cap ex on a kitchen not including appliances is ~$50/month. water heater is ~$13/month in my market (which requires a slightly more expensive water heater than other markets). Just those 2 items would get to $126/month for the duplex and we have not included roof, kitchen appliances, windows, bathrooms, flooring, paint, landscape and hardscape, electrical, plumbing, etc. You can calculate the cost of any item if you know the replacement cost and expected lifespan. Example for my market a decent price for water heater installation is $1600 (remember our heater costs a little more) and the expected lifespan is just over 10 years. $1600/12/10= $13.33.

In addition, using a percentage for maintenance/cap ex is a terrible methodology. I recognize many calculators use this method and it can work if the percentage varies based on market (rent, tenant class). If I have a 3/2 that rents for $2500 in a class C neighborhood and another 3/2 that rents for $5000 in a class A area, which do you think is likely to have the higher maintenance/cap ex costs. My experience is the finishes cost more in the class A, but the tenants are rougher on the property in the class C resulting in increased maintenance expenses and shorter lifespan on many of the cap ex items. This trumps the costs of the higher finishes, and the class C will have the higher maintenance/cap ex costs.

My cheapest maintenance/cap ex allocation for any of my units is $250/month. This is for an attached studio. Granted labor is a bit more in my market than many markets, but part prices are similar. This is in a class B- area. No way $85/unit will be enough unless you do every task yourself (new roof, all plumbing, installation of new flooring, etc.) and even doing all the work yourself I do not know if $85/unit would be enough.

As I live in San diego I totally get how micj more expensive it is to fix things here. Thanks for your input. So you do a high cap ex and a high maintenance on top of that too?

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Unfortunatly, I'll be investing out of state as the properties here I'm priced out of. I live in California so I can't even put a down payment on a property with that haha. ADU in my area costs close to $300/sqft. BRRR would probably be my best bet. It's just hard to find good BRRR as I'm just starting out so my eye's aint as good as others haha. There was a BRRR that came my way yesterday but I turned it down. $105k PP, $70k Rehab ,and $220k ARV. I think after calculating Rehab plus Holding and Closing Costs I will profit around $10k-$15k margin. Which might be too close just incase something else that's unaccounted for comes up. I guess for now I just gotta keep looking!

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Quote from @Benjamin Aaker:

Ahh ok I mistyped the insurance. It was supposed to be $100. I changed the cap ex to 5%. It changed the Operating Income cheaper of $30. The property has long term tenants so I don't have to do anything off the bat and tmfeom the pictures it's in decent shape. Thanks so much for the reply it reminded me about equity. Going option two will also have me still have HELOC to use..

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Ok. I have a HELOC of $200k I'm having a hard time figuring out how to start and scale. There is only 2 ways I can think of to make it work. 1. Buy property outright and just pay the HELOC off slowly. 2. Is put a down payment using the HELOC then have two loans. One conventional and the HELOC. Lastly is Flip properties if I can find one to build funds. There is a duplexI want that has legacy tenants but I don't think I can make it work. Heres the numbers.

Purchase $135,000

Rent - $1700/ $850 per tenant(they have been there for 10 years)
Property Taxes:$ 142

Insurance:$ 28

Property Management:$ 156

Maintenance:$ 170

Capital Expenditures:$ 85

Operating Expenses = $581

$1700-$581 = $1,119

Option 1 Pay off all through HELOC = $1,119-$1100 = $19 Cash Flow :(

Option 2 $1119-$672(Conventional)-$281(HELOC) = Cash Flow of $166 Too low, but i still have around $165,000 in HELOC to buy another one.

I may have to find something that cash flows more. Thanks everyone for their time reading this. I just want to start my journey already!

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All Forum Posts by: Kenny Kuramoto

Kenny Kuramoto has started 18 posts and replied 68 times.

Post: REI agent in Savannah GA

Post: What to buy with 500k Heloc?

Post: Most Underrated Market in the US (Savannah Georgia)

Post: Talk about Perfect Timing

Post: San Diego Meet ups?

Post: What do we do with our 1st investment? Help!

Post: HELOC Stuck on how to start

Post: HELOC Stuck on how to start

Post: HELOC Stuck on how to start

Post: HELOC Stuck on how to start