All Forum Posts by: Kevin O'Brien

Finish the rehab asap and relist. Nobody wants a $500k project. 

@Kevin Romines

Also are the rates you were seeing locked in or fluctuate until closing? 

Hey all,

got a bit of sticker shock at 6.7% 30 year fixed with 5 year pre payment penalty. Prior loan was done literally a month ago at 5.5% and 3 year pre payment. Is 6.7% really market rate now? Plenty of experience already, great credit and property cash flows fantastically. I was hoping for like 6%. 

SELL IT! $1900-$1,550 = $350 a month net BEFORE maintenance. Thats $4,200 a year. But when your furnace goes out you won't make money that year. So budget at least $200 a month for maintenance. That leaves $150 a month leftover assuming you are self managing. $150 isn't enough for gas to fill my truck up. 

You will have roughly $120,000 in equity in a turn key ready to sell property. Best case scenario you make like $150 a month after putting money aside for that furnace and hotter heater and rent it to someone for 10+ years who will turn it back over to you in need of ANOTHER remodel. ALL for a 1.5% per year return. YOURE LOOSING MORE TO INFLATION! Please just so i can sleep tonight Lin promise me you'll sell that terrible investment and put the funds into Vanguard total market index fund. 4X return 0 work. 

Not sure where or why you went with your response. For what it's worth I've already replaced my monthly expenses with rental income. A professional REI should know how to BRRR as I said in my post. If they are expecting to be able to just buy turn keys and rent them as is they will obviously see lower returns for less work. I leave usually never leave my initial equity in my BRRR's after I refinance. At most maybe 5% so on a typical $150-$200K deal we are talking about less than $10,000. If I'm returning $7,200 a year on that rental and left $10K equity in it that's a pretty amazing return. I never mentioned appreciation because it's never guaranteed and repayment of loan isn't money you have access to so it shouldn't be thought of much. But of course they benefit the scenario. My SFR's have appreciated close to 30% over the past two years! That's more than my monthly cash flow. I like cash flow it helps keep businesses alive when times are rough. I'm a lot more comfortable knowing half my tenants could stop paying and I'd be fine. Can't do that with $200 a month in cash flow. And before you say I don't consider my time I spend less than an hour a month per rental to net $600-$700 a month. All I'm hearing from you is excuses. I did this in 3 years it wasn't easy but I think most people are capable of similar results.

IF you're buying properties that only net $200 a month while self managing you're buying the wrong properties IMO. I net 3 times that on all my SFR's that I self managing. So to answer your question of how long it would take for someone with a better strategy to net $10K a month self managing? Maybe 2 or 3 years if they hustle and have some initial investment to BRRR. Seems like you have ruled the idea out but for a lot of people its doable if they buy a couple BRRR's a year. 17 properties at $600 is $10,200. Should be doable in 5-7 years through the slower route. Beside imagine how much more you'll be making once some of these units get re rented while the expenses largely stay flat. In 20 years rent could very well be doable what it is today even at a moderate 3.25% a year increase while the mortgage stays the same. That investor that retires in their 50's after holding for 20 years might only need 10 properties to make the same money. Once they are paid off you'd be even further along. Its definitely a long game but I see no reason why someone who's able to BRRR a few houses a year can't get there.

Definitely came from outside. The holes from where the bullets came to a stop are all on the inside.

On Wednesday evening I get a text from one of my favorite tenants up until now that there's some cracking in some of the drywall in the ceiling. No big deal as long as there's no damage to the roof I think, as this is a very minor cosmetic issue. Orange peel can dry out and crack over time. When I show up yesterday evening to inspect the problem and check for water damage etc. I am pointed toward the fresh bullet hole in the living room wall and asked if I thought it was a bullet hole. Well, yes it sure does look to be a bullet hole. Not only one in the living room with another hole in the back of the house where the bullet kept going but a second bullet hole in her sons bedroom pointed toward the floor where he sleeps.

At first I though well damn I guess this area is a little more ghetto that I originally thought. But after looking outside I noticed a security camera pointed toward the street and front of the house. I am fairly sure this camera has been there for at least a year so it should have caught whatever occurred. When the tenant brought it up she seemed very nonchalant about the whole thing. If this happened to me with a camera my first call would be the police department. I feel like the real reason I was called were the bullet holes as the ceiling was fine. Up until now they have been model tenants that were properly screened. I am worried the 17ish year old son has gotten himself caught up in some unwanted trouble. Is it me or does a completely random drive by on a quiet residential street seem suspicious? The fact that she didn't call me or the cops when it happened lead me to feel like I am being BS'ed. 

Anyone have any recommendations on how to proceed? I planned on pointing out these inconsistencies when I go back to seal the two bullet holes. I know there's a fine line between making unproven accusations and pointing out inconsistencies that may in the end put her on guard and hopefully prevent future incidents like this. The only other time something like this has happened to us was several years ago in a section 8 house in the ghetto where the son who grew up in the house turned to be a gangbanger.