All Forum Posts by: Khari F.

Don't do that! Putting anything into a mailbox without being a U.S. Postal Service delivery personnel is illegal under federal law:

https://about.usps.com/news/st....

If you want to leave something attach it to the door.

I spent 80 hours Driving For Dollars and calling that list. I also spent 80 hours calling other lists (probate/pre foreclosure/tired landlords).

When calling, I got the same results. So I actually got better results with non Driving For Dollars lists because I didn’t spend that whole 60 hours driving around writing down addresses.

Also, I noticed that motivations for Driving for Dollars leads were the motivations for other lists (house going into pre foreclosure… mother died, it went through probate and is now vacant… etc). Wouldn’t they show up on standard PropStream lists? Or are PropStream lists missing data?

So why do gurus (Brent Daniels, Flip With Rick) push Driving For Dollars? I even use to hear Brandon Turner push Driving For Dollars on newbies quite a bit.

The competition also appears to be exactly the same. When I went on Driving For Dollars appointments compared to Tired Landlords PropStream list appointments, both seemed to have only a couple of competitors. So the NUMBER OF COMPETITORS for my Driving For Dollars list and my PropStream lists were EXACTLY THE SAME.

I’m seeing plenty of pre foreclosures, probates, people relocating for work, tired landlords, etc on BOTH LISTS (Driving For Dollars and non Driving For Dollars). So I know that lack of motivation is NOT AN ISSUE.

What do you mean by sell to a 3rd party lender? 

A solid mortgage broker would save you the hassle of looking for a lender that can fund your deal. You also put yourself less at risk of a deal falling out of escrow because the lender overpromised and under delivered. 

Maybe having two or three wouldn't be a bad idea if you are on a time crunch. 

Hey folks, 

I'm new here and researching SMF homes in Rochester (Edgerton) and I found something that might work for me, but I'm not sure if I'm thinking about this correctly. 

The asking price is $80k and I'm securing a conventional loan with an assistance loan for the down payment and closing costs. There is a tenant in one apartment paying well below market rate. The realtor suggests that I could rent it in current condition for $1,000 in this neighborhood and this checks out with the rents I'm seeing. Unfortunately, the existing tenant is in the process of being evicted for non-payment since June, though I can afford the expenses on a monthly basis without tenants, including mortgage, insurance, and utilities, etc, as well as savings for vacancies etc, so I feel relatively confident that I can manage if the eviction takes time or if I can't find a new tenant for that apartment immediately. 

The other apartment will be mine and I will be renovating slowly with cash to hopefully bring that rent up to $1,200 or so, however, I will be responsible for approx $650/mo if I only have one tenant while I fix up the other apartment. That being said, expenses at $650/mo will save me $500/mo on rent.

Any thoughts on this deal? I know it isn't perfect, but if I can renovate both apartments and raise the rent to market value then I estimate I will bring in at least $100/mo/door after all expenses. Should I take a loss for the time period it takes me to do my own renovations or do I ditch this deal? The renovations appear to be cosmetic.

Thanks!

 The math is straightforward:

If the cost of x improvement < [monthly rent increase * 12] / spot cap (investors targeted yield on cost), then make the improvement

For example: adding an electric ventless, stackable, LG washer dryer, including rough-in, will be about $4,500 that will, in my experience, increase rent by $50+ a month based on comps (market specific)

4,500 < [$50 x 12]/.075 (@7.5% cap rate = 8,000) -> for me, this improvement would be worth it. 

Rinse and repeat the above ⬆️ Done correctly you will be able to avoid over improving the property. Know your comps and know your reno costs. Hope that helps.

@Bill B. some really good points. The great PMs are marketing renewals 90 days out. The excellent PMs are marketing properties prior to the existing tenants moving out. I agree that DOM isn’t the whole picture but it’s a huge part of the picture. 

Don’t most investors assume 5% vacancy loss when they underwrite? That’s 18 days, not 40. 18 is good, 40 is bad. 

Now - imagine if there was a way to have full transparency and see these numbers for your existing PM or when you’re hiring one. Average rent, where they manage existing units, average days on market, average time to completion on maintenance, etc. This is what I’ve built and will be available later this year… 

Hi All,

I would like some advice on the best way to tap into the accumulated equity in one of my rental properties. I am close to owning the property free and clear in the next year. The house is currently worth 410K with my equity being ~370K. The monthly cash flow is ~$200 (I know this is suboptimal, but this is my first ever home that I converted to rental, so...)

My question is: Is there a way to tap into the equity of this rental while increasing the monthly cash flow using creative financing. I'll probably end up refinancing a couple of years down the road, so open to creative suggestions. 

Thanks

Amod

Hi Arnold-

Love the question.

Right now with rates being elevated, I do not prefer the cash-out refinance option because it locks in the elevated rates on the whole amount borrowed.

Personally, I like using a HELOC to pull equity from a rental and if you have excellent credit and keep the LTV within the lenders preferred guidance sometimes you can get a rate under prime which I actually just did myself.

There is no payment until you use it. Then, you could use part of it to pay the balance on the property stretching out the term or pay interest only for a while which will increase your cashflow and get you additional capital to use if you need it or to buy the next rental.

Plus, some lenders will let you lock the rate on the used part of the HELOC so it does not float up on you. Recommend doing that once you pay off the balance on the house. Look for a lender that will do this for you.

Happy to help!