All Forum Posts by: Kody Fordyce

Daniel,

Welcome to BP! This is an awesome resource for new investors and seasoned alike. Are you looking locally or nationwide? Are you looking at flipping or Buy & Hold? I have experience in both local and in the midwest. Local is great because you can oversee the project from start to finish, although your acquisition cost is going to be high in San Diego and there are a lot of fish in that sea already. I live north of you in Portland and have run into the same issues. That is one of the main reasons I have mostly transitioned heavily to the Midwest ( Indianapolis, Oklahoma City, Kansas City, Jacksonville MS etc...). You are able to buy turnkeys for 20-30k down that will cash flow on average $300 /mo after "The Big 6" (mortgage, taxes, insurance, vacancy, management, maintenance) have been paid. You can then refi after 6 months getting about 95% +/- back out to move on to the next. We have also found as a company to only work with companies that have everything in house ( acquisition, contractors and  management) I stress management because that is crucial, as soon as they farm it out, it can lead to many headaches. Please fill free to message me or call me if you have any questions. 

Kody 

Anthony,

You are in solid REI state to begin, We have started investing in real estate in Orlando Florida because of the inventory and strong returns for our investors, both on the rental side and fix n flip. We are based in Portland Or and have a very tough market for new investors to break in to. Best of Luck!

Kody 

John,

I do believe the BRRRR method is a very viable method for people to ease into out-of-state real estate investing. There are "The Big 6" you need to keep as fundamentals in your spreadsheet to evaluate every deal.

1. Mortgage
2. Taxes
3. Insurance
4. Vacancy
5. Maintenance
6. Management

You are correct when you say that after you refi, your "returns" will be less. The key is placing yourself in the correct rental property / market (very doable). By doing a refi, you can place yourself quickly into the next project. Even after you refi the home in six months (seasoning period for bank) you should still see on average $300.00 +/- per/mo  for a single family home after "the big 6" are taken care of. Again, this is very doable. You also mentioned vacancy or not being able to fill the property. This should lessened if you've been directed / chosen a good area and have a good product. That is also why you build a vacancy budget based on a percentage of the rent. Please fill free to message me if you'd like to chat more. 

Kody 

Ben,

One thing that I feel would be worth mentioning is that when you are investing in distant (Indiana for example) rental properties, I would suggest that the developer that you use in that city is a full service provider. Meaning, they acquire the house / apartment, remodel them and have their own management company in-house. That is one of our fundamental and mandatory criteria when selecting the companies we work with in the Midwest. We also only work with high volume folks. It leads to a much greater continuity of customer service. 

Ben, 

Depending on what kind of capital you're coming in with and if you could add an additional 30k from your day job per year to the mix, you could definitely get into the BRRRR world and be able to have a solid down payment for an additional turnkey property on a annual basis (not counting adding rental income). This is especially true in some of the lower priced areas like Jackson.

Welcome to BP Ben,

I am from Portland and have run into the same problems with our market, inflated prices and low cap rates. I would highly recommend markets like Indianapolis, Oklahoma City, Jackson Mississippi, and Philly. Most BRRRR properties fall within a $72,000 – $120,000 price range in these markets. This includes all cost from the initial purchase to the complete cost of the rehab. We are seeing cash on cash returns of 12-15% return with some instances up to 18%. Fill free to message me if you would like to talk more.

Kody 

Zac,

We have done / facilitated many of the BRRRR type projects in markets like Indianapolis and Oklahoma City. What kind of neighborhoods are those houses in? I would use a lot of caution if you are purchasing homes in C-D neighborhoods. The risks are much higher with those tenants. Are you having it managed or managing it yourself? Fill free to message me if you have more questions.

https://www.biggerpockets.com/renewsblog/2015/12/0...

Cody,

What time will the event be?

Thank you,

Kody