All Forum Posts by: Ko Kashiwagi

Hi Andrew,

Are you looking to partner with a builder/developer? If you are just outsourcing work and contracting builders, this is going to be difficult to do unless you are going all cash. Most lenders wants to see heavy rehab or construction experience to secure financing. This could make sense if you have enough reserves and t=high risk tolerance.

Hi Rich,

Yes, if you assume you are buying a property all cash and rely completely on appreciation, this makes sense. However, the return on an investment in real estate is usually calculated from the perspective of ROI and Cash-on-Cash return, which is based on the cash flow on the deal. Buying real estate with financing allows leverage and provides a positive return on cash when the rent is higher than the expenses.

What about the gains from the cash flow? The depreciation tax benefits?

Hi Jeff,

The ability of the lender to call the loans is due to the Due-On-Sales clause. This clause states that your loan has to be paid in full in case the name of the title change. However, this clause is rarely ever actually called or many lenders will not take action on it. It's up to you whether you want to switch the title into the LLC later, but note that this can also be done through refinancing into a business-purpose financing like a DSCR.

Hi Robert,

Using multiple platforms to get the best tenants is a good way to get started. It's also market dependent, but in general Zillow, Apartments.com, Craiglist, Facebook and RentCafe is a good place to get tenants. Most importantly, there needs to be a good tenant screening process.

Hi Daniel,

All around it's a tough market to do a BRRRR, but a lot of investors are looking at ADUs to increase cash flow or doing short-term rentals. Regulations differ by cities, so you'd have to check for each market.

Hi Polen,

Starting off with a house-hack or a turn-key rental is the easiest way to get started. The next stage could be a cosmetic BRRRR, that way you can learn to scale your rental portfolio.

Hi Cory,

If you are simply buying from someone that has a mortgage on it, you will not be handling the full payment on the mortgage. The escrow and title company are the ones disbursing the funds, so you just need to bring cash to closing.

Hi Megan,

You can structure an LLC with an operating agreement and outline the share of ownership of the company. I've seen cases where the share of ownership on the property becomes contingent on the work completed, so one party gains more ownership as work is completed.

Hi Kevin,

Unless you have an imminent opportunity to invest and want to take a really active approach to real estate, it sounds like a good bet to hold for now. The property also appears to be in an appreciating area, so selling and buy a cash flowing rental may not be the best option.

Have you looked into ways to increase rent such as Mid-term of Short-term rental?

Hi Ryan,

What does your lease agreement say in regards to late payments and late fees? As much as it's nice to give the tenant a benefit of the doubt, this can lead to slippery slopes and often ruin landlord experiences. It's good to stay professional and show sympathy, but it's important you enforce the rules set in the lease agreement. Tenant laws depend by regions, but in general it's a bad idea to accept partial payments as there is a chance you need to wait longer for evictions.