All Forum Posts by: Kory Thaut

@David Solarz I think the most common approach is to pool investor(s) and/or partner(s).  With limited capital, your role could be doing all the grind work.  Find a deal and pitch it.  

@Patrick O'NeillThe cash out refi should be based on the ARV. Your rate will then be determined on how much equity you leave in the property. For example, buy for $100k cash, repair, ARV then say $200k... an LTV loan of 75% would be $150k pulled out. LTV 80% would be $160k pulled, etc...

Generally, I've seen that if you do a refinance within 90 days to recover the cash, it should be fine.  Otherwise you have to wait 6 months.  There is also a cash out charge that FNMA/Freddi Mac cost. (my limited experience on this latter part is with USBank)

@Jeff Quintanilla It's an area that we've starting looking into as well (early stages). @Kami Carlson is down in that area and may be able to share some insight.  

@Ivan Rubio Those podcasts are addicting, aren't they?

If you're new to flipping, my suggestion would be to start with a small single family flip to get your feet wet and gain experience with some contractors / subs.  Having done a fair amount of rehabs myself, working with various subs/contractors is educational and personally, I am glad I was able to get experience on one unit first before doing multiple (multiple singles in my case).

@Dorian F. I am a firm believer that you make your money when you buy.  It's important to structure your deal and your plan correctly out of the gate.  For any long-term strategy, this should account for natural ups and downs in market.  

For example, I do only buy and hold rentals, no flips. When I buy, I do so with a 75% LTV (sometimes 80%, but rarely) on the purchase price. Since I do buy/hold, my analysis is centered more around rents, cash flow, and principal pay down. ARV vs. rehab cost is secondary but the ARV generally falls above total expenses.

Now, here is where I differ from a lot of other investors, I don't do a refinance to get the LTV % back up to 75 (or 80) against the ARV, I keep it as is from the purchase price. This generally means I'll end with well over 25% equity which drives higher than "normal" cash flow... which for me, can ebb and flow with market fluctuations.

I think a lot of people will disagree with my approach on the last part b/c I keep a high amount of money tied up in equity, but It works for my long-term vs. short-term objectives. 

@Walther Arias I think first and foremost you're going to have to do a valuation analysis on the property (whether it's currently for sale or not).  Are you experienced in doing this?  My favorite book on multi-unit property analysis is The ABCs of Real Estate Investing by Ken McElroy.  It's multi-unit focused but I've adopted the approach for my SFRs as well.  It's the blue print you'll need to really evaluate the property and confirm your approach and price.

I think following the valuation analysis, you'll want to incorporate it into a broader business plan that you can present to the owner, outlining the deal details and how you plan to be  successful.  

@Jordan Ross Congratulations on your approaching graduation.  Graduating from college is one of the most exciting times in life... take it all in.  

The one thing I wish I'd done when I graduated was house hack a duplex. Buy one side, live in the other. It gives you a sweet entry point in REI and from there, you can do whatever you want. Owner occupy forces you to buy something of some quality (if you're willing to live there) which in my opinion is an important foundation.

@Kory Clark I think this is going to be different for everyone. For me, I live off of a % of my W2 income. All REI proceeds go back into my business to grow it... for now. I also regularly feed my REI business with W2 income.

@Dinesh T. Based on what you've written here, it sounds like you've created a multi-member LLC. That should have been pretty clear at filing. Are you wishing you hadn't set it up as a multi-member?

The LLC is a business and it's important to treat it like a business (it's own checking account for starters). What LLC business activity occurred in 2015? From what you've shared, it sounds like no business was conducted. Did the LLC have any rents received in 2015?

@Jamison Kuhn I really like the idea of house hacking your flip.  I wish my wife and kids would go for that... I'd do it every time.  

You said you already have 2 and you want to add to that.  Does that mean you already have two SFRs and you want to get into multi-unit?  Or you already have a couple multi-units and you're looking to add 3-4 more doors regardless?  

If it were me, I'd like more about how I wanted to structure my portfolio.  I've never been one to count units, I only count $$$.  I've only done SFRs and am looking to expand into multi-unit as way to meet some of my cash flow goals and learn more about that part of the business.  

Since you'll be "flipping' your primary, how will that impact your other flip(s)?  Maybe a more turn-key style would work.  All comes back to the plan on how you want to structure the portfolio.  

Good Luck.