All Forum Posts by: Kurtis Montgomery

Kurtis Montgomery:

Hello @Nathan Recchia and welcome to the BP community!

We have a lot in common it seems. I am getting married in October also and have massive goals linked with an obsession of knowledge and passion.

Starting out like you, I thought I had a couple Investors in my pocket and learned over time, they were in my shoes and not at the point yet when they would be able to lend.  It took a lot of analysis and really honing in on a lot of traits I picked up either on BP forums and podcasts or from my peers in Chattanooga to find others actually looking to give out money.  Investors need to know they are secure, so showing them an Investment Calculator, Rehab Manager, and any other spreadsheet or calculator is imperative.  @Brandon Turner wrote a bible for newbie investors on how to get creative in financing with The Book On Investing in Real Estate with No and Low Money Down.  Read that and the Beginners Guide until you can recite it while underwater or dream about it in your sleep (that's much safer).

A good way to get in with some investors ( Buy & Hold or Flippers) would be to offer your landscaping services once every couple weeks for free for some coffee time to ask questions about how they got started.  If you do, don't look at the situation as losing money, but gaining important insight and knowledge to use in your future.

I'm glad your staying away from the shady investor, your name can get tarnished very easily, its like getting a credit card in college and maxing it out and never paying it back.  Down the road it always bites you in the butt.  

I am putting in my first offer with a partner on a house as we speak.  Investors gave us the green light and even though I've done ever number imaginable from all the resources given on bigger pockets, i'm sure I will still leave out something.  Everyone always says your first flip is nothing but a learning experience and just be happy to get out without losing money (good thing none of mine is in).  I like to always plan for the worst, so nothing surprises me.  I will be posting about it on the forums soon, so don't forget to set Chattanooga into your keywords.  I hope you do well.  Action, action, action, and don't get discouraged.

John Santero Can you send me some info about the meetup Thursday? I'd love to be involved.

Welcome Mike Fuller ! As you know the amount of knowledge we all can get on the forums are priceless. The next step after book education is surrounding yourself with entrepreneurs you'd like to fashion your business or drive like. Good for you there are a lot of great minds and business persons in the area that are crushing it and welcome newbies and questions or advice. Good luck to you in your future and I hope to meet you at our local REIA.

Hello BP Nation!

Newbie Kurtis Montgomery here from beautiful Chattanooga, Tennessee.  My last post I talked about a Buy & Hold in an up and coming gentrification area.  The deal wasn't under contract yet and another investor swooped in and got to it faster than I did.  Smart person; it was a great investment at an amazing discount price.  

After analyzing 3 properties a day, every day, I finally found another one with even better potential, but this one is a flip (I have put in 2 offers for this one, and just got a counter).  My business plan, which I am sticking to, is to flip houses to provide the down payment for my long term Buy & Holds.  This new property is a duplex in a historic neighborhood built in the 1920's like a lot of the homes in Chattanooga. With 6 out of the 14 houses on the block have been rehabbed and sold in the last 3 years, buying in the $80-100s and selling right around $220K.  This duplex is in pretty good shape for renters so that is a plus, but I believe it will still need around $60k to bring it back to it's glory and attract the buyers like the others have.  The rehabbed homes in the area have all sold in no more than 4 weeks, so that time frame is what I am gunning for.  The house has great bones, new sheetrock, new HVAC and Water heaters (2 of everything), the wiring and plumbing have been updated in the last 3 years, and within the last decade new windows.

Repairs wouldn't be major to polish this gem, minor modifications. On my first flip totally for myself, I'll take it easy and not do a Ferrari in a Cadillac neighborhood, but a few design touches to "wow" potential buyers and consistently do as branding. The house needs new siding, demo some walls for an open kitchen concept, new flooring throughout, and the "wow" kitchen and bathrooms. I wouldn't mind keeping the second bathroom original and updating the hardware or faucet, but bathroom needs to be relocated to a more functional spot. To get back to a SFH, the division of units need to be combined. I have been in the residential construction business (project manager for 8 years) and have made good friends with every trade, or just great contacts. My electrician said that it wound't be a huge deal converting back to a SFH and that he would even take some of the price down if he could reuse the old meter, amp, boxes.

I am offering around $100K for the house (they just countered to 110), my original was $85k and that offer was rejected. My realtor, and very close friend, told me it's likely the owner won't go for anything under $100, as the list price is $120k. With the 70% rule coming to a close shave, I would love feedback or questions. I have used the Investment Calculator and a couple other Excel Spreadsheets to run the numbers (Hard Money/Fix N Flip Calculator, Buy & Hold Cashflow and ROI Calculator, and the Hybrid Calculator), so feel free. I don't want my first to be emotional, bad, or overpriced. Thank you!

Hey Luke, 

The property is vacant at the moment.  Every other property in the area if I flipped it in 3 years is worth double the investment, and there are a couple at this price in a 6 block area, but this one is the cleanest. Rents range from $600-900.

Hello BP community!

I have been in my education phase for around 4 to 6 months and am an obsessive learner. I want to transition to the next phase, which would be to put my boots on the ground. I initially talked to a couple first circle private money investors, but turns out timing is bad with 3 of them (one isn't in a position to buy or finance after paying property tax on 90 something properties, another just finished a BRRR strategy and passed on this opportunity, and the third is being audited and my gf, which is his office manager, said it wasn't a good time and to wait until the fog clears).

I am about to make my first purchase with conventional financing, doing all the numbers by myself too, and I wanted to run it by the BiggerPockets forum to make sure i'm not buying a dud or if cash flow and ROI are actually the things i'm buying for.

This property is in a district of East Chattanooga, which is being gentrified. It isn’t in the best area, but starting out it looks like a great cash flowing property. Here is a link to the zillow page just to gauge map and specs of it. The numbers I input into the rental calculator are more conservative than what zillow specifies just because I know the site isn’t the most reliable.

I’ve used the Rental Property Evaluator and Investment Calculators provided by BP.  I don’t want to get too vested in this property so I’m not blind to any mistakes if i’ve made, if any. The property is in great shape and only needs fresh paint and interior trim. It is also between two churches and in a very clean block.

Since I can't upload documents to this page I will give an overview.  

The property is listed for $19,500. Exterior is in good shape and so is the interior. It needs fresh paint and interior trim. Kitchen and bath are also in good shape. The rehab cost i input around $2,000 just in case as a buffer. Loan interest rate around 5% with a 20% down payment for 30 years, no HOA, Yearly Home Owners Ins around $68.25, Annual taxes at $593, saving monthly maintenance at 5%, vacancy expense at 8%, monthly Cap Ex at 8%, and I included a monthly Property Management fee like the guys say in case I hold onto this property for the longest term at 8%. In the area I conservatively input monthly rent at $700. With these numbers input my evaluation looks like this:

Loan amount (before down payment) = $21,500.00

Down Payment= 3,900.00

Monthly loan payment (P&I)= $94.48

Monthly HO Ins= 5.69

Monthly taxes= 49.42

Monthly Maintenance estimate= 35.00

Monthly Vacancy cost estimate= 56.00

Monthly Cap Ex estimate= 35.00

Monthly PM fee= 56.00

So my total Monthly Costs= $331.58

Monthly profit= 368.42

Annual profit= 4,420.98

Debt coverage ratio= 2.11

Annual ROI= 15.85%

and Months to break even= 75.73

Thanks for reviewing and please feel free to comment!

Hey Jimmy Moncrief definitely count me in for the BP meetup. Hit me up if you need any help organizing.

How can this be applicable to our industry? My friends have 3D printing capabilities and are willing to do.

Thomas DeMoss I am a contractor starting my own REI (flipping and buy & hold) in Chattanooga and am looking to get rolling with wholesellers. I saw this post a year later but am hoping you have strong contacts with a few. Hit me up when you get a chance.

Justin Traille PM means Project Manager. I am looking also for some wholesellers to find business with in Chattanooga, have you found any good guys?