All Forum Posts by: Kyle Reece

Congratulations on your first BRRRR. Can you provide some more information? Did you use financing to purchase the property? What kind? What type of financing do you plan to use after (convential, commercial, fha)? Ideally you would have gotten pre-approved prior to purchasing the deal originally, so that your refinance was ready to go ahead of time. Good idea for next time.

Quote from @Lucien Perreault:

@Paul De Luca

What I meant by "0 income" is all the deductions that I'll have will make my tax liability 0 which looks like 0 in income from an IRS stand point. Now, is my income 0? Absolutely not. Between my military income and the cashflow of my property, I am far from 0.

 I also have military pay and your lenders don't seem to understand military pay and tax liability vs usable income. Entitlement pay, BAS & BAH, are not tracked on tax liability but can be used as income on loans. Also any depreciation or standard tax deduction will usually get added back in as well. So even if you final number is 0, you would still show usable income to lenders. Your lenders are sending red flags abound. I would call some more lenders if I were you. Also its not for everyone but you can use your credit cards to do some wholesale or wholetels, they are quick turn around so you would pay your credit car balances off but its high interest for a few months. But if you can't qualify for hard money then it lets you do deals, build capital, and get experience.

Quote from @Chris Holter:

Quote from @Kyle Reece:

Quote from @Nick Barlow:

@Chris Holter congrats on your recent purchase. You sound happy, and I’m happy for you.

Not to poke holes at you, but househacking a duplex you got commission on for being the broker while simultaneously needing an FHA loan to contain costs/minimize expenses isn't something I would count as a 1% property on the MLS as it's not repeatable, and further proves the point deals are no longer "had" or "found"- they require active participation to be "made". That reality is substantially different than a 1% property on the MLS from 4-5 years ago.

If you disagree-kindly do it again and prove me wrong, lol.

I do disagree because even without the commission, concessions, or fha house hack. It's still a 1% property. I have 3 I'm looking at right now that are also 1%. It was 4 but one went under contract before I could get my ducks in a row. Every deal I buy in my market is at least a 1%. Cashflow markets the may not have the best appreciatation are easy to find 1%+ deals off MLS. So I prove you wrong every day, whether I buy or not becauseits the market, cashflow markets don't fluctuate as much as appreciation markets. Returns are consistent and repeatable.

I would agree with cash flow market we are in. Will be very profitable for me In few years to come even with 25% down. Using a slow BRRR strategy on all and maximizing rental income over next few years as I cycle through tenants and rehab units then refinance. 

 the big value add is when you get commercial financing on your residential property. Many landlords around here are not good at maximizing rental income and keeping up on repairs. My comp appraisal may not change much because there are not many multifamily comps but my income appraisal is be huge compared to when I bought it. That's where you can refinance. I have a commercial lender that will lend up to 85%, I'm about to refi one property to buy three more.

Quote from @Nick Barlow:

@Chris Holter congrats on your recent purchase. You sound happy, and I’m happy for you.

Not to poke holes at you, but househacking a duplex you got commission on for being the broker while simultaneously needing an FHA loan to contain costs/minimize expenses isn't something I would count as a 1% property on the MLS as it's not repeatable, and further proves the point deals are no longer "had" or "found"- they require active participation to be "made". That reality is substantially different than a 1% property on the MLS from 4-5 years ago.

If you disagree-kindly do it again and prove me wrong, lol.

I do disagree because even without the commission, concessions, or fha house hack. It's still a 1% property. I have 3 I'm looking at right now that are also 1%. It was 4 but one went under contract before I could get my ducks in a row. Every deal I buy in my market is at least a 1%. Cashflow markets the may not have the best appreciatation are easy to find 1%+ deals off MLS. So I prove you wrong every day, whether I buy or not becauseits the market, cashflow markets don't fluctuate as much as appreciation markets. Returns are consistent and repeatable.

Quote from @Chris Holter:

Quote from @Chris Holter:

Quote from @Kyle Reece:

Quote from @Chris Holter:

Hey Kyle, im also in Plattsburgh investing. How did you only put up $2198 when 3.5% FHA would be around $8k +? Just curious, need some ways to spend less at closing lol. I have all my houses in investment mortgages since my primary is on Long Island. Appreciate any info. Thanks.

 Hello Chris,

I am a real estate broker in ny so I was my own broker and got 3% commission back at closing in addition to $12k in seller concessions. The down payment after commission was only 0.5% and the concessions paid for nearly all the closing costs.

 That makes sense now. I’m hearing sellers concessions can only be 3% of purchase price now? Is that true only for an investment mortgage or discretion of bank? 

 my fha allowed up to 6% but I didn't use it all.

Quote from @Rodney Sums:

Quote from @Kyle Reece:

Originally posted by @Michael K Gallagher:

Fantastic deal and congrats! You said its a duplex but also mentioned a main house...I'm really curious is this a main house plus a carriage house or ADU type of building?

 Large main house with a 1200sq ft apartment above the garage. The main house has 2500 livable sq ft but is closer to 4000 usable sq ft. I don't think I would divide the main house in the future because the property is very unique and I believe there's more potential in the uniqueness.

 Just out of curiosity and not challenging what your assessment of the uniqueness of the property, I'd like to know how the potential of it being unique earns more than having more sq ft to charge for?

The house has 2 large basements not connected with a walk out. There is plenty of room to add more units if I so choose. A half bath and laundry are in the basement so adding a full bath shouldn't be too much work, egress would be the biggest problem

Quote from @Chris Holter:

Hey Kyle, im also in Plattsburgh investing. How did you only put up $2198 when 3.5% FHA would be around $8k +? Just curious, need some ways to spend less at closing lol. I have all my houses in investment mortgages since my primary is on Long Island. Appreciate any info. Thanks.

 Hello Chris,

I am a real estate broker in ny so I was my own broker and got 3% commission back at closing in addition to $12k in seller concessions. The down payment after commission was only 0.5% and the concessions paid for nearly all the closing costs.

Originally posted by @Michael K Gallagher:

Fantastic deal and congrats! You said its a duplex but also mentioned a main house...I'm really curious is this a main house plus a carriage house or ADU type of building?

 Large main house with a 1200sq ft apartment above the garage. The main house has 2500 livable sq ft but is closer to 4000 usable sq ft. I don't think I would divide the main house in the future because the property is very unique and I believe there's more potential in the uniqueness.

Originally posted by @Steve MacNerland:

Hey all, I'm a local investor.  I don't have anything in Plattsburgh as of yet but it is an area we are looking at.   I think it would be awesome if we could start a meet-up...Anyone else interested?

 Not to hi-jack the thread but 100%. I have been thinking about starting one for awhile but I barley scape together my time right now that I would not have time to properly organize a meet up. But if we start one I am in. There is a company that franchises RE meetups across the country Multifamily and more. They have some good content but don't know the application process for using it. 

https://www.multifamilyandmore...

Investment Info:

Small multi-family (2-4 units) buy & hold investment.

Purchase price: $238,000
Cash invested: $2,198

House hack duplex, apartment brings in $900 when purchased market rent is $1200 for that unit currently raised to $1000. Will increase over next couple years unless tenant moves out. Main house would rent for $1500 if we were not living in it. Currently renovating main house to add some equity and pull out some money

What made you interested in investing in this type of deal?

Cashflow

How did you find this deal and how did you negotiate it?

MLS, low competition, only person offering

How did you finance this deal?

FHA

How did you add value to the deal?

House Hack, renovating vacant main house

What was the outcome?

1% cash invested, COC is insane and cashflow once we move out will be $600+

Lessons learned? Challenges?

Time estimates for materials extended as the year went on, should have ordered earlier for cabinets, countertops, etc.