All Forum Posts by: Luka Jozic

 If I buy cash, then why do a cash out with DCRS? If I buy cash I can just use my normal conventional lender at 70%, no seasoning if I buy cash.

However, the issue with this is that to address the lead issues the tenants need to vacate. Additionally, to pull out as much cash as possible out I need to update both units (paint and flooring throughout and some other minor things) and to do that they also need to vacate. If I don't do that, its not going to appreciate for enough and I won't be able to pull enough out.

 Thanks.
1. So I have about 100K to invest. At this time Im really only interested in BRRRR since I want to scale fast. In most cases, you need around 100K cash for that at least the ones Im targeting. If I buy this one with conventional, its going to be about 20K for down payment and closing costs. That means I now only have 80K left, I can't refinance for a year and 80K in most cases is not enough for a BRRRR unless I do hard money which I would prefer not to do. Hope that makes sense.

2. Like Vadim said I can't refinance a conventional for at least 12 months

3. No possibility to house hack as I don't live in Cleveland

4. Fixed up rents according to rentometer is around 950-1000. 

I am under contract on a duplex in the 44102 area at 66K that has been cited for lead by the city. My initial idea was to buy cash, vacate the property, and do a BRRRR (the property needs a decent amount of work) and refinance asap and find my next deal. However, it seems like I have the option to do conventional and since the property has tenants in both units paying like $600/mo each, I was thinking is it better to maybe do a conventional and bump the rent to maybe $750 a month? If I do that, I can't do a cash out refinance for a year. Sure I will have more money in my pocket, but I wont have enough to buy something else cash until I save some more. Additionally, if one (or worse, both) tenants move out then I will have to put money into making it rent ready, but I won't be able to refinance for another year meaning even more of my money will be tied up. I guess one solution to that is to see if I can get them both to sign a new 1 year lease but that might be hard before I take ownership. I do know both tenants want to stay, but Im not sure how they would feel about a rent bump.

Rates right now for a cash out refi are around 6.5% with 2 points which is pretty good. I don't know what they might be in a year. Im really not sure what the best play is here as I feel like there are pros and cons with either decision. 

 I have some boots on the ground that could help. When you say pay 5-10K for someone to handle all, what is all?

 I've read about that. So the first question is how do I do a title search in the most efficient and cost effective way? Also, could you elaborate on the stuff about lean searches?

Regarding that leak, since you were not the owner of the property when that water bill accumulated, why would you have to pay for it?

I am looking into ways to find better deals to BRRRR and have been looking into auctions. It seems like its a bit risky but also potential for great reward. I understand that I have to pay cash and can't run an inspection. It seems like the best I can do is go to the property and look at the outside and potentially peek through windows. Now of course there could be tons of hidden issues but I feel like if you can get the property at a deep enough discount, you should be covered for the most part. Now some of the questions I have are:
- Other than going to the property and peeking, is there any other way I can get a sense of its condition or hidden issues?

- What are some other things to watch out for that I maybe haven't thought of?

- I see there are some Auctions posted on the MLS that usually include pictures, whats the difference between those and the ones on the County Sheriffs website?
-What other due diligence should be done before joining an auction for a particular property? I mean other than the usual due dilligence?

- Lastly, o you guys think off market or auctions can provide better deals?

Really appreciate your response as well as other responses. And you do make a very solid point. I also listened to an episode of the BiggerPockets podcast today about exactly this, and they seemed to all be in agreement that finding a BRRRR where you can pull all your money out and still have cash flow, well lets just say you're gonna need some real magic to make that happen. So I think its more of pulling as much as possible out and as you said, not really expect cashflow but if you can get $1-200 a month thats great, 5 years from now that cash flow will be more.

Hi folks, I started out last year and just recently bought my second property. I am now in a position where I can buy cash and I figured instead of just buying nice properties until I run out of money, I want to supercharge my portfolio on start with BRRRR. I have been quite fortunate to land a solid team pretty quickly. I've read most the books, listened to podcast, read on the forum and most importantly, analyzed a ton of deals (mainly of the MLS). The issue that I have is that the examples in books, or numbers provided in other forum threads etc. don't quite make sense, at least not to me. It seems like most people that execute a successful BRRRR end up after financing with a deal right around the 1% rule. With the high interests rates right now it seems like the two options are 1. Pull out all your cash after the rehab and have zero or even negative cashflow or 2. leave cash in the deal and still have pretty low cash flow.

Like for example, say you buy a duplex for $70K, rehab for $40K, and then refinance at around $140K, that means Im leaving around 15K in the deal depending on closing costs and note that I don't even have any carrying costs here. At $140K and having only able to pull out 70% due to it being a duplex the PMI is just shy of $1000/mo. For the areas Im looking at (typical C) I can rent it out around maybe $850/mo per unit so 1700 total. The way i calculate is 10% vacancy, 10% repairs & capex, 10% management. So remove 30% and we have $1190 left. That means we have about $200/mo of cash flow. That sounds very little to me for all that work and if I were to do a hard money loan, it would be even worse! Is this about as good as it gets or am I missing something? Could someone help me make the numbers make sense?

I know there are similar threads but I wanted to ask this question for Toledo specifically. If you are not going to do a true BRRRR, does it makes sense to buy cash simply to get a lower purchase price? What I am thinking is mainly properties in good condition or just light cosmetic rehabs nothing too crazy. Buying cash can give you a lower purchase price, but for a SFH you would have to leave 25% in the deal vs if you buy with conventional lending you would only need 20% down payment. So the question is is it worth the potentially lower purchase price for having to put/leave 5% more in the deal?