All Forum Posts by: Mark Delosreyes

Hey Stuart, great points and ideas here! I plan to pull out max equity at 75% LTV (based on comments from this post), then use the extra proceeds to purchase duplexes and triplexes, that will cash flow. My local market is continuing to grow, so I feel these properties will appreciate nicely. Since I am rehabbing these SFH's, then doing a cash out refi, this does help offset my flip income - I use DSCR lenders, so with repairs, fees, etc, I am getting a solid write off to offset flip income. The max equity covers all of these repairs, fees, and anything extra I pull out is tax free. Thanks again!

Hey Kevin, I'm in eastern NC. There's still a lot of room for growth in our area. Also, the ARV's in my area, at least in my niche, are under $200K. Most of the houses I buy for rental purposes are around $100K or less. I can update for $10-$15K, and this same property will appraise for $175K.

@Sean Graham, agree to……agree.

I have successfully BRRRR'd 40+ properties in my 8 years of being a real estate investor. I recently listened to the BP podcast on the "Perfect BRRRR", where you pull out 100% of your investment. Out of the rentals I've BRRRR'd, I've only had 1 rental where I've left money in the deal; every other deal I've pulled out extra capital to put in my reserves or invest in the next property. This is all while maintaining $200 per month cash flow after PITI, vacancy, repairs, management fee, and capex. I have learned that cash flow is kind of an illusion with SFHs, especially when you need a new HVAC, roof or other large repair. That's why we started flipping houses; the money is made from equity, rather than cash flow.

Question: I’m about to do a cash out refi on a bundle of houses. Should I cash out the maximum amount of equity, while maintaining a much lower per month cash flow (still +), or should I stick to my $200 per unit target and be glad I’m getting all of my investment back?

@Stephen Nelson, that's great advice! I do have a few STR's, and maximize those losses on my personal tax returns, when I can. Yeah, it's a slippery slope, and the juice probably isn't worth the squeeze. I'll just eat it and pay my taxes…until I become an actual real estate professional. Thanks again for taking the time to respond…this was extremely helpful!

@Michael Plaks, awesome advice. Haha, I felt like I knew the answer, but needed clarification from people much smarter than me. Thanks very much for taking the time to respond!

CPA friends, I'm an accountant/controller by trade and have a W2 salary position in that field. I'm also a seasoned real estate investor: flip 10+ houses per year and 50+ rental units. I handle the bookkeeping for our multiple LLC's, acquisition and finding financing for all of our properties. I track all of my hours and legitimately spend more time in real estate - I get up at 4:00am each morning, handle accounting for my LLC's, listen to Bigger Pockets podcasts, search for and analyze the next deal. I'll also check on rehab projects and even do attorney closings on my lunch break. At what point can I claim I'm a real estate professional on my personal tax return? Thanks!

@Doug Smith, thanks for reaching out. Yes, my DSCR calculation is 1.5 on the conservative side. It would definitely work, but would depend on the rest of the terms of that loan product - interest rate, origination fee, etc.

@Raymond J. Rodrigues, thanks for getting back to me so quickly. Please message me, and let me know what information you need to get a term sheet. Thanks, and I look forward to hearing from you.

Any lenders do 15% down (or less) DSCR loans, 30 year am, on turnkey investment properties, mainly for small multifamily 1-4 units? There's not really a lot of value add opportunity or sales comps in this space for our area.

I typically (BRRRR) purchase fixer uppers with cash, fix up, rent, then refinance on a DSCR and get all of my money back. I also use hard money loans for the houses we fix and flip. I have 100+ deals under my belt, so not really a beginner.

Thanks!