All Forum Posts by: Matthew M.

I like the close proximity of Philadelphia to where I live. (about 1.5 - 2 hours). Also have seen price points that are more suited to my current financial situation. Im an electrician and have extensive experience working with contractors. Although Ive never done a full renovation let alone one on a distressed house. I am certainly not afraid of the challenge as I am very ambitious and understand without risk you will never achieve anything worth having. 

With that being said, my goal for this year is to be able to make my first offer by June. I will need to do extensive research as this is a completely new market for me. Investor friendly agents, Property management, General contractors that can oversee a project start to finish and in a timely manner, and a brokerage firm that is friendly to the BRRRR strategy.

Also I cant wrap my head around a renovation costing around 40k even tho its what I keep hearing. As in NYC that same renovation is 90 - 100k easy.

I would love to utilize this strategy. Unfortunately due to the nature of my market I would not dare take the risk of doing this. I live in NYC and NYC has some of the most renter friendly laws in the nation. On top of that multifamily thats going to cost 600k - 800k, the tenants can decide to just stop paying. Not to mention I cant imagine market rents would even bring you close to cash flow on this property.

A coworker of mine purchased a property in Queens, NY with the intention to do just this. He paid around 750 for the property it was a 3 unit. The property was already occupied with tenants that have been renting for 4 or 5 years. Sounds great right? After the purchase and full renovation of the unit he was living in the tenants just decided to stop paying rent/utilities. It has been around a year now that my coworker has not been able to collect rent and evict the tenants. On top of the insane mortgage he is now covering the utilities not to mention he's buried in legal fees he has spent to try and evict these tenants. And now imagine living underneath of these tenants. Nightmare scenario.

@Anthony Dooley I understand your point. But wouldn't you agree that getting started is half the battle. Markets will always be high or low. And trying to time the market will have you waiting on the sidelines watching the home you wanted to purchase a year ago, two years ago, three years ago, continue to appreciate. Also rental property is a solid hedge against recession as home sales drop dramatically and single-family rentals become a viable option when people cant afford a to purchase a new home. 

Hello and thank you for taking the time to read and lend insight.

Some background, Ive been following bigger pockets for a couple of years now and plan to purchase my first property this year. I would like some clarification and maybe some insight into a question I have on BRRRR. I currently live in NYC and do not wish too or have the capital to invest here, therefore I plan on investing out of state. With 2 likely areas being Philadelphia or possible locations in FL. I currently do not believe I have enough capital to purchase a property outright. $40,000+ cash / possibly adding another $40,000 with a withdrawal from my ira which I do not want to do as I will take a massive penalty on this distribution.

I understand that purchasing a property cash forces equity and enables the acquisition of better deals.

But....

Why can't I for example purchase a property with a 25% down payment, finance the rehab, rent, refinance, and payback the loans while possibly making a small profit. Retrieving my capital back and repeating. Not including closing costs, rent and ROI heres my thinking.

Very rough example:

Purchase price - $80,000

Downpayment - $20,000

Rehab - $40,000

Mortgage - $60,000 / Rehab loan - $40,000

ARV $160,000

Refinance at 75% - $120,000

Payback loans and break even. Why wouldn't this work as opposed to paying cash for property.

@Roxanna Pifer I see you are out in PA, not far from me. I will definitely have to look into their hurricane zoning. What cities are you currently investing in? Do you have multiple properties? Im just very hungry for any knowledge that will help me narrow my search. Thanks!

@Jeffrey Long Makes a ton of sense. What I do like about the South Carolina market is the low entry points relative to where I live which is NYC. I much rather prefer a Long term rental opposed to short term, and i would much rather a property that will likely have appreciation. With that being said, with LTR's what submarkets are you focusing on in SC? SFH, mulit-families or townhouses?

@Erik Anderson Thank you so much for your input. Any information i can get from people currently investing is valuable. And just so im clear how are you rating you A B C

@Erik Anderson Do you still own rental property? What is your rental strategy in todays market?

@Erik Anderson 

What type of property do you invest in if I may ask?

The way I look at it is im not greedy. So if my margins are there than im ok with the high fees as long as im making money. Also I live in NYC so maintenance is a tougher pill to swollow. Almost impossible actually