All Forum Posts by: Michael Faulk

Here are a few more individuals who have contacted me over the past few months. 

@Account Closed

@Brian Smith @Doug Lowery

Local Shreveport/Bossier un-official BP meetup

Greetings everyone!

Our local RE360 group (un-official BP meetup) will be meeting this Thursday November 19, 2015 at 6pm. The location will be River Cities Grille located at 1903 Benton Rd. in Bossier City.  We look forward to engaging with individuals from all different levels and strategies of investing. We have members ranging from the newbie who is contemplating getting into their first deal to the seasoned investor who has experience under their belt and everything in between. We are very passionate about our group and helping each other get to the next level in their business.  

We look forward to seeing you this Thursday! 

@Justin Kilgore @Jeff M. @Josh Emory@Louis Fourquet@Jimmy Stewart @Lee Nugent@NA Nelson @Marian L Claville @Melanie VanBuskirk @David Wodke @Quincy J. @Orlando Kelly @Kendrick Hudson

@Wesley Dean@JD Monroe@Andrew Banker

Michael Faulk

@Josh Emory... get a profile picture my man! Oh and you forgot to mention you did all this on top of working a full-time 50+ hour week job, having a family and still being able to take time out to enjoy life (aka... fireworks). I've got to ask when do you sleep? 

Doing big things @Josh Emory. Congrats on everything!

@Brian Smith. First off welcome to Biggerpockets. You definitely have come to the right place to educate yourself on real estate investing.  We are so very glad you are here. 

I think you're on the right track regarding putting your inheritance to work strategically. If your dad was anything like mine is I am sure he would be very proud. 

First off regarding analysis run the numbers through the BiggerPockets Rental Calculator. It will definitely compliment what you have already done. Don't just purchase anything because you have cash. Be smart in your acquisitions and it will pay off 10 fold. 

Property: Do you have it under contract already? Where did you get comps from? Where did you get fair market rents? Are you working through an agent? Is that agent knowledgeable regarding working with investors? If I can help in anyway message me. I can share some local contacts who focus on dealing with investors. 

These are the numbers I use when analysing potentials in the BP calculator. CapEx 8%, Mgmt 10% (Even though I manage myself), Vacancy (5%), M/R 5%

Your vacancy is rather high...Your calculating that property being vacant a little under 2 months a year. That is highly unlikely unless your rents are not competitive or you have a bad tenant. Also, you didn't factor management...even though you might manage yourself at first (and I highly recommend you do) factor it in anyway because you want to have that cushion when you decide to turn it over to property management. 

Also, for the initial acquisition/rehab you should speak to your lender about rolling the rehab costs into the loan. You could get a bridge/construction loan based on the ARV of the property. That way if your all in number is $50k you could get the bank to finance 80% of that or $40k and you bring to the table $10k. That's the way I would do it if I was in your shoes and you would still have $55k remaining. Just be mindful most big banks will not touch this loan because of the low dollar amount. My suggestion would be to go to a small local lender.

Take care-

Michael

Hey @Brian Smith. BRRR is an acronym coined by @Brandon Turner referring to a certain type of investing strategy. (B) Buy, (R) Rehab, (R) Rent, (R) Refinance, (R) Repeat. Basically buying an undervalued property, rehabbing the property or forcing appreciation, renting the property to make it a performing asset, refinancing the property with a lender ideally pulling out equity  and then repeating the process again. It allows you to continuously reuse or recycle your initial investment capital while growing your rental portfolio. This is a strategy that I have used in the past and worked out well. 

@Paul Dillon. I did the same thing when I grouped my properties and used commercial lending to refinance the package. I personally guaranteed the commercial loan that was made to my LLC so in the event I defaulted the lender will come after me personally. From my experience the loan doesn't show on my personal credit report since it is under my LLC.

Welcome to BiggerPockets @Chris Jetton... I'm up in the Shreveport/Bossier City area. If I can ever be of assistance don't hesitate to let me know. 

Michael