All Forum Posts by: Michael Hoover

Have learned ALOT from his videos and did pay $1000 to get the lease option paperwork. Have read his books, limitless and straight path. His motivation REALLY helped me get going as a beginner, had 3 rentals when I started listening to him (found his start to be similar to what I was starting) and now have 17 homes 3 years later. I have found at this point his advice is become less and less useful and seems to push heavy for giving him large sums of money to enter into partnerships.  I have 4 homes under lease options so the $1000 I spent was worth it. I have considered partnering with him on maybe ONE home but haven't took the scary plunge, I say one and only one because I might could see it worth it to see his methods and locations of purchasing with him, I have a hard time seeing it being worth it to invest multiple deposits for only half the profit. He seems to have a smart team behind him to see that knowledge at work would be great and "possibly" worth the cost. I know it's not impossible but my mind is has had a really hard time seeing how to move out of my "backyard". From the beginning, I've been doing every step as a one-man operation. Home search to reno planning to paint to plumbing to floors to record-keeping and contract writing, self-managing (all).  Feel I have backed myself into a more than full time job and in my baby rural town feel this might be the only way to keep this profitable.   I know I'm growing home numbers, cash flow and net worth so Feel I'm moving forward but finding a real mentor to show me how to be more hands-off would be GRREEAT.   Have talked to multiple members of the Krohn team just don't feel they were set up to help with my issues in a way that utilizes my money inteligently.        So recap,  Watch Krohn for start up inspiration, read his books buy his paperwork if needed, but be very cautious and heavily consider giving half profits on your money.     End of the day, thank you Kris Krohn for making me much more intelligent with your content and books!

Check out photos of our BRRR's here on Facebook.

https://www.facebook.com/MHRen...

 Thank you! I still feel tiny in comparison to the crowd but I can see the growth and I am hooked! What is holding you back? I need advice for my problems but also may have advise for yours! Lets grow together! Whats your next step! DM me if interested.

New to BiggerPockets and GRATEFUL for the knowledge! I am finishing up on a BRRR and looking for funding.

I have 12 Self remodeled SF homes completed in the past 2.5 years and loans in place with the following rates:

As you can see Rates are progressively getting higher and my current just-finished BRRR is in the process of being financed at 8.25!!

I can still make this cash flow although I am getting worried that I am settling for unreasonable rates?

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QUESTION:  Please inform me if these seem on par or if you all are finding better lending options!!??

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The first 6 of these loans were established through a local bank all as 5 year balloon.

         This bank became cautious once having 350-400k borrowed with no long term history to show my solidity (this was at about 1.5 years into my investing and only one tax return that showed only 2 properties producing in that year)

The following 6 homes I swapped to another local bank just down the street. Still all 5 year balloon loans. 

       This bank became nervous just recently as my 2022 tax returns showed profit of only 8 homes and I now have 12 loan payments. My Debt To Income is lagging behind due to somewhat rapid expansion.  

Now, I have began working through online lending options in the form of DCSR lending. I was quoted 8.125 with 2 point pay down. 

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My Info:

Credit score: 778

Personal Debt: Zero

Rental home debt:  812k 

Rental home value: 1.375k

DCSR on homes: 1.21 to 1.83 (avg 1.45) 

Total Cash flow: $3,819/mth ( $312 avg)

2 years of business history / tax returns

Total net worth:   $1.03m

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I have been sent the offers for Business Funding, with the big stamped UP TO 500k As low as %5.25 from random online lending Firms although when I have pursued these before andthey were needing me to show stable month to month spending and income from my business bank account. My bank account is anything but stable on a month by month basis. My Business bank account gets a huge increase each time one of my BRRR are completed and then goes on a steady decrease for 3 months after until my next remodel is complete. This has led to too much inconsistency for these lenders to be interested.

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  QUESTION:   I have received multiple offers for debt consolidation from online lending at rates as low as 3.89%. This is to consolidate Credit card debts that I temporarily hold. Seems a little too good to be true.. Is this a form of loan that would hurt my credit score?  If not wouldn't it just make sense for me to stack up 100k or so in credit card debt across a few cards and then use this low interest rate to consolidate?   This has seemed "gimmicky" is why i have not pursued but would like your opinions. 

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Ultimately, I am looking to establish a lending agency that I can be comfortable assuming they have extremely competitive rates that I can continue to build through. Maybe I have already found that in my above current quote of 8.125 with 2 points paydown although I am starting to feel like I am accepting trash rates.  Please give me your thought and recommendations.                   Thank you for your TIME and thought! Let's make each other push to success with our combined knowledge!           Thank you BiggerPockets~platform.

I primarily market my rental properties through Facebook marketplace. See before and after photos of my properties here. https://www.facebook.com/MHRen...

Intro-  

Hello all, looking to connect, ask and share info with other investors around my experience level. Please critique my numbers against yours and please advise me if you see better directions than my local market.  A Very Breif self bio - 2.5 yrs in real estate, Most acquired BRRR method - 12 homes rented (4 of which are Rent to Own) - 2 homes sold, - 4 homes purchased and in line for remodel. 

          2 primary questions at the moment, 

Question 1. What interest rates are you all locking down in the past few months? My last loan was at 8.25% 20yr loan 5 yr lock through a local bank. (see below for all my loan rates over the past 2 yrs). 

Question 2. Is my markets' median price range too low to be sensible or does this give my market the gold star? ( I live in a rural area of MS, my avg appraisal After remodeling is 99k, my avg cash flow 312/mth).

I feel I am becoming quite knowledgeable with this process and all originally figured numbers seem to be working out as expected, I would just really love to connect with someone in a similar place in their journey to bounce ideas and critique possible shortcomings on my part. Please see the below additional details I would like to share in an attempt to connect with .. you.   Check out photos of our rental homes at https://www.facebook.com/MHRes...

Bio and Details- 
My name is Michael. I worked as a Subsea engineer for 10 years. I then decided the away from home life was no longer for me, saved some money and came home with $160,000 liquid cash to start business and purchased my first Single family home for investment purposes 2.5 years ago. (100k of this 160 was pulled from my 401k)

I currently own;- (13) homes that I have fully remodeled (probably over-improved) and are currently rented out.- (9) in which are traditionally rented, (4) rent to own with 2 year lease/ purchase options.- 2 homes that I have remodeled and sold (this is also my full time job/income)- 4 additional homes, cash purchased, in line for remodels, rent to own. 


I now purchase homes under 3 processes:

My FIRST process of acquiring homes is: BRRR. Buy very ugly, nonfunctional home, with personal cash and renovate with personal Cash. Once renovation complete have bank appraisal performed and cash out mortgage put against home for +/-80% of value.  Rent or Rent to own to pay mortgage while still producing positive cash flow. 

This is my full time job and only source of income. We perform every task start to finish, including electrical, plumbing, roofing, everything. ALOT of manual work performed that I do not feel I can't continue doing forever. 

                              Averages Under first Process (currently 7 homes):

         Buy Home- 6k to 43k, average of 23k    "Very ugly homes"

          Renovate- 18k- 45k, average 30k

          Time To complete- 42 to 96 days , average 68days

          Cash flow- 272-549 Average 314/month

          Cash realized with remodel done, renter and cash out bank loan in place:    -$7,786      to       +$50,390     avg.+ $12,979

           Daily income received for performed work: avg 190/day, $5,726/mth

           Equity position upon completion: 18k-57k avg 30k

My SECOND process of acquiring homes is: Buying up front with bank loan

1. Find and purchase home in, or Nearly in rent condition with a bank loan,

2. Spend personal cash to perform needed decorative improvements.

3. Rent to own to pay mortgage while still producing positive cash flow

4. Receive payback for renovations when rent to own purchase contract is fulfilled at 2 year mark.

                          Averages Under Second Process: (currently 4 homes)

      Buy Home: Purchase price 85-100k

       Money down 17-20k

      Minor Renovate: $1500-$5500

       Time to Complete: 7days to 30days avg. 18days

        Cash Flow: 331-510/month avg $421/month

       Cash realized with renter and bank loan in place: Negative - $24,747 to -$16,746, avg. -$20,746

       Daily income received performed work: avg -1152/Day

        Equity position at end: 37k-45k avg 41k

My Third process of acquiring homes is: Fix and Flip

1. Buy with personal cash and renovate with personal Cash.

2. Sell Home.

                      Averages Under Third Process: (currently only 2 homes)

     Buy Home: Purchase price 23-34k

     Full Renovate: $43k-47kTime to Complete: 91days to 110days avg. 99day

      Cash Flow: NO CASH FLOW

      Cash realized at sell: + 48k-77k avg +63K

      Daily income received performed work: avg 636/day 19k/mth

      Equity position: NO Equity


I have averaged completing 4 homes per year, 1 in which is sold to keep Yearly salary at a desired amount while still accumulating rental properties( I set my 160k that I started with as a baseline that I want to get back to each time a reno is cashed out). 

Prep questions for Consultation:

        Income; 2022= 110,000    (net worth ~1.01m)

                       2021= 110,000     (net worth ~ 600k)

                       2020= 160,000 (half year Subsea Engineer, half year Real Estate)    (Net worth 400k, personal home and 401k)

                       2019= 230,000 (Subsea Engineer)

Investments; 

         Personal home 170k value, paid in full, (MOBILE HOME with extreme improvements to the home and around the property) (hard(er) to find cash out lenders for mobile homes and bad rates!!) 

          13 rented homes

• 1.389 M value (From Loan Appraisals values)

• Currently 875k Borrowed against homes from bank loans,

•  514k equity

        4 homes purchased in line for Renovations, (No profits realized) 

• Combined purchase price = 172k

• Current estimated value = 180k

401k : 200,000(Milliman) (heavily considering pulling for investing)

Credit score: 770 

Personal household Budget: 4-6k/mth (this is running on fumes)(I currently have Zero Personal debt)

13 rental Properties; cash flow currently 3819/mth

Loans: all loans are 5year balloon amortized at 10 -20yr5.5 to 8.25% rate.