All Forum Posts by: Michael Magnell

@Jacob Wutke check out Bryan at InspectorNick. Does a great job.

Hey BP - how do Kansas City investors feel about the Historic Northeast right now? Specifically MF in Pendleton/Scarritt.

During my last diligence trip to KC it seemed like things were starting to turn, but some of the locals said it’s still a chaotic area with major drug and crime problems. I found it hard to believe given how beautiful and well kept some of the homes were (talking north of Independence and west of Van Brunt). Proximity to downtown is unreal - 10 minute Uber ride.

Also, I’m trying to figure out if there is enough of a quality tenant population to fill all of these newly rehabbed buildings in the same area. I’d hate to step into a major unit supply overflow issue causing downward pricing pressure on achievable rents.

Looking forward to hearing what folks have to say!

@Bryan Koster

Hey Bryan - how did things end up here? I’m potentially about to go through an extraordinarily similar game plan. Will know if I lock-up a 24 unit shortly and then the execution phase begins.

I hooked up all bank accounts, retirement accounts and credit card to Personal Capital. This aggregates everything into one centralized location and has fantastic visualizations that help track income, expenses, monthly cash flows and net worth. Once you've saved a little cash and start investing via a 401K plan through your W2 job or your personally opened IRA plan, there are some really great tools/visuals for retirement planning and asset allocation. If you go the rental property route, I have been using Stessa and it's been simple, easy to use and very helpful thus far in managing my property cash flow.

Lastly, it takes a ton of discipline for this, but I use my credit card for every expense possible during the month and then pay the full balance every statement. Get a good reward card (Chase Sapphire, CapOne Venture, airline one, etc) and the points accrue quite rapidly. My wife and I have taken numerous free trips as a result.

Hey dude! I also live in SF and just bought my first KC property earlier this year. Off market 8plex in Grandview (right place, right time). Let’s chat or grab coffee someday and we can talk about lessons learned thus far.

@Llewelyn A. This is a great description of the underlying calculation mechanics, but could just use the IRR function in excel to automate all of this. It's the best way to analyze the "true" return on a specific deal. IRR is closely related to the net present value function: basically you have to discount the individual cash in/outflow amounts over the course of the hold period to the present day (given the time value of money).

https://support.office.com/en-us/article/irr-function-64925eaa-9988-495b-b290-3ad0c163c1bc

New to BRRRR - quick question here......can someone help me compare the out of pocket cost between two purchasing strategies:

1.) use hard money lender upfront to fund cash purchase of property + rehab cost then cash out refinance to conventional mortgage at 75% LTV off the higher ARV

2.) use conventional mortgage upfront with 25% cash down, pay for rehab out of pocket, then cash out refinance to another conventional mortgage at 75% LTV off the higher ARV

Essentially it boils down this: will the hard money interest/fees in option 1 always be lower than paying closing costs on conventional mortgages two different times in option 2?

Heading out to KC in late January for diligence and hoping to make offers on a few properties. Would love to network/meet with some local property mgmt firms. I’m out of state with plans to buy multiple properties in the area. Any recommendations?

Hey @Beth Gansereit! Very nice to meet you. I'm looking to push into KC early 2019. Would love to chat and introduce myself if you have time before the holidays! 

Cheers, 

Mike