All Forum Posts by: Michael Myers

Hey everyone! I'm looking to start buying rentals (BRRRR strategy) in south Fort Worth area (roughly South of 30, West of 35W, including just South of 20), and I'm wondering what people typically use for underwriting amounts for vacancy, repairs, and CapEx? Currently I've been screening deals with 8.5% for vacancy, $125/mo for repairs, and $125/mo for CapEx, but I have a feeling that might be too conservative? We're planning on rehabbing with B to B+ finish-out, even if the neighborhood is C to B class in hopes of attracting great tenants who stay a long time. Looking for feedback on what y'all have seen work well in the past!

Hey everyone, I'm wondering what your Buy & Hold, BRRRR, and Flipping company policies are. Do you have specific ones that you've had to learn the hard way, aka that are "written in blood"? In Jay's Book on Negotiating Real Estate, he mentions referencing a company policy during a negotiation that states the company must take possession of the property at closing (no lease-back), which seems fairly straight forward, but definitely could have caused some headaches if it wasn't followed. So I am interested to hear what other policies you have cemented into your businesses, and whether a specific situation brought them about, or if they are just general good practice.

@Taj Hammond @Luke Reid

Just because you use an FHA to initially finance the purchase doesn't mean you can't refinance to a conventional loan in the future. Taj is right that typical BRRRR starts with a cash purchase then refinance after the rehab is complete, but it doesn't "have to be" that way (as if there are rules). To me it sounds like a solid plan as long as the numbers work out! Use the low money down of the FHA, and especially if you can work the 203k angle to finance the rehab as well, then once it's rehab'd refinance to a conventional loan. Just got to make sure you ARV is high enough so you can pull most if not all of your money back out.
Here’s another post where someone was doing a similar thing: FHA to Conventional

One more thing - make sure you research all the implications of an FHA so you can make sure you qualify and follow all the rules, there are quite a few of them from what I understand. Best of luck!

@Jake Hottenrott - thanks so much for the response! I enjoyed your blog post as well, very simple and straight to the point.

Hi Everyone! My business partner and I are looking to start doing long-distance investing through BRRRR. I live in CA (yay $800 LLC tax!) and he lives in Houston, TX, but don't necessarily plan to invest in either of our states. We are beginning to look around for a CPA and an asset protection attorney.
Any recommendations on great questions to ask each? And anything we should be on the look out for in terms of credentials? And finally, any suggestions for which state they should be located in, or does it not matter? Any comments, suggestions, or referrals welcome! 

Thanks for the reply Katie! That was another thing I still have to research. The house is as you described, with a much lower tax assessment than it would have if it was reassessed. What kinds of actions cause the value to be reassessed? If we were to refinance with the same lender, would that trigger it? 

After running the numbers, it doesn’t look like I’ll be able to buy out my brothers, and this is the only asset so no way to make it work another way. Lucky for us, we’re pretty close and easy going, so I don’t foresee issues making the rental business work between us, just makes taxes a bit more complicated. 

Hi everyone, first time poster here! Me and my two brothers recently inherited a single-family home in the greater Bay Area, CA. We’re looking into our options for renting the house out. 

Wondering what your thoughts are about the pros / cons for setting up an LLC or DST with three members? Does it make things infinitely easier to see if I can buy out my brothers and do everything myself?

Thanks!