All Forum Posts by: Bryan Montross

First, I would say don't make rash decisions just because you are getting discouraged. Have a conversation with your PM to find out what is going on. Make sure you know exactly what they are doing to market your property to find the right tenants. They may have tightened up their acceptance if they have seen an uptick in evictions. Ask what the market is doing. Have you listed the rent price too high? Try dropping the rent price a little and see if that works. Also, if you don't like the answers you get from your PM, maybe you need to look around for a new PM. Or, if the PM says the rental market is not very strong right now, then maybe it is time to sell. Just make sure you collect more data before making a decision.

I think @Brandon Croucier has the right advice. Look for a DSCR Cash Out Refinance. The big thing is that you just need to keep asking around until you find a lender that will help you. Many will say no, but once you find the one that knows what you want and can give you that loan you will be golden.

I really wouldn't do anything different rehabbing/flipping late in the year, except maybe adjust my underwriting. I always look at current ARV and use that or lower for my sales price, never higher because I can't guarantee the market. If it does go up, great I just made more profit. I might use a lower ARV if I know my market slows down during my projected timeframe to sell, but all of this is done before I buy the property. Once I have it, everything is the same.

I would never hold a property after completing the rehab to wait for a couple of months thinking Spring might bring a better price. Usually holding costs and lost opportunity costs far outweigh the gain in sales price.

I would also have multiple exit strategies and if prices dropped more than I wanted could I keep it as a long-term investment and have the rent cover my expenses. In the long run, that property will go up in value and this may be a viable option. Again, that is just thinking through my exit strategies and knowing what I will do in certain situations to make my best return. It might even be sell at a loss and just move on rather than chasing bad money with good money.

Hi, welcome to BP.

I do not invest in MN, but wanted to provide a couple of thoughts from my own investing. If you want to know what to expect, then expect the unexpected. Something always seems to not go as planned. Just be ready for that make a decision and move forward. Something else I found with BRRRRs in my market right now is that even if my equity may be enough to cash-out everything I put into the deal, the rent I could get would not cover that high of a mortgage. Sometimes it might be better to leave some money in the deal to get a better cash flow and provide a little more of a safety net.

I hope that helps. Sounds like you already have a good start and you are in the right place to get the advice you need. Good Luck!

I am also in the boring buy and hold camp. I have only sold one property over my 20 years of investing. It was the first property I owned and lived in. After renting it out for a couple years it had appreciated to the point it was best to just sell and move on. Save some capital gains tax and get out because it was then losing money and not appreciating the way it should. Overall, still a win.

Even the property I was once under water on has now appreciated well above the purchase price and is now bringing in a good cash flow. It just takes time and patience. Like the say with the stock market, the best performing stock portfolio is that of a dead person. Only somewhat true for buy and hold, but don't really pay attention and soon you have more wealth than you know.

Regardless of whether it was the right decision or not, how do you move forward? At this point I think you wait until the end of the lease and see where things are at. They may replace the fan and put in the old fixture in whatever condition it is now, or maybe they realize it is damaged and buy a new one to put in. Just follow the lease and the terms you agreed to for the fan and charge for damages as appropriate.

One other thing is you could pre-emptively go back and ask them to keep the fan. This may keep them from doing more electrical work if they agree, but at this point they paid for the fan and there is no agreement for you to keep it, so they don't necessarily have to agree. You may be forfeiting damage to the old fixture, but maybe saving from them doing more work. If that is the route you want to go, but they want to keep the fan, you could always buy them a new one.

Regardless, I think you need to honor the agreements already made. If you want to make new agreements that both sides sign, that may be a great option as well.

Just a couple of thoughts as you compare insurance. Make sure you are trying to compare apples to apples. Are you getting the same coverage for the quote from each company. If there are differences, understand what the differences are and how that might affect you. A higher deductible for a lower premium might be good if you are diligent about saving that money to have available in case of a claim. If not, maybe paying the higher premium is worth it.

Also, as already stated above, make sure you are looking at rental dwelling or landlord policies. That will make a difference in the quote and the coverage. The last thing you need is to get a homeowner policy and find out it isn't valid because you're not living in the property. Additionally, don't confuse a renter's policy with a rental dwelling policy. As long as you are clear with the agent they will help get you in the right policy.

I think you need to be very careful with your plan. Just because an architect says you can put 7 1200 sqft homes on a piece of land doesn't mean the county approves that. They county may have approved you to rehab the one property, but make sure they would approve you for what you want to do. Also, I can imagine 7 x 1200 sqft homes sitting on one lot that is less than 1/2 acre. Even if that is the case, you start getting diminishing value. Each one you add will actually make add less value each time. So instead of having $250K times 7 houses it's going to go down. I don't know how far, but that is something to consider that you may not be getting all your value out as you refinance after completing the later properties. Good luck with the strategy you choose and hopefully you make some good money.

I think insurance in coastal cities is a real concern. It was devastating the damage that just occurred due to hurricane Helene. One of the comments I heard is that in Florida, Citizens, the State sponsored insurance, could basically run out of funds due to the amount of damage. This doesn't mean you stop investing in those areas, it just means you need to factor that into underwriting and be prepared for it.

Michael--

I feel like you might be overthinking things. What part of real estate investing excites you? That is what you need to do. The strategies you mentioned above seem to be more advanced strategies, but if that is what you enjoy, learn as much as you can and get into it.

With minimal income, I would suggest saving up some money, buying a new primary residence that you can house hack, and keeping your current property as a rental. It's simpler than REOs or Sheriff Sales, and you already know how to do it. I really recommend keeping things simple at this point, grow your income, and grow your knowledge.