All Forum Posts by: Michael Evans

Thanks @Cassi Justiz, I'm working with a hedge fund that is interested in working with a turnkey property company to expand their business by infusing cash and financing.

Any updates on turnkey companies in OKC?

Doesn't look like the reward potential is worth the risk, to me that is.

What ultimately matters to me is my annualized cash-on-cash ROI. How fast can I make my cash grow? I developed a complex system for vetting deals that uses a version of the 70% rule, the 1% rent to price rule (my number is 1.3%) and uses as much leverage as possible. My goal is to achieve at least a 25% cash on cash return on flips over a 6-month period or in the worst case convert the purchase into a buy and hold investment to earn at least a 10% annual cash on cash ROI after taxes. For me cash is king and I want to grow my cash as quickly as possible while managing and shifting risk.

If you are going to rent it, I would take out as much of the equity as possible (make sure it still cashflows positively) through a cash out refinance, and I would invest the cash in another property. You have to do a benefit-cost analysis of keeping the property and becoming a landlord, versus selling it and taking the cash to do something else.

If your rehab and ARV values are correct, I would do deals like this all day long. You're using your cash for 3 months and getting it ALL back, and then creating cash flow of more than $400, basically out of nothing. The question is how many of these deals can you find?

I don't thin the numbers are right: $35,000 purchase, $50,000 closing costs, and $35,000 ARV?

If you're looking for investment properties versus personal use, don't invest in CA. Your money goes further in the Midwest or South, where you can use the BRRR strategy to grow your money. You can also spread your money into multiple investments rather than having your eggs in one basket. I suggest looking at companies that specialize in providing turnkey properties for out of state investors. There is a popular one based on Southern CA(don't want to get in trouble by mentioning their name in the post) that your can research. That will allow you to get your feet wet without a lot of risk. I would only invest in CA if you're looking to flip or betting on appreciation (and I wouldn't recommend that at this time). Good luck!

Why are you paying all cash? Do you plan on doing a cash out refinance once you close and the property appraises for the higher amount? Otherwise, it is a waste of cash and potential return on that cash if you put it and keep it all tied up as equity in the house. Run the numbers if you were to use a loan and put down various amounts (20% - 50%) and calculate what your cash on cash ROI is.

If you paid cash for the property, own it in a LLC, and now want to get cash out, look at using private money. Definitely don't use hard money when you have that large of an equity position. They will be like sharks with blood in water to lend you money at outrageous rates for short terms in the hope that something happens so you can't pay them back so they can foreclose on your property. No need to take that level of risk with your equity positions. There are many private money lenders who would love to take a first lien position with a fully paid property, and charge a low interest rate and a longer term.