All Forum Posts by: Nicholas L.

Hi @Joyce Jackson doesn't sound right - but need more information.  Over what period of time are you talking?  If you're filing for tax year 2019, you need the numbers for 2019.  Are these monthly rentals, STRs?  How long have you owned them?  How long has your "guy" been doing your taxes?

Hi @Jose Pad I'm not sure I fully understand your question.  You should deduct all expenses in order to file your taxes accurately.  Are you only working with a single lender?  How long have you had qualifying income on the duplex (2 months, 2 years)?  Can you see if a different lender will calculate your rental income a different way?  Some HMLs have long term rental loan products - slightly higher interest rates but more landlord friendly.

Hi @Ehab Shoukry congratulations! "...your strategy HAS to allow you to get your money back" - GREAT advice. I was buying conventionally before discovering BP, and am ready to switch. Did you start with your own cash, or 1/2 your cash + 1/2 your friend's cash, to get up to your initial 20 doors? How soon did you switch to Strategies 1 and 2? Any issues with your very first HML?

Thanks again for the inspiration.

Hi @Nick Longstreet welcome.  Even "no money down" investing does not mean that you have no money, it just means (as you stated) using someone else's money (which doesn't have to be a private lender - it could be a bank, hard money, etc.) to complete a transaction.  I strongly believe that before you invest, you should have savings.  You'll need cash to close on any transaction, reserves to cover repairs and capex, cash to cover vacancy, etc.  This is the case no matter how you're doing a deal and with whose money.

Are you eligible for any first-time home buyer programs?  You could house hack, or if that's not a good fit for you and your family, you could purchase a property that will be a good rental someday, live in it while you save, then "graduate" to your next primary and turn that into a rental.

Hi @Naj Brock a pre-approval letter will generally make you more credible as you're making offers, regardless of the price.  Are you working with a real estate agent?  What do they think?

Hi @Paul Henning wow, tough issue if this is both a friend and a colleague.  I would (1) check your local laws to see what they say about giving notice for month to month leases in your area, and (2) do NOT offer the rent increase alternative if that's not what you want.

Hi @DeeDee D. wow, congratulations!  Can you tell us a little more about the numbers - was this all your own cash?  Is it still a single family even with the expansion?  What are the rents like?

Hi @Jonathan Davis wow weird layout, weird dangerous staircase! but looks like a lot of space. Can you really juice the ARV to $200K with just an $8K rehab? Is the $200K based on actual comps you got from a realtor, or just what you'd hope to get? Is the $1300 based on actual comps? I see you're financing the initial purchase which will also mean you'll spend more cash out of pocket to buy and hold.

Hi @Brad Morgan I'm interested in this topic as well, but still haven't figured out what the right balance is between incentivizing longevity and overly complicating things.  One idea I've come up with but haven't implemented yet is simply a one-time, small discount off the first month's rent each time there is a renewal, e.g. your lease is coming up, renew for 1 year get $25 off first month's rent only for another year, $50 off first month's rent only for a two year renewal, etc.  

There is still some complexity in implementing this because if your tenants are auto-paying (which mine are) it's actually not easy to do this.  I agree with @Greg M. that providing quality housing at a market rate is basically incentive enough, and that on-time payment should not be rewarded since that's the baseline.  It's renewal you want to incentivize because vacancy is such a cash flow killer.

I've bought small gift cards for select tenants at Christmas (using credit card points, so none of my own cash), and while I don't think it's increased my revenue, I know they've greatly appreciated them and I'll probably keep doing it - not across the board, but for select tenants.

If you haven't yet, check out Joe Asamoah's BP podcast.  He runs a major operation with this kind of stuff, but he's in a very, very, very, very specific niche =)

Hi @Aaron Hope congratulations on being ready to take action. Make sure you factor in all of the costs that it will take to BRRRR a property - closing costs when buying, holding costs while rehabbing, rehabbing overages, vacancy when listing it for rent, etc. It's not as simple as purchase price + rehab. That drastically understates the amount of cash you will need.

You also mention that you're going to BRRRR, but using conventional financing and putting 20% down. It is possible to BRRRR this way, but you'll pay more, and you need to be absolutely sure that the ARV justifies a purchase using financing. Typically BRRRR works better with all cash.