All Forum Posts by: Noah Chappell

@Jeff Holmberg sounds like you've doing a lot of great research, and are just at that point where the theory needs to become practice for you to progress in your learning. Don't over think things, just stick to the fundamentals. If you're planning on buy and hold, aim for a great investment in a great market from the beginning, and only plan to sell if you find a better return on equity and can 1031 out. No matter the scale, the number always need to work, whether it's a highly priced hot market like Minneapolis or a small town. If you're looking in MN, I'd suggest a strong more peripheral market like St Cloud for ex where you can find a decent duplex needing some cosmetic work for around 100-120k, fix it, refinance out. To do that in Minneapolis - St Paul right now admittedly you need very strong local knowledge and a good network. When it comes down to it, you just need to jump in keeping in mind the fundamentals, and your understanding will blossom from there.  

@Tiana Towns congrats! I've rarely seen so many super stars drawn to one post! 

I agree with @Bruce Runn in that even in this hot and relatively expensive market (for the Midwest) the goal is to cashflow $100-200 a door monthly, maybe more if you're crafty. The only way I can see you justifying holding onto your non cash flowing property would be if it was a great appreciation play as per its location and you put down a very low down payment. In this case it might be worth it to leave that money in the deal. Over time it will cash flow (unless rent control happens..). 

In terms of getting your next property in 6 months, the market is red hot, and deals that make any sense from an investment perspective are nearly absent from the MLS. You might have to get more creative with off market stuff. You could wait to see if more inventory hits the market late 2021 as some are saying, but I personally tend to doubt prices will go down much.. too much stimulus and too many safeguards against foreclosure.

@Lara Nicole I'm feeling like your vibe is to get into some 1-4 unit properties. I'd consider using 20-40k for a low down payment house hack on a 2-4 unit property within Portland, then taking the remainder and using it for 20-25% down on a BRRRR or near BRRRR maybe an hour or so outside of the city where prices are lower. For the BRRRR I'd look for a decent property that would qualify for bank financing, not so distressed you need hard money, to get your head around the process for your first deal. I think starting with that you'll have plenty to keep you busy.

@Sahand Banisadr this property seems decently solid for a first purchase, exceeds the 1% rule and in good condition, etc. I'm not understanding why the electricity is an issue, given one of the major advantages of single family is that you can offload all of the utilities onto the tenant.. of course I'd look into this for ecologic reasons. Electricity isn't like gas or water in that it can't really spring a leak and run up your bill, it would have to be over use on the part of the tenant. I think it sounds like a solid deal overall if this is the type of property and market you're aiming for. A good bread and butter core of your portfolio. 

@John Smith just like a realtor can set up an MLS search for 1-4 unit properties, they can set one up for commercial as well. I'd get in contact with a realtor in a midwestern city with solid market indicators, then when ready you can make some offers. A 10 cap may be asking a bit much in a decent C area, but an 8 may be alight. Given the 45d requirement to identify, you may really need to hustle and network to find something stellar, but if you're ok getting something solid off the MLS you'll likely be ok.

@John Persons the way I see it, waiting until the market softens is not a great strategy, since the skill set required to be successful is similar in any market condition, and there really will never be market conditions that compensate for a lack of experience. A great deal now is a great deal, just as it will be in 6 or 12 months. I'd say purchase now using the fundamentals - under market price, in need of cosmetic rehab or having some other type of problem you can fix that drives other off. If you do that and have a decent debt service coverage ratio going in, you'll withstand market fluctuations and build up equity quick also. This will really catapult your BRRRR investing forward.

In terms of how to refinance, there is no hard and fast. You need to call 15-20 local banks and credit unions to find the best terms on a commercial or portfolio loan. The first or second loan pay be good but not the best, but by the time you get to know the lending department and establish a track record, they'll accommodate you in any way that's reasonable. 

@Wes Martinez welcome! My advice would be to go for your first deal in AZ. You should be able to find a reasonably we'll performing deal within an hour of the major metros. You mention multi family, so I'd avoid the "shiny object syndrome" and go for a nice duplex from day 1. Go for something that needs some rehab, but has good bones. This will help you get your head around all the skills you'll need for success, and will increase the velocity of your money. Start building the team today by calling realtors, prop managers, contractors, and lenders. 

@Nik L. @Scott Wolf beat me to the punch line.. why don't you buy 4-5 triple net buildings? Maybe pick out the top 10 performing fast food chains in your area or in other select states, then go to a big broker and start searching for deals. 

@Aemon Gariety I agree with @Brett McManus, I think it's really just about learning the rules of the game, and being the best player. There are winners in every market. In my mind proximity to the property, at least in the beginning trumps local laws, but that's up to your preferences. If you're really wanting to go towards the most landlord friendly states only, maybe look up Clayton Morris' YouTube video explaining which states these are. 

@Parth Sehgal I think you're going to need to be realistic and strategic if you're going to reach your goals. 15% IRR yearly with a goal of 5M in 15 years that is virtually passive is ambitious.. Real estate involves a lot of front loaded work, especially in the beginning, so I do feel you'll need to put around 20 hours weekly extra above and beyond your W2 to get things going. You're a high earner and don't need cash flow, and you have local access to historically high appreciating markets, so this would be your angle. Be careful not to speculate.. the property needs to cash flow at least a little, even if your strategy is appreciation over 15 years.

Example plan: You're a high earner so can save at least 50k after taxes yearly. Put down 20% yearly on a 250k turn key property that breaks even in market with at least 4% annual historic appreciation, and good chance of continuing this way. All 15yr mortgages. In 15 years you'd have 4-5M net portfolio value. This would of course be quicker if you use Brandon T's "the stack" method, which most investors naturally do.