All Forum Posts by: Brian Moore

Thanks Bill! I'm reviewing with multiple parties but it looks like this one is falling into the 'if it looks too good to be true'  bucket. Appreciate your feedback!

Hi @Spencer Tillman, welcome to the forums and the wonderful world of RE investing! I got my start in Chattanooga rentals 5 years back on these same threads and now have a couple dozen units due in large part to the guidance of some generous BP mentors. Here to pay it forward, let me know how I can help!

Hi @Thomas Rutkowski and @Bill Exeter, I just heard about Section 453 yesterday and reviewed this thread. Could either of you guys provide an update on how this has evolved? I read the following article and the reference to the 'Dirty Dozen'; hoping that we have a better idea of whether 453 is the Holy Grail of unlocking cash and deferring taxes, or if we should run the other way. Thanks!

Hi Everyone, I have a conflict and unfortunately can't attend BPCon. Selling my ticket for $800 via Venmo, Zelle or Paypal. Thanks!

I use many of the methods listed (Zillow, Realtor.com) with Rent-o-meter as a starting point. One of my oldest sites that nobody mentioned is padmapper.com. I believe it aggregates data from several sites like Craigslist and apartments.com, and plots them together on a map (which is commonplace now, but was unique 5 years ago!). Also Hotpads and Rently sometimes contain listings not mentioned elsewhere, so it's always good to cross reference multiple sites.

I'd also mention (when you are leasing or renewing your rentals) not to be afraid of challenging your PMs numbers if you feel confident in doing so. Hopefully you both come up with a similar number, but they are incentivized to place a tenant (typically with 1/2 month rent) and will likely be at or below market. You know your product and all of the improvements in-depth, and if you feel there's more meat on the bone, then it's your role as the asset manager to go for the higher price.

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $193,000
Cash invested: $63,000

Contributors:
Danielle Roos

This was my first SFR in awhile because I've been purchasing mostly duplexes. Looking forward to the next one!

What made you interested in investing in this type of deal?

I have a colleague who relayed his successes with $200k houses that rent for $2,000 and tend to have great long term tenants and better appreciation than duplexes, so I thought I'd give it a shot. It was also a 5 bedroom which I feel will help land a very long term tenant.

How did you find this deal and how did you negotiate it?

This was my first purchase from a wholesaler (shout out to Hawthorne Holdings!) and I look forward to many more.

How did you finance this deal?

Conventional financing 80/20 LTV at 4.25%. I've worked with my lender on 10+ loans and he assured me we could close in 20 days so we were able to accommodate the seller's timeline.

How did you add value to the deal?

The property needed mostly cosmetic rehab, but I like to go overboard with remodeling when I purchase buy and hold so that I get immediate benefits of top dollar rent and little maintenance for the first few years. I spent $25K in all

What was the outcome?

Rented for $2500/month with cashflow of $1060

Lessons learned? Challenges?

Same challenges with getting bids and contractors started ASAP, but I'm happy with the speed at which we got this one to market. I'm also caught in limbo with $63K in the deal which I wanted to BRRRR out, but interest rates don't seem to be cooperating. I don't need immediate liquidity so I'm going to hold off on the cash out refi. Current appraisal is likely $240-260K.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Danielle Roos with Hawthorne Holdings wholesalers and Highlands Mortgage out of Texas for conventional loans.

Hi @Brandon Harrell-Abbey, I'm with First Property Management and @Brian Levredge. They take great care of me, are investor friendly, and have in-house real estate agents. Great one stop shop! There's also several past posts on this topic if you're looking for additional input. Good Luck!

Hi @Danny Roberts, definitely check out the Chattanooga RE Facebook group which is fairly active and there's usually a few deals per month posted.

Hi @John Britt, I connected with you a while ago on the wholesaling front. I'm closing on a property shortly and actively searching for the next one- please reach out if you've got anything good, thanks!

Agree with @Steve Vaughan a big factor for me is ROE (return on equity). I'm of the opinion that cheap debt on cashflow producing properties is the best hedge against inflation and therefore it is a good time to evaluate your equity in each property and whether or not to apply more leverage. Cash out refi's and HELOCs are options if you wish to keep the property, but the best interest rates and LTV ratios (greatest leverage) are often available on new purchases. Coupled with the fact that you are already thinking about relocating your investment(s), getting additional leverage is an added benefit.

# of years of cashflow is not a metric I personally consider and I think it has a lot of flaws. If you held for the 10 years of cashflow, you would also have 10 years of appreciation which will likely surpass the amount of cashflow (vs. if you 'cashed out' and held cash). My only replacement investment for my rentals would be more real estate and the investment I 1031 into would also have cashflow and appreciation benefits. If your intent is to sell your rental(s) and leave the RE asset class then I suppose the # years of cashflow metric might be more applicable, but I think it heavily relies on the assumption that you've accurately timed the top of the market which requires a crystal ball and sorcery above my pay grade.

Hi @Peter Davis- If you purchased for 50K and you sell for 100K, your capital gain is 100K minus 50K minus capital expenses you made to improve the property minus closing costs on both sides of the deal. If these are your real numbers, you might not have enough gains to even justify doing a 1031. 1031s cost $600-700 and have timeline restrictions so you may want to just pay the tax. However if your numbers are much larger than this and you feel 1031 is the right strategy, the capital gain from the calculation above is the amount that must be carried forward into the next deal in order to defer all capital gains taxes.