All Forum Posts by: Brian Larson

alright, time for another update. it has been crazy the past few weeks (in a good way) and will look to continue into next month pretty easily. 

• Indy
  • Refi on Indy #3 in progress. My guy @Jerry Padillahandling that one. Hope to close the refi in the next few weeks. 
  • Construction on Indy #4 has started and should be on track for mid March completion. I will get it rented and refi'd asap
  • Indy #5 - I still don't have final numbers yet. This rehab will take some time
  • Indy #6 - the place I offered on actually came back around to a price the seller and I could agree. All good and closed today. This will be a light rehab so we will get it started next week and hopefully have it ready the same time #4 winds down. Then onto rent and refi. 
• KC
  • KC still slow. Have an interesting opportunity out there that i am going to pursue to see if we can beef up the pipeline of deals. I have a meeting Monday to discuss withe the team. 
• Notes
  • I will close on a 1st position performing note early next week. 12.1% yield.14 years left on note. Not bad. 
• Misc
  • i really ran into a cash crunch as i have so much in rehab state and i needed cash for this Note purchase. I found a new stream of private money so i was able to put another under contract and will do so once i see the PA (this weekend or Monday).
  • I have passed on many 'deals' that do not match my criteria. This is the hardest part but the great thing is that i pass on one that doesn't fit and a few days later a better/more aligned one comes across. Serve at the criteria's alter :)
  • I completed my DST and have begun getting bank accounts, cars, properties and notes into the proper entity.

My acquisition chart that i have on my wall in my office (hand drawn tracking) is starting to look silly with the goal approaching 66% complete in the first week of March (my fiscal year runs through 10/31). If i were able to sustain this pace I would average 1 property add per month and double what i set as a target. crazy. 

thanks for reading.

Quick math says it plays and should consider further dissection. Throw the numbers into the calculator on this site and see what it says.

Sounds like you understand construction so get a good feel for needs (roof, porch, etc) and just build out in excel the aglow over time and when you need the big capex spend for these items. That way your reserves meet your needs in the future

Good luck 

Hakim, both of those markets are really competitive and can be tough to cash flow. I am a big BRRR believer right now (see my thread below in sig for details) but since I live in SoCal, I only do this out if state. It definitely presents its challenges but allows me to do more for less.

Good luck

b

 don't get discouraged! You have only been registered since the beginning of this month. Way new to this, you will get going, don't worry.

This site has so much, so staying focused is key. If you want to do buy and hold (this threads topic), wholesale, flips, etc.... just pick one and lock in.

One thing you may have going or you, ability to buy your first place with little down, fix it up, then rent it. Lookup 'house hacking' for duplex options and 'FHA loan requirements' to get ideas on financing options.

As an example, lets say you find an older, outdated duplex for $200k (note, I don't know anything about Reno and its RE market so simply going illustrative with these numbers). It has 2/1 on each side and market rent for each side is $1.1k but that's if its updated. So lets say you buy it for list and do an FHA loan. Cool, you are out $7k (3.5% down payment) plus some closing costs. Move into one side, fix it up over time. While you do that, rent other side. Once its fixed up and other tenant moves out, switch sides, fix yours up and rent Reno'd side for full market value. Once your side is done you can sty Kr leave and rent both.

Keep in mind, in this scenario you self manage and thus save 10% of the 50% rule in expenses so now you use 40% as your quick estimator.

Last thing, check out Brandon book on No, low Money down investing. Chapter 2 covers a lot of what I have above in much more detail.

Don't get discouraged man. And good luck

@Jerry GoingYou have some of the best that already chimed in but definitely heed the 'its just a placeholder' rule of thumb to help you quickly eyeball and deal and pass or dig in deeper. As you define your market you will start to see what makes up the 50% sub-percentages. For instance in some markets (TX as an example) the taxes are a huge portion of the 50%. In a market with extreme weather you will find that your capex number needs to be a little higher so you can save that cash for a new HVAC, roof, etc. 

The way i analyze deals. Get the wholesaler brochure/MLS listing/etc. price out mortgage on the price i would offer and then use 50% to quickly yay/nay the deal. I then dump in the estimated 'real' expenses (insurance and taxes should be easy to get fairly accurate numbers for) and then i drop in % of rent for Capex/Maintenace, PM and vacancy. I do 10%/10%/8% on those.

I hope this helps and isnt totally redundant.

Wish I could join you but my Anniversary with the wife on a far away island sans kids is too good to pass up. 

I echo what others have stated. William,  JK and the Storybook team are awesome and are great for out of state investors. 

Enjoy the event

 Sorry Tiffany,  it didn't alert me that you wrote this.  Apologies. 

There are a few ways but the easiest (yeah,  easy for me to say)  is to get a private money loan for the amount you put in (purchase+rehab) and then do a rate and term refi immediately... Or as soon  as the property is rehabbed and rent ready... You will need internal appraisal. 

What I have found is this.  I asked a colleague and a family member if they wanted 7-9% interest backed by a property.  One family member jumped and now I get random friends of theirs asking if I need more.

The first private money is the hardest but it gets easier once they tell others. This then allows you to run more than  1 simultaneously and scale.  

For instance,  I have put 3 props under my belt in 6 weeks and am now finally at a point where I need my refi to hit on an earlier prop so I can get another added. 

Good luck and please ask more if I wasn't clear.  I keep hopping on these boards late and feel like I am zombie answering... 

Sure. they are an REI group that meets monthly. FIBI is 'For Investors by Investors' and they have chapters all over LA (and maybe even into NV and AZ?). When i was looking for an investor group to go to i wanted to find one that wasn't filled with pitches/schemes/etc and this was the right fit. Generally you they have a topic with a speaker or panel (economy, current conditions, out of state buying, private money, etc) and the agenda is something like 6-7 networking, 7-8 speaker, 8-9 networking.

It costs like $20 per session to cover the room/food/etc. I would say some of the speakers have been outstanding and the networking has been solid. I have done several note deals with a group I met at a MB event. 

It looks like they have an event in LB tomorrow. 

http://www.meetup.com/forinvestorsbyinvestors/

I hope that helps

Welcome Todd. Good to hear you have had some success here in SoCal. Its tough. I feel like everyone in LA area thinks they know RE so there are more investors willing to overpay and more sellers with unreasonable expectations. good luck and check out FIBI Long Beach if you can. Its a ZERO guru networking event with solid speakers. You may find deals from connections there.

I am not endorsing, just suggesting to check it out as I have met great folks at the Manhattan Beach events. No SoCal deals yet but its also not my focus

I agree with Leland. if you think the deal is 'marginal' then it might be best to wait. I know it is exciting and you want to get started. I also know that when you start hearing about low inventory and expected appreciation...well, it might be time to assume that may not happen. 

In my mind, you will do great with a house hack either way but i would stay beholden to the cashflow and NOT assume appreciation or worry you will be priced out. I do not know your market but if its like many others, there is a chance we see a downturn in the next year+

I also would look for one that is not recently rehabbed. Save some cash and fix it yourself. The best way to future proof your investment is to add the value/equity yourself. Even if the overall ARV drops some, you didnt pay the ARV, you paid well below and added value on your own.