All Forum Posts by: Jeff Filali

Purchased my first Oklahoma rental in 1997 and own a large portfolio today and am still buying. It's always been a good, affordable market overall, but you have to know the markets well, as there are good and bad areas for sure. Also, with current interest rates, the BRRRR strategy is almost impossible because even with lower average property values, the rents are also low and the ratio prevents the ability to refinance all of your capital out and still cash flow. You're lucky to end up anywhere near 1% rent:"all in" ratio unless you buy at a substantial discount rate. Pre-pandemic we were averaging closer to 2%+ on most rentals, meaning if you were all in for $100K, the rents were closer to $2K. Now, those are unicorns!
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Jeff Filali

You mean $100-120K "all in" or just purchase price? It's harder to BRRRR in the Tulsa area now due interest rates, you definitely have to buy at a great discount in order to be all in low enough to
get all of your money out and the rents have to be high enough to still cash flow after all expenses (PITI, Mgmt, Vac's, Rep/Maint, CapEx, HOAs, Util).

Based on being “all in” $120K in order to BRRRR and still cash flow at least $300 mo:

$120K cash out amount - at 7%/30 yr ($150K+ ARV)

PI = $800 mo + Taxes $150 + Ins $150 = $1100mo PITI

RENT would have to be at least $2000 mo

- $1100 PITI

- $200 mgmt (even if self mng, it’s exp for time)

- $200 vacancies

- $200 Rep/Maint & CapEx

= $300 mo cash flow. If you don't have HOA or pay any of the Utilities.
…..now the problem is in the Tulsa area that deal that rents for $2000+ mo and can be purchased “all in” for $150K is much harder to find. 

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Jeff Filali 

Hey @Caleb Thompson, reach out to me and I can probably help you here in Tulsa.  I come across house hack opportunities all the time when buying deals and highly recommend that as a starter move for most people. You can easily find my info on here, on Google or MrTulsa .com 

Plenty

What kind of rates?

Google real estate mentor tulsa 😉

Location?

Are you self-managing? If not and you're looking for Property Management I recommend PMI Green Country out of Broken Arrow. They've been managing my Tulsa area rentals for several years.

Having invested in rural areas and small towns over the years, I’ll just say the numbers sound very high for rural Oklahoma for that small of units.  I own units in good areas in the city of Tulsa that are 850-1000 sq ft 2 Bedroom/2 Bath and only rent for $850-1000 mo. I wouldn’t even buy units that small personally.

You definitely need to do more research and due diligence first.  Never ever trust the sellers numbers or what their broker tells you.  Do your own research.

Also, they’re not figuring in all the expenses for rentals: 

• ? $ for PITI (Principal, Interest, Taxes, Insurance);

• 10% for Management; (even if self-managing, pay yourself for your time)

• 5-8% for Vacancies; (Turnover happens & when it does it requires cleanup, repairs, listing, showing & leasing which can take up to a month easily.)

• 5% for Repairs & Maint; (Repairs happen even on new builds)

• 5% for CapEx; (Larger Expenditures will happen over time, so you have to figure for them.)

• ? $ for Utilities (if paid by you)

• ? $ for HOA Fees (if applicable)

I’d recommend starting with something closer to you for your first deal. 

Not enough information.

Why only 3 months? Why no income? What’s their plan after 3 months? 

There are people who do this knowing they’re going to stay longer until evicted.

In the current market it’s a sellers/landlords market.  There’s no issues finding good longterm tenants. 

Only way I'd consider this is if they also pay a deposit, sign a solid lease and I'd be charging more like it's STR rates.