All Forum Posts by: Riley Way

Investment Info:

Condo buy & hold investment in San Diego.

Purchase price: $318,000
Sale price: $495,000

My wife and I bought this property three years ago as our primary residence, then moved out in march of this year. Refinanced it as a rental from 3.125 down to 2.25%!!! We are cash flowing $300 a month and it was appraised this year at $430k!

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

I saw that Imperial Beach was an under-developed beach town. I analyzed the area and saw that all the other beach towns were way pricier, thus it contained huge potential growth.

How did you finance this deal?

Zero down VA

How did you add value to the deal?

Kitchen remodel, tore down the old closet walls and created a better one

What was the outcome?

$150k profit

Lessons learned? Challenges?

In the right market, deals are easier. Leveraging the strength of each loan is definitely important. This was my first time ever doing any "DIY" type of work and I found out how easy it was! The hardest part is starting.

@Erik Stewart

Well, not sure I yet qualify for the “I’ve made it” club but I grew up in a small town in Georgia. My parents grew up so poor they didn’t know when they would eat again. So, they slaved away at factories to keep food on the table and a decent life for me and my brother.

Growing up, my brother and I would always go door to door trying to find work to get extra money. I thought money ran the world and I wanted to run the money. I thought money was the key to the world. My brother was caught up in a lot of trouble and never graduated high school. I decided to go to college and become an actuary, because they made the most money in the accounting world.

I got caught up with bad people and was solicited by gangs (my friends) to run drugs for them. I had an awakening when this happened. Decided to get out of my life and hit a hard reset button. So I joined the navy and went into special operations. Met some people with INSANE drive and passion. This really helped shape who I am today. With that same, always pushing forward mindset, I apply it to everything.

I decided I wanted to grow a real estate empire. I’m still in the beginning stages, with only one investment property, but within 5 years, I have plans to purchase another 4 doors. I know these aren’t huge plans, but hey, Im still working a more than full time job!

@Marcel Correa

It’s a condo located in San Diego.

@Joe Villeneuve

Well, the cost was zero so ROI would be infinite I suppose.

This all spawns from my will to grow and get more properties. I saw a pile of equity and thought I could split it into two down payments. How would you suggest that I get my second property? What do you think about turnkeys? Would you suggest a BRRR and hold to a newbie like me? I wouldn't pull the trigger until I dive into learning a bit more so I don't mismanage the finances.

@James Ma

I used a zero down payment VA Lon initially which therefore did roll the down payment into the loan three years ago. This is a interest rate reduction refinance with truly zero closing costs.
the property value has come from the 10% appreciation per year. The refinance came with a free appraisal which estimated value between 410-430k. 
I keep reading everyone cash flowing $300 with a $150k property which made me believe my property may be underperforming. 

@Joe Villeneuve

Joe, I do not mean to mislead you by saying 1%. I do not care about the 1% rule particularly. I was moreso quoting my actual annual net income ($3,600) out of the 318k mortgage.

I am posting in concern for potential opportunity loss.

Edit to post: meant to say about 10% increase per year for three years not 25%

Hello everyone! Happy thanksgiving!

Like the title says I am a new investor (one year into it). On my first property, we moved out earlier this year and have been renting it out. I refinanced and will dive into the numbers for you guys.

Initial down payment: $0

House value: $420,000

Mortgage: 318,000 @ 2.25 fixed

Mortgage payment $1,648

HOA: $350

Cash flow: $300

We don’t save extra money for expenses every month because we just have $5,000 sitting in a savings account for rainy days.

So, currently we have $100k in equity (25% growth per year of ownership) and a low cash flow. My question to you guys is: is this a bad investment since it only brings in 1%? Obviously the insane property value hike is nice. But what if that wasn’t the case? Should I keep it or sell it, cash in the equity and reinvest elsewhere?

Investment Info:

Condo buy & hold investment in San Diego.

Purchase price: $318,000

My wife and I bought this property three years ago as our primary residence, then moved out in march of this year. Refinanced it as a rental from 3.125 down to 2.25%!!! We are cash flowing $300 a month and it was appraised this year at $430k!

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

It started out as our primary residence. Since San Diego is military heavy, we decided to keep it and rent it because real estate investing has always been our dream! (My wife is a real estate agent to boot)

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

Searching through the MLS, we failed to negotiate well because we thought it would appraise for less, so we paid $20k more than we wanted. Talk about a first deal mistake.

How did you finance this deal?

Shout out to Loan Depot for the insanely good VA streamline Refi! Called 4 other lenders, two said they could match the deal but not beat it, the other two couldn't even match it! (2.25% with ZERO closing costs)

How did you add value to the deal?

My wife and I are hardcore DIY'ers. Between the two of us, we have done everything from floors, to custom cabinet builds, baseboards, drywall, electrical, minor plumbing, built a mantle. So in this rental, we painted the cabinets and put new hardware on, installed new countertops, added built in closets, and act as the handyman/woman to reduce costs.

What was the outcome?

Four rental applications within three days of it being listed! $2300 rent, $350 HOA, $1645 mortgage and escrow.

Lessons learned? Challenges?

Deal negotiating needs improvement! Also, my property manager skills needs improvement! While we are legally good to go as landlords, I would like to develop our "product" more. What that means to me is to become more professional and plug and play, which will become more important with the more properties we acquire.

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

My wife being a real estate agent helped us cut out a whole party. I would definitely recommend Loan Depot! I can give contact info upon request!