All Forum Posts by: Robert Ferrell

@Joshua Johnson Hey Josh, I'm a newbie as well, but after listening to over 200 espisodes of the BP podcast and reading countless articles and form posts, I think I can offer some advice (most of it instilled straight from the podcast).

First, living in a particularly high property cost area should not detract or discourage you from being able to aquire your first property. This issue is constantly causing newbies like us to feel like we are priced out of the market before we can even begin. Believe me, I live in California, I understand high priced property. But, Brandon Turner and Josh Dorkin often dispell this fear quite easily on the podcast. They say that, essentailly, no matter where you are in the U.S., if you are willing to drive about an hour or two away, you should have no problem finding properties at significantly lower prices. This tends to work for anyone, regardless of what high value area you may live in. There is usually somewhere just a short commute away that can offer prices that work for your goals.

Secondly, the fact that you (and I) have stumbled upon a site like biggerpockets should only serve to inspire and educate us further. Although, I'll admit, witnessing the intelligence and passion some members and podcast guests have exuded has intimidated me and made me question whether or not I really am cut out for this real estate game. But those are just limiting and fearful beliefs that we must learn to cast aside. We can't be afraid that there are people who are smarter and more passionate than us, we should actually be excited! Because these are the people who are happy to teach what made them successful, they take pleasure in sharing with and guiding newbies like us. They don't want us to suffer the same mistakes they endured when they were coming up. Having access to those kinds of people in a forum such as this is immensely invaluable. I have learned so much from people in the forums, stuff that I probably wouldn't have discovered in years if I were going at this alone.

So, I would say to you, don't allow fear to stop you in your tracks. Don't allow your lack of knowledge and experience to keep you from asking questions and attempting to make moves. This site is here for our benefit, and though we may feel like there is no way we can succeed when there are so many other successful individuals out there already, we must remember that there are plenty of deals to go around, and that no single investor can buy them all. Therefore, these people are just as interested in helping you navigate your way through a deal as they are with closing on their own.

Hope you find some of this useful. Goodluck.

Is there anyone out there who has used credit cards to fund the purchase of a rental property? I am planning to use my cards as a tool to aquire property and then get a cash out refi as soon as possible to pay off those high interest cash advance/balance transfer fees. Then, rinse and repeat (aka the BRRRR strategy). If there is anyone who has done this successfully and would be willing to talk about the process, I would be very interested to talk!

@Tony Nguyen So are these banks keeping the loans in house rather than selling them off to Fannie and Freddy? Is that why there is not a cap on the amount of refi's you can accumulate?

The reason I am asking this question is because I've come acrossed quite a few videos now on youtube where people holding SFR's are only accounting for maintenance and not cap ex (this is after complete renovations though, so I'm assume big ticket items like the roof and driveway, etc should be set for the next 15-30 years). But, some of these same investors have stated that if they were buing a MF property, they would account for maintenance and cap ex even if a rehab had just been completed.

I feel that it is much safer to include both maintenance and cap ex no matter what the property type or rehab status, and I am not asking this question as a way to cut corners and add extra cash to my pocket each month. I am genuinely concerned with what successful investors are doing.

I currently do not own any rentals but would be very interested in hearing what those of you who do think about this matter. Thanks!

 
Glad to hear that the turnkey model actually works. I am from California and am considering going with a turnkey company to purchase my first out of state rental. Like you said, there's so many people out there with little information who don't understand the process (myself included until just recently) and can't understand why a turnkey provider would do what they do. But I love your tip about not allowing opinion and misinformation to scare you from exploring the option. I know that I won't!

@Melissa Kirchhoff Thanks for the response! So if the banks are considering them essentially like a mortgage, does that mean that the number of refi's a person could be eligible for are capped between 4 and 10? I too have heard the same about LTV and appraisals. I plan on doing the BRRRR strategy, so and LTV of 70-80% would work just fine. Also, I've heard that some banks are now starting to use out of state appraisers who don't possess a strong understanding of the local market, thus creating appriasals that are way too low and have to be disputed.

Hey everyone,

So my question is, what is the difference between a cash out refi and a traditional mortgage. Now, I know that a refi is when you pull cash from a property you already own and have equity in, and that a mortgage is a note that you pay on when you dont own a property outright. What I am really trying to find out is from a bank's perspective. Do they consider a refi essentially the same as a mortgage, meaning you can only accumulate 4 or 10 (whatever the number is currently) before you will be unable to do anymore, or is the refi considered something else entirely and not subjected to that limit?

Also, Im sure it ranges from lender to lender, but what are the general term lengths on a refi? The properties I am interested in would have an ARV of around 40-60k. Can you do a 30 year term like a regular mortgage, or are refi's generally shorter in time?

@Andrew Johnson Haha, good to know! Thanks for the info.

@Brian Pulaski Hey, thanks for the reply! So it would be better to use an appraisal or to check comps in order to better determine the ARV? Also, generally how far should my range be when looking at comps?

Hey everyone,

There has been this vacant SF house on my street for the last year and it is now finally listed for sale. I believe it is a foreclosure but am not 100% sure (any help on how to figure this out would be great). It is listed at $165,000. So here is where my question comes in. I pulled up the property on my county assessor's website and it says that the "Roll year 2017 assessed value" of the land plus improvements equals about 108,000. Does that mean that in its current condition, that is all the property should be worth? Which would make the asking price of $165k way too much. Or does that assessed value not have anything to do with what the property should be purchased or sold for? And if not, when and what should these county assessments be used for? Also, the property is in pretty heavy disrepair and would need a good deal of work to become rent ready. Thanks!