All Forum Posts by: Brandon Schlichter

lots of headaches with c class properties. Not that they are bad investments, it just would be hard to do them in true turn key fashion. I can't see a property manager charging enough to compensate and still get those juicy returns that make cheap properties attractive. This is all coming from a guy who has over 50 b and c class rentals.

I heard all sorts of complaints from people/investors/agents about buying rentals here in Circleville & Chillicothe.

I'm now at 51 rentals with another 3 in contract set to close within a month.

I love these markets because the competition is significantly less and very easy to buy a very profitable rental.

The biggest hurdle I've delt with is that the BRRR is that appraisals/comps are lower in smaller areas, so potentially harder to refinance but cashflow looks great.

My cap rates blow alot of areas out of the water. Sure you can do well in Columbus, but in a place like Newark its very easy to find. 

on a positive note, I talked to the new lender yesterday and all the appraisals came back, they were 5% higher than my own estimate so I'm quite happy.

They are excited to work with me which is a good sign. Darn their 500k limit.

I've looked at a couple local bank breakdowns of where they have their money. One bank that I have a few deals has about $50m of their $800m of assets in investor/commercial type loans, they're restrictive on it.

Another bank has maybe $200m with $25m or so in commercial/investors and they are seemingly great to work with.

I think the best thing going forward would be to work more towards finding a private lender I can shoot for 8%-9% with while also hitting up every bank within a reasonable radius of me.

 I think that's what I'll do maybe in 3-4 months.

I've got $250k worth of refinances in the pipeline, just waiting on appraisals otherwise they should be good. Looking at immediately turning the $250k over and buying out a older landlord ready to retire and his ~20 units, one of which is a great flipping  candidate (Who knows, maybe I'll get lucky and sell the flip candidate and pay off a chunk of the portfolio?)

@Account Closed - I'll have to check file notes, our big problems usually were asset value (We're at $70k ARV/property on average) and a few wanted a really odd setup where the properties were moved to a fresh LLC with the lender as a partner in the LLC which I wasn't a fan of.

SO FAR Colony seems to be a potential, the $500k minimum scares me a bit, but boy would it be fun to have all that money available.

 I don't know that I've ever talked cap rates to lenders, it doesn't mean much to them unless it's commercial (They seem to care SLIGHTLY when I talk about my quads but that's it).

I realize that market value is what matters, so when I've approached them in the past, my sales pitch was : I have properties I want lower LTVs on than most investors are asking for - 50%-70%. I'm even willing to pay 1% higher on rates than what you're asking on the normal commercial loans you offer. So in my eyes I'd think it would be a slam dunk to them.

Now having said all this, I've now filed 2 good years of tax returns (First 2 years in rentals the returns weren't fantastic as we were ramping up) but this last year was great and the 2015 return IMO was pretty solid. 

I've got ONE bank that said they'll take all the business they will allow for which is $500k for any one individual. I've got 5 appraisals ordered for tomorrow with the hope of cash-out refinancing $250k or so. That will provide capital for a good part of the year if I match last year's numbers in terms of buying, but once again I want to scale. So far as far as market ARVs go we're adding ~30% in equity to each property we acquire and rehab. 

Yes, sadly redlining does still exist in a very real way. I'd be happy to live in a neighborhood like where I buy if I had little money to spend, rent is cheap and unlike some D neighborhoods, you aren't gonna get stabbed or shot.

Banks however hate the areas because I'm sure they lost their shirts back in 06-10 when there were craptons of foreclosures.

@Andrew Syrios - MOST of what I've bought has been cash. The problems have been 2-3 year seasoning requests, some won't lend to properties under $75k (I'm right on that edge with alot of my houses). Started talking to someone at Colony now and they seem very good, however I have to package enough properties to hit $500k in one go which kind of worries me since $500k is alot of cash to just have sitting around, I don't know how fast I can utilize that money although it could certainly be quite fun

 I can learn something from any bit of input I get. If it's negative I have to at least consider what people are putting in from the experience they have. If they're simply being vindictive then it gives me hopefully some extra motivation to show that they're wrong.

Since November last year I've bought 21 more doors with another 3 in contract. If I kept that pace up this year (Who knows if I can or not?) That would be 50/yr and help me reach goal in 9 years.

Or I could do it for another 3-4 years and buy some big projects (I'm very much open to buying a trailer park) to get that number up.

Who knows, I do know at 51 units it's heck of alot easier to on-board 1 more than it was to do the first one.