All Forum Posts by: Scott Rivers

@Zachary Rymarcsuk 

I have a SFR in an A neighborhood (Vestavia); it's appreciated a fair amount ~60k over the past 10 years with ~$300 cashflow. It was my first primary residence but I rented it out when I moved out of state and never looked back. I also just closed on a duplex there in a C neighborhood (East Lake) last December for cash-flow @~$500. I'm from Birmingham so I will take risks there others will not and I plan to get rich slowly. The suburbs of Birmingham are better for appreciation and some cashflow; the city proper appears to be the exact opposite and properties are very inexpensive. You can find good deals in any market, you just have to do your due diligence.

 Awesome job! I'm hoping to get started there as well. I have 3 tenants in Birmingham, AL but I want to expand to Fayetteville as well. Who do you use for your PM? I'm gonna need one and it sounds like yours has done a good job.

@Kyle Neville I take it that you have enough for the down payment but not enough to do the conversion to a duplex. If it is as you say though, even with a HELOC you usually have to have the funds in an account for 60 days of seasoning for the banks to give the green light. @Jason Wray is definitely on to something. Everyone's paying a premium now because buyers are greedy. Remember Warren Buffet's quote: "When people are greedy be fearful. When people are fearful, be greedy". I think the next 18 months will present some amazing deals for all of us, we just need patience.

Welcome and hello everyone.

I'm sorta new to BP and purposeful REI. I'm deployed but in the process of buying a duplex. I also have 1 LTR in AL and I'm also looking to get an SDIRA up and running. Section 8 is money! That's guaranteed money coming in each month from the government; you can't beat that. If you have a section 8 tenant that's employed, they probably have to pay 10% of the rent. Cool thing is, if they're fired or COVID strikes again, no worries because the government will pick up all the slack. I've had Section 8 tenants in my Alabama property since ~2016 and they have never missed a payment; not that they can lol. Section 8 programs helps families in all kinds of neighborhoods (mine is A to A+) so don't let the stigma stop you from getting steady, reliable cash flow. I provide a great home, they take good care of my house, and Uncle Sam builds up my equity. I can't complain at all.

I personally think the HELOC is the way to go. You have equity built up (100%) and this would be a way to use that equity not once (think Home equity loan or selling) but multiple times and maintain ownership of the property. If you keep the property as a rental or use the HELOC to acquire more properties while using rents from those units to pay off the HELOC during the draw period (say 10 years) you should come out ahead of the game. That's just my opinion though. I will never sell my properties unless I'm forced to. Depending on the market, you can buy cash flowing properties, paydown the HELOC, repeat and accelerate acquisitions over the years until the repayment period starts with the HELOC. That's my plan.

I know lots of big banks are pulling back from issuing HELOCs. Some banks don't like to give HELOCs on investment properties but try asking some local banks and/or credit unions. If you ask enough institutions, you will find one that can help you. I'd love to hear an update when you make it happen. I'm trying to do the same thing but I have to refi some properties 1st.

Spencer, sounds like an awesome strategy. Definitely check to make sure it's not a set number of mortgages, say 5 or 6, where traditional lenders grow weary. I have a townhouse I turned into a LTR and now I have a primary I'll turn into a STR and I'm preparing to close on an out-of-state duplex for cashflow. I think looking into MFH (duplex, tri's and quad's) could be a solution if conventional lenders start pulling back based on mortgages but I havent heard anything about 10 doors. You follow BP so you know how awesome duplexes are. Now I'm curious as well.

I would definitely play around with the calculators unless this deal meets your parameters. The CoC seems low but I'm still new to all of this myself. To Dakota's point, your CoC return would be much higher if you used leverage (20-25% down); you'd decrease your monthly cashflow but you have a healthy gap there to work with. That and rent to purchase is just under 1%. @Jacob Trimble I can see this definitely as a buy and hold and it will move you forward; it doesn't have to be perfect. I'm here in Honolulu and I'm curious to see how this turns out.

Awesome job, Julie! Glad to hear it's working out. I'm in the process of buying a duplex in Birmingham. Is the wholesaler boots-on-ground?

I feel you on the refi piece. I'm refinancing my primary and my investment property in Alabama. I'm still in the market for another property though. One of my goals is to get at least one this year. Hopefully I find the right one. If not, I'll at least have some funds for a JV.