All Forum Posts by: Shaun R.

@Jordan Napoli We are in South Louisiana

Originally posted by @TJ Hudson:

@Shaun R. did you go through a portfolio lender or big bank? Also I have been hearing that with an LLC you have to go commercial route- I know you said general partnership but assume that the bank treats it the same? Also what rate are you working with? One more question...how is the flood insurance?

I actually went through a broker that I heard talk to @Joe Fairless on the Best Ever RE Advice podcast.  She did a show on lending to investors.  I contacted her and she walked me through the whole process.  And she is actually closer to you than she is to me.  

I ended up getting 5.25% on the 30-yr mortgage with 20% down.

I closed on the home in my name, but my partner and I have a general partnership agreement that we signed.  There is probably a better way to do this.

This particular property does not require flood insurance.  

Message me if you want the mortgage broker's info.  I would definitely recommend them.

@Michael 

@Michael Swan Yes we rented it pretty quickly.  I started advertising before we were done with the work, and had a deposit while we were putting the finishing touches.  I actually had to stay until 1:00am the night before their lease started to finish up.  My wife and I were at the house almost 17 hours that last day.  

@Robin Boyer according to my calculations this house cashflows $405 per month after accounting for 5% repairs, 5% vacancies, 8% management and 5% capex.  And I'm in a pretty good market, so I assume that values are going to trend upwards.  

Originally posted by @Mike Nguyen:

I'm still waiting for my first one as well.  Awesome job! You are truly an inspiration and I hope you keep moving in the right direction.  

I'm also concerned about finding time away from wife and small kids to work on properties.  Its sort of the price you have to pay until you figure out a better plan I guess.  You wouldn't know what to do until you had to go through it yourself. Wish you the best of luck on your next one. 

 I understand where you're coming from as far as the family time goes.  For a solid month I was at the house whenever I wasn't at my job.  Luckily, this property is close to my personal residence.  My wife and two little girls spent a good amount of time at the house while I was there.  My wife was into it and helped with the work.  I even found some jobs for my 8 & 9 year olds to do to make a few dollars. I'm starting to teach them about money and investing now, and this project was filled with teachable moments.

@Steve Vaughn my partner is a guy I work with. He was also interested in real estate investing and had more money laying around than me. I closed on the house and after closing we filled out a form that gave him 50% ownership. We just used a general partnership. We should have used an LLC, but this all happened kind of quickly.

Our payment on this one is $750 per month. We are getting $1500 per month in rent. We are not taking any money out for ourselves for a while. Everything above the mortgage payment is going to stay in the bank account, and for now we have decided to keep a minimum of $5000 in that account for maintenance, capex, and vacancies.

I got a quote for all the work to be done. We ended up having them do the floors and fence only and we did everything else. We saved $5,000-$7,000 doing work ourselves. And you're right, I did learn a lot. I'm definitely not the most handy guy, so there were lots of YouTube videos and questions involved. The painting is what really got me. It took so long to paint all of the trim and doors.. way longer than I would have guessed.

I just completed my first deal after years and years of taking no action.  It's not a homerun, but it's my first and I'll take it. 

I bought a REO from the MLS with a partner. We were originally looking at cheaper condos. The deal was that he was going to put up the money and I was going to get the mortgage in my name and do all of the work. I ended up finding this house on the MLS and after watching the price drop $15k I convinced him we should go for it. At a purchase price of $130k it was more of a down payment that he was comfortable putting up for the first property. So, I decided that I liked it enough to put some money in the deal as well.

Some of the repairs we made:

Ripped out nasty carpet and installed new laminate

Ripped out sheet vinyl and installed new ceramic tile

New toilets and hardware in bathrooms

Installed new privacy fence where needed

Painted entire interior

Replaced all baseboards

Cleaned up flower beds and put pine straw in

Cut  down tree in back yard that was damaging the old fence

Had house and all concrete soft washed

Added CO monitors

Lots and lots of cleaning...  The house was disgusting

We got plenty of calls and on-line inquiries.  It took less than a week to find tenants.  They ended up coming from Trulia, which came from posting it on Zillow.

Here are the numbers:

Purchase Price:                 $129,000

Down Payment:                $25,800 (20%)

Prepaid/Closing Costs:    $5,215

Renovations:                     $10,845

Total:                                   $145,060

Monthly rent:                    $1,500

ARV: $158,500

Things I've learned on this one:

I probably could have gotten the bank down a little more on purchase price.  I wanted the deal so bad that I didn't want to chance haggling with them too much and losing it.  Next time I need to be willing to walk away.

I need to pay a little closer attention when inspecting the house prior to purchase.  I didn't plan on replacing baseboard, painting the ceiling, removing the tree, or removing the vinyl floors initially.

I absolutely DO NOT want to do work ourselves again.  For a month I was at that house every single day off from my regular job, and lots of evenings after work.  Next time I will plan on having contractors do all work.  

Now I'm ready to start learning to manage the rental and will be looking for the next house.  My partner and I are now leaning more toward a flip instead of a rental. We think maybe we should split the money made on a flip and do our own buy and hold investing, instead of committing to 30 years of payments together.

Here are some pics of the house when we bought it.

And after:

I signed up for the free 30 day trial of qbo last night and I saw the option to import your desktop file.