All Forum Posts by: Grey Stone

Originally posted by @Kenneth Hynes:

Doing a live in BRRR of a two unit and ripping up the old green shag carpet . Inspecting the wood floors beneath - Do you think these can be saved , or just replace

with LVP flooring ?  The house will turn into a  Calss B rental  in hte next year 

 I just did a project with floors just like this. It is a 50s home that had large stains. I was worried they wouldn't come out, but with sanding they came out beautifully. Definitely refinish. It cost me approx $400 for the entire house. Sand, clean, seal and polish. Almost everyone commented on the beautiful floors. 

Every house on the market will NOT be a good investment. Finding an off market deal should increase equity and cash flow. Having the seller pay closing costs will improve your CoC even if you increase the asking price. Finding ways to increase rents will also help. In my area Section 8 has worked well, by getting higher rents and less turnover. I would recommend house hacking first or buying a house then move a year later turning it into a rental and that will usually give a much better CoC return through lower down payment and closing costs. Focusing on cash flow is great, but focusing on building equity is a much faster road to wealth. For example, if you have two options which would you pick?

Option A: Home bought at FMV that cash flows $500/mo

Option B: Home bought with $100k equity that cash flows $100/mo

Cash flow is important to me, but I will pick option 2 ALL DAY LONG. The equity allows me to sleep better at night and in my area it ends up increasing cash flow and CoC return. I'm focused on building my net worth, not just cash flow.

Leverage is an amazing aspect of real estate, ESPECIALLY when interest rates are this low. When you find a great deal and then couple it with low interest rates, it will allow you to grow faster and increase your return on capital. Some feel buying it with cash is safe, I don't. When you buy in cash you can only buy so many. I've learned the more you do RE the better you get and typically the better returns you get. Buying in cash is something I would consider for retirement, if I needed a place to park money or more realistically if I am trying to be more competitive to get a property and will then refi at my first opportunity. Good luck!

Call another lender that understands VA loans. I currently have two VA loans and the houses are also in the same city....very close to one another.

Most of us have done it, lol. Don't feel bad. Don't make offers if you feel uncomfortable, just be aware some agents get burnt out pretty quickly. Good luck!

1. For me, location is the most important. I would keep your desired location the same. When starting it is best to focus on one location and learn everything you can about it. Your knowledge will make you more confident and able to move quicker and smarter when making offers. But understand that lower income areas tend to cash flow more, higher income areas tend to appreciate more (most of the time). Make sure your expectations of CoC are realistic and find a way to meet them.

2. Most common ways to get in: you can pay more for a property, be creative by going direct to seller, network for deals, find another agent, work with listing agent, become an agent or wait. What fits your criteria best?

3. The fact that you look at so many properties makes me question if you know what you want to buy or if you are truly ready to buy. I may be wrong or just have a different personality. I can look at a property listing, map and pictures to know if I want to make an offer. Pictures can be deceiving, but I know my market and know which properties tend to work best for me. At this point I only go to properties that are priced relatively close to what works best for me. My market is HOT, so if I want to offer 30% below list and fmv, it's probably not going to work out. However, when I see listings undermarketed and underpriced, I move quick. If you like looking at a lot of houses working with the listing agent can be good if you are experienced. But please do not use that agent's MLS access to work with the listing agent directly...unless you want to torch that bridge.

Try different things, figure out what works best for you. And do not feel bad about the situation with the agent. It could have been worse. This business is all about relationships and the fact you're on good terms, they may come back around. And if they don't, keep moving forward. 

I am constantly looking on redfin and when I see properties that are flips or fixer uppers, I ALWAYS look to see the agent that bought and/or sold the home. In my area it's approximately 7 agents that are constantly listed. I'm sure your area will be similar. Call them up and schedule a meeting. Ask them as many questions as you like because this is a relationship business. Be professional and let them know you are looking for someone experienced in X, Y, Z and ask about specific properties that they have helped investors buy. It is very important they work with investors because you are leveraging their experience and contacts. If you have an experienced agent they will alleviate a lot of stress and will help guide you. A good agent will add value, not just collect a commission. 

I listen to a podcast, youtube video or audio book about real estate, stock market, business development, etc. for atleast 2 hours everyday. I am at a point where I want to grow. I find it helps to keep me focused and learn from other people's experiences. My parents taught me about traditional investing and I am thankful for that, but WOW there are so many ways to skin a snake! 

You can absolutely make an estimate by looking at pictures online. Listing sites are kinda like online dating...some people let it all hang out (flaws and all), while most put forth the best image possible. If you are not familiar with the area or potential problems homes may have, use a buyer's agent that works with investors AND understands the location and type of property investing you are doing. I make rough estimates on expected repairs all the time. When I get to the property I take a lot of photos and video. This can be used to show your contractor. You can have your agent ask the listing agent to disclose any problems, but oftentimes people lie. I have been under contract with multiple properties (while working with the listing agent) and asked if there were any problems with the house. They told me no and later disclosed previous home inspections from prior buyers (that cancelled) with significant damage to the property. I don't say this to scare you. In actuality buyers are pretty well protected, but you must do your due diligence. It's customary in California to have 17 days to inspect the home and also receive the Natural Hazard Disclosure. You can and should do a home inspection, roof inspection, etc. When you are making your offer it is based on the original information received. If you later find out that it needs a new roof, you can cancel the deal....or better renegotiate with the seller. If you are uneasy I strongly encourage you to use a buyer's agent because using the listing agent can be used against you if you are not sure what to look for and need guidance throughout the process.

Paint it! Paint is very inexpensive and can provide a dramatic refresh. Bright colors should work well, but I would choose different colors....except the blue. I really like the blue. Look at pictures of the most popular hotel rooms and airbnb's in your area. Look to see if there's a theme or if you can find a way to stand out. I really like the idea of Agreeable Gray with accent walls or decorative pops of color. All of my traditional rentals are painted Agreeable Gray, but for airbnb and by being on the coast I think adding coastal colors would be nice. Good luck!