All Forum Posts by: Stephanie Bureau

Welcome! I have some friends from Kentucky! I went to IU, so it was close to the boarder. I'm in the same boat. Not a lot of capital, so I'm looking into a lot of no and low money down deals

I never had a parent sign (just graduated) except for my first apartment, but my dad just paid in full for it instead. The rest of the places I gave them my w-2, financial aid letters and grants and loans to cover the 3x rent. By that time I did have a credit score. If you are concerned have a parent co-sign. Check references and see if you can talk to a employer (not sure about the laws concerning that). Also give them a list of what the move-out cleaning and repairs will cost, so they'll think twice about damaging property. Also talk with them about noise complaints and talk to the neighbors and give them your card to have them call you first.

I haven't yet, but I've seen some good properties on there. I've heard a lot of cities are using them for their foreclosures 

Sylvia B. It will show them exactly what I'm looking for in a property so we don't waste each other's time. It was also allow him what direction I'm heading so he can introduce me to other people who will be able to help me. And thanks I'll change that!

Michael McCartney we actually manage a small farm in exchange for rent, utilities, and free boarding for my horse (which I'm trying to sell to decrease expenses and to put that money into saving for this business). We also have 5 dogs so living in the city isn't really feasible. 

Roland Thomas my main reason for staying away from wholesaling is because I have two jobs and another small business already, so I didn't really want another job. Granted I know landlording is a job, but it continues to pay you even when you're putting in less hours down the road.

Will Koederitz I didn't think of that, so I will definitely add that.

Frank R. I just restructured my finances so I should have an extra $500-$600/month coming in plus getting a higher paying job should bump it up to $1,000 extra a month. 

I see the business plan as I know exactly what I want. If it fits the critera then I can start the process with it.

The reason I'm thinking of switching jobs is because it's hard to save enough with 9.50/hr. The only thing holding me back is just having enough money for the down payment and closing costs. I'm thinking of either getting a business loan or seeing if my dad will loan me money (he does REI in Indiana). I'm going to try to find a REI group here in San Antonio soon as well to start meeting people.

I'm planning on doing that this year. Right now I'm trying to determine finances as I'm thinking of switching to a higher paying job and coming up with a down payment

So I just made up my business plan to show to a real estate agent who I'm meeting with soon to get some ideas. Does it look good? I know it's not completely filled out and some things will change as we get further along (there's also a map of the area we want to work in, but it didn't paste). Anything I left out?

Mission Statement

We strive to provide rental properties in the San Antonio area that are clean, safe, and that creates a sense of community in the neighborhood.

Goals

Short Term (2-5 yrs)

Buy first rental property in 2016.

Second year add 3 more rental properties for a total of 4 rental units.

At least $4000/month of passive income by end of year 5.

Continue personal education

Seek additional mentors

Long Term (5+ yrs)

One partner obtain real estate license to aid in acquisitions.

Move into multifamily and apartment complexes for more cash flow.

At least $6000/month in cash flow for both partners to retire from regular work.

Move into flipping a few properties while maintaining concertation on buy and hold

Acquire enough buy and hold to comfortably supplement retirement.

Team Members

Partner: Stephanie - Office and paperwork, working with tenants, securing financing, finding and analyzing deals

Partner: Seth - Repair and rehab, working with tenants, securing financing, finding and analyzing deals

Mentor: *name and phone number omitted*

Mortgage Broker/Loan Officer: N/A

Real Estate Agent: N/A

Real Estate Attorney: N/A

General Attorney: *name and phone number omitted*

Escrow Officer or Title Rep: N/A

Accountant: N/A

Insurance Agent: *name and phone number omitted*

Contractor: *name and phone number omitted*

Landscaper: *name and phone number omitted*

Market

The main types of properties will be 2-4 bedroom single family residences in moderate to mid high-income areas in San Antonio, north of I-410, east of Bandera Rd and west of I-35 primarily but to include the Alamo Heights, Terrel Hills and Fort Sam Houston Areas to the North and to the West of I-35 but East of US 281. Our renters will primarily be professionals, single or small families. Dogs and cats with breed restrictions will allow for higher than average rent.

Zone 1 includes I-10 to 281, north of 1604. Zone 2 includes 281 to I-35 north of 1604. Zone 3 is between I-10 to 281 south of 1604 and north of 410. Zone 4 between the boundaries of 281, I-35, 1604 and 410. Zone 5 is east of Bandera Rd to I-10 and north of 410. Zone 6 is south of 410, between 281 and I-35.

Criteria

Criteria is generally listed from most important to less important/more flexible

Cash flow at least $100/month per door

Neighborhood: clean, low crime, good school district

Max purchase price: $100,000

Loan to Value:

Cap Rate (NOI/Property Asset Value): 10%

Max Rehab amount: $20,000

Max timeframe: 3 months

Property Size:

Lot Size:

Property Condition: basic repair

Bedrooms: 2-4 (unless area warrants 1 bedroom)

Number of Units: 1

C.L.U.E. Report of property

Screening process

Monthly income is at least 3x rent

Civil and criminal background check

Resident Research

Credit check

Check cleanliness of car

Submit questionnaire

Acquisition

Properties will be bought by, but not limited to private sales, listings on the MLS and foreclosures

Cash Flow Assessment

To Be Determined By Property

Initial Cost:

Loan:

Rent:

Mortgage:

Repairs:

Management:

Taxes:

CapEx repairs:

Vacancy:

Include your assessment of what could go wrong and how you would plan to handle problems?

Exit Strategies

If the property isn’t producing cash flow or is incurring too many expenses, the following exit strategies will be implemented.

Sell property either by using a realtor, doing a private sale though Facebook, wholesaler and/or network

Lease option

Seller financing (if property is owned outright with at least 20% down with preference for 30% down)

Upon a sale a 1031 exchange will be attempted to defer taxes

Financing

HomePath mortgages if purchasing bank repo owned by Frannie Mae, conventional mortgage, owner financing if home is owned outright, hard money, private money and bringing on an equity partner or joint venture partner who will help finance the deal. In the future HELOC may be an option when current properties build equity. In the beginning cash flow from properties will be saved to help fund additional deal.

3-6 months rent will be held in reserve fund per property

Marketing Plan

Buying:
Use agent to search MLS, search foreclosures, create ads for website

Renting:
Post on Craigslist, Facebook pages, create website, put signs in front yard

Management Plan

Leasing, Inspections, Maintenance and Repairs, Capital Improvements

Full exterior/interior inspections will be conducted semi-annually and per the Management SOP.

Tracking Performance

Analyze cash-flow of property annually and determine be course of action.

So I was on Zillow and Trilla looking at some properties for rentals and I saw some of their suggested things to add value. What stuck out to me was the cost was a lot more than the added value. Is this normally the case or were those just repairs/additions that don't have a good ROI? Granted most of the properties that I was looking at didn't need a large overhaul and are fairly turn key with minor repairs.

Aaron, I thought it was all expenses minus mortgage. Is taxes part of the mortgage or expenses?

So I know with the 50% rule you should account for half of your rent to go towards maintenance and repair expenses. Since not all expenses are going to happen every month like capex (is that how you write it or is it CapEx or something?), I'm guessing it goes into a fund of sorts. At what point do you consider the fund full and apply the extra towards investing into another property or as profit? Obviously you won't have a maintenance fund of 100k for one house (I would get a new property before I put that much repair work into a rental), so what is a good number to aim for before you start diverting the funds elsewhere?