All Forum Posts by: Omid A.

@Rey Orinion Rent is a fixed amount on a 3-year lease 

@Rey Orinion In my case I made the improvements to made it ada accessible and meet the requirements for an operator to get the property licensed. 

So in my state there is a difference between assisted living facility and an adult foster home. Assisted living is WAY more regulated with a ton of zoning codes that must be met, it usually will only make sense to do an assisted living if you are building ground up. Adult foster home on the other hand is less strict but also demands less money from the residents, adult foster is great if you are converting an existing home. 

Also, it's not very management-intensive at all, assuming you are leasing the property to an operator. If you lease to an operator, you'll still get a fair bit of a premium above market-rate rents and usually on a longer-term lease (3-5 years). I just went through this recently with one of my projects and it worked out great.  

I'm not about being super frugal in life and penny pinching your way to wealth by any means, I believe you should enjoy yourself through the whole journey while still being responsible. However, I don't think you should quite yet. In my opinion, you are in a position to build a sizable amount of wealth over a relatively short period of time. Stay the course and keep saving until you have at least a couple hundred thousand more dollars then make the purchase and you won't really have to think twice about it. Committing 45% of your entire capital base on credit I think would be foolish. Beautiful car though :) I Can see why you're tempted. 

If you don't currently have a nest egg to invest with, I'd say selling is a pretty good idea. A good way to look at it is the return that your equity is generating for you. $360 per month equals $4320 per year, you have $80k equity sitting there to make you $4320 per year, that's a 5.4% return on your equity. If you can deploy the 80k to get a higher return then I would say sell it. Personally, I'd use the funds and look for a deal I can use the BRRRR strategy on and rinse and repeat as you come across solid deals.

On the other hand, you have an asset in a great location with upside potential with respect to appreciation long-term (rental appreciation and property value appreciation). I definitely wouldn't sell it if the alternative was to deploy the money out of state in a location that doesn't have upside appreciation potential. 

All banks that I know of will require you to have 2 years of tax returns before they will give you loans. 

@Jim Goebel Thanks, Jim. In your case the Cash-on-cash return would technically be infinite. It seems silly to measure when all your capital is pulled out but that's not always the case and it's a good metric to consider when you have sunk costs in a deal that you can't pull back out. 

@Obadiah Roszman Someone else caught that in the comments as well and I addressed it, I got the 2 numbers mixed up; They are supposed to be vice versa, nice catch. My bank made me wait 6-months before doing an appraisal based on value of the property. I'd reach out to more banks until you find someone with a 6-month seasoning requirement, 1-year is too long. 

@Arianne L. @Chris Lemire Congrats on your success, the speed at which you scaled up is very impressive. It's hard to maintain that much deal flow in this hot market with inventory as low as it is. Can you please share more about your marketing strategy? I understand direct mail is the bread and butter lead source but what's the overall strategy with your direct mail? What type of lists are you targetting? 

@Matthew McNeil The property has an alley street in the back, the front unit is facing the main street and the back unit is facing the alley street, there is a fence in the middle of the two to create separation. 

@Gary Rust

I used private lenders to fund the purchase price and my own cash to fund the rest. Also, you don't pay any taxes on cash that you pull out on a refi because technically it is a loan and not income ;)