All Forum Posts by: Tara Kinney

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $77,100
Cash invested: $6,900

Single family home. Scope of work to upgrade unit, needed to drywall and paint the entry way, put on new molding, tore up old carpet in dining room and living room and put down vinyl hardwood flooring. Financing - financed the purchase price through a private lender at 2 points and 9%. Used a 0% credit card to finance the rehab. Leased out for $1350 per month. Plan to refinance to get both the purchase price and the rehab costs out. ARV should come in around $120K.

What made you interested in investing in this type of deal?

Rehab was almost completely done for me, great location, previous owner left the rest of the rehab supplies. Easy flip and rent.

How did you find this deal and how did you negotiate it?

Brought to me from a wholesaler. Negotiated for $80K if seller would pay closing costs, $77K if I would pay closing costs. Seller chose the $77K.

How did you finance this deal?

Used a private lender. Found by being friends in a different circle and got talking about real estate. Learned he is a real estate developer and he also does some private lending. Was going to do hard money lending, but when he mentioned that, I asked if he would be interested in this project. Sent him all the info, and he jumped on it.

How did you add value to the deal?

Had to refinish the entry way, put new drywall up, paint the stairs, tore up the old carpet and put down vinyl hardwood flooring.

What was the outcome?

Leased out for $1350.00 per month.

Lessons learned? Challenges?

Took the contractors WAY longer than expected. Was told a week or two and it took 1.5 months. In the future, I plan to get that in writing and check in on them more, rather than relying on my property manager.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Alex Bock - he has wholesaled me two deals. Both have been profitable. His numbers a pretty realistic and negotiated price is fair.

I am an investor in the QCA - but I only invest on the Iowa side (more landlord friendly and much cheaper property taxes).    If you have anything on the Iowa side, feel free to reach out to me.  Specifically looking for 4 plexes on up to 10 units or so (small multifamily).

Thank you Kenneth!  Great suggestions!

Tara

Thanks for your advice. How would do you suggest you use a private lender in a situation "OTHER" than a BRRRR? I am using a private lender currently for a BRRRRR, and that is working out great for THAT property.....however, not all my potential investments will necessarily be a BRRRR. I am looking to also aquire cashflowing assets from the get-go and just buy and hold.

I was thinking about having him be a private lender that simply provides the downpayment for a property and just pay him 8% annually (monthly or quarterly distributions) and but wondering how I would structure it if he wanted his principle out, ie: 5 year commitment minimum, 6 months notice?  Ect?  

Thoughts?

So I'm blessed to work in a profession where I am in constant contact with higher earning people. I recently had a discussion with a collegue that is unhappy with his return in the markets (shocker...) and he knows that I have started investing my money into buy and hold real estate. He approached me and said he would be interested in investing money with me and be happy with an 8% guaranteed return. Now I personally won't purchase a property unless it provides me with a minimum of 12% COC return so this could potentially have a scenerio here where I could capitalize on a project without any of my own money out of pocket here and receive basically a free 4% (or higher) return without any of my own money down. Or...I could put my own money into some higher dollar projects as well. My goal this year is to purchase atleast 2 4-plexes or higher in 2019.

My question is, if you were given this option....how would you choose to structure a deal?  Partnership or private lender?  What is your reason?  How long would you structure a deal for?  I've personally not done a partnership type situation though I have done a private lender.  Just looking for some ideas/strategies that could benefit us both. 

And GO... :)

@Jay Thomas

Welcome Jesse!  I look forward to meeting you at the next meeting!  In the mean time, if you have any specific questions on the area.... feel free to reach out!  I live in Bettendorf, IA and have a few properties in Davenport.  I regularly try to attend the meetings, the networking is invaluable....plus a ton of information or other insights you learn that you may not think about on your own. :)

So I have a dilemma.  I found a 4-plex that looks like a good investment.  $150K asking price, $2600 monthly income...cashflow analysis indicates around $700 cashflow.   4-plex's don't come up for sale often here so would like to pounce on it but here is my dilemma...not sure where to get funding from.

In the past 4 months I have purchased 2 duplexes and a single family home, depleting my available cash reserves for down-payments.  Current lender requires 25% downpayment so I would need around $40K.

Currently have $107K in a HELOC of which I have $40K available, but then I would be maxed out. My last property I purchased out of my HELOC for $72K. I cannot refinance it into a 30 year mortgage until November as that will be the mark of "2 years" of self-employment which they require for traditional 30 year fixed mortgages. I don't want to use my HELOC as that will increase my debt to income ratio and probably disqualify me for any mortgage anyway.

Does anyone have any recommendations for lenders that require less than 25% downpayment for an investment property?

Or what are your suggested strategies for finding funding?  

Thanks in advance!

In Moab Utah this week so I’ll be missing the meeting.  Thanks for the contact info, does he do all types of construction work or just basements?  Thanks!

I've been to one a few years back.   

Go to the free seminar, you do learn a lot of info....USE THE OPPORTUNITY TO NETWORK!  Find other people in the group that are ALREADY in real estate.  

DO NOT pay for their coaching!  I DID NOT buy their coaching, but I did spend a RIDICULOUS amount of money for coaching from RICH DAD POOR DAD and from PROVISION (Tom Wheelwrights company..... Robert Kiosaki's CPA...wrote the book Tax Free Wealth which I highly recommend).  Like I said, I spent an enormous amount of money for their private coaching and am KICKING myself.  If you are self motivated to learn, there is NOTHING they will teach you that you can't/won't already learn by listening to webinars, reading books, reading these forums and listening to podcasts.  DO NOT WASTE YOUR MONEY....Speaking from experience!!