All Forum Posts by: Taylor Umphlett

I buy properties in cash through my LLC then finance the property in the same LLC to pull my money out. I have to hold the property a min of six months. I usually hold for a year. I have only had one issue with a bank not wanting to do this and it was because they had already given out all the money they had allotted for those types of properties. I just went to a different bank who had no problem doing the loan. I have been working with both banks for about seven years to build a relationship. I buy properties in my LLC for liability reasons. A few investors I know put five to ten houses in one LLC and then create another for another goup of properties. Also, no matter which company I buy something through the bank has always looked to me and or partners personally to gurantee it.

There is some equity in the houses that I currently own.
I usually pay cash and then refinance later, that is my favorite method.   I refianced/financed four houses last year but didnt get all that I could, that was my choice.  I got enough to pay myself back, and they still cashflow enough to keep me happy.

I want to get peoples opinion on this.  

What do you do when you run out of money?  If you have saved enough money to put 20% down on five houses but this depletes your investing account, what do you do?

Should you wait and save up money or use a loc to buy then refinance in a year? Or, are there other options?  The point of this question is what are real world solutions to this to decrease time between purchasing? 

If Im trying to get a quick number I look at per square foot price.  I will get an average per square foot price for similar properties in the same area and apply that to the property that I am looking at.  I pay attention to why some are more than other, they will usually have just been updated.  I also do my calculations on the conservative side.  I have used this with flips and rentals and it has always been very close to the after rehab appraisal.    

I dont think you are missing anything. I havent seen a property listed on Realtor or Zillow that will cash flow in the last two years.  With prices being high right now I cant see many properties appreciating that much more in price.  Im sure in some areas they will, I dont believe I live in those areas.  

I drive around and find houses that are grown up or need some work, then I find the owner and go to their house to talk to them, no phone calls and no letters in the mail, they have to turn me down face to face.  I throw away flyers and will hang up on people real quick, much harder to do when they are looking straight at you.  It works best if you find someone who owns more than one property.  I just purchased prop stream to help find people who own several houses, Im still trying to figure out all that it offers.  I also talk to everyone I know and let them know I am always looking.  I will aslo call a realtor to look at a house knowing I will not buy it just to meet them and let them know I am a serious buyer and what I am looking for.  They usually have some off market deals or pocket listings.  I have only ever bought one house that I found on Realtor and it was four years ago.  I have also only bought one house that didnt need much work.  I hope this helps in some way.  

@Joshua Janus I would say it would be around $60,000 in the current market.  I plan to put a central HVAC system in it.  The tenant is an older lady in her 80's.  She is the best tenant I have, looks after the property like she owns it.  When she is no longer there I will raise the rent to around $600 a month.  The only thing holding this property back is the location.  The neighborhood is not the best, it is changing for the better though.

Investment Info:

Mobile home fix & flip investment.

Purchase price: $25,000
Cash invested: $30,000
Sale price: $71,000

Double wide in a good neighborhood. New paint, flooring, roof, fenced in back yard, HVAC repairs. This was our first flip, under contract before we finished. We sold below market value.

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

We had wanted to flip a house for a while when we found it. Seemed like we could make some money quickly.

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

We found this on realtor at the time.

How did you finance this deal?

We borrowed the down payment from my business partners parents and financed it through a local bank.

How did you add value to the deal?

We rehabed the property with a new roof and cosmetic stuff on the interior. Closed the deal by adding a fenced in back yard.

What was the outcome?

We sold the property and got what we were asking.

Lessons learned? Challenges?

At the time we had a huge construction project going two hours from home. We spent all out spare time doing all the work to this property ourselves. We should have hired sub contractors to do the work to save time. We sold below market by $20,000 to sell it fast. We should have listed about $5,000 below market.

When I bought my first property I used people that dealt with rentals in the area to guide me on what I should be paying and what the rents would be.  I walked the property and put a price on everything that would need to be repaired or updated.  I talked to several lenders to see how they evaluate properties and what ratios they use for loans.  I put all that into a spreadsheet to see exactly where I would be with my return.  I go by what I can live with when it comes to cash flow.  Some investors I know are very happy with 7% to 10%, some require much higher.  I was more concered with cash flow and cash on cash return, and needed higher numbers for that.  I also am cautious on who I get advice from or how much I listen to certain people.  Some people look really good on paper and some are actually making money at this.

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $32,000
Cash invested: $33,000

Brick 3 bed 2 bath. Bought as a 2/1. I installed new HVAC, flooring, light fixtures. The laundry room was falling down from termites. No home inspection, bought with a handshake. Converted the dining room to a bedroom. Updated the bathroom and kitchen, all new plumbing. This house was the largest project I had done to a rental so far.

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

This house is a small brick house that was priced cheap for the market.

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

I was riding around looking for vacant or run down property. Loooked up the owner who lives in the same neighborhood and me. Went to his house and talked to him. Met at the property and bought it with a handshake, no cantract. A week later I closed on the property.

How did you finance this deal?

I bought this house all cash. I refinanced all four houses the next year and pulled all the cash I had spent on all of them back out. I just wanted what I had spent back out, I still have a ton of equity in the properties.

How did you add value to the deal?

I completely redid the laundry room and renovated the entire house. The biggest contributor for any house, in my opinion, is adding central HVAC.

What was the outcome?

I rented the house for $200 more a month than what my advisor said that I could. The previous owner was getting $450, I get $700. I am still under the market rent by $100-$150.

Lessons learned? Challenges?

I learned that I should hire out the work. It will cost more but it will take significantly less time that if I do it myself.

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $32,500
Cash invested: $32,500

Two bed one bath shotgun house. Previous owner had installed a new roof and new siding. Tenant has been in the house for 50 years.

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

Price was the biggest motivator on this one.

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

I found this looking through Realtor on the internet

How did you finance this deal?

I purchased this house all cash. I refinanced a year and got all my money back.

How did you add value to the deal?

I looked at the recent repairs/updates and the asking price.