All Forum Posts by: Travis Steinemann

@Lydia Woods you can get 5-10k houses in Baton Rouge too in 70805 and 70802. It isn't my ideal property, but they aren't too hard to find.

@Jordan Greek I almost always do 20-50k rehab in my rentals since I'm trying to maximize appraised value and BRRRR them, but I get my appliances at all of the big sales for the big box stores. Labor day, 4th of July, and Memorial day tend to have very solid discounts.

And I second everyone who says do what your competition is doing.

@Mel Park a lot of the tasks can be automated or handled with inexpensive software. I personally use rentredi which is advertised on here a lot, which collects rent, can handle maintenance requests (although you still need a relationship with a handyman), do credit checks and advertises ( although I still put it on Zillow, apartments.com and Facebook manually). I also hire a real estate photographer but that is mainly because we do renovations and want great before and after pictures for our portfolio, but it makes our listings stand out too.

There are a lot of pm softwares out there, and if you have more than one or two units, I would probably consider one of them. Appfolio is another option and I've used that one too.

You don't need to reinvent the wheel, but it isn't that hard. Just make sure you document EVERYTHING and if rent is late, do exactly what the legal process is in your area with notice. Also do exactly what your lease says with late fees and treat everyone the same.

Best of luck, I self manage a few properties right now but will probably either hire in house pm if I get big enough or turn it over to a company if it starts taking too much of my time.

@Kevin Scott that is a valid point regarding taxes. I just assume he can get capital from other sources so having an extra 60k of his money to put towards deals wouldn't make a huge difference in the quest towards building a buy and hold portfolio.

If it cash flows and he can get all his initial money out, I would take the infinite return.

@Casey Mayton I do BRRRR using other people's money so I have infinite returns with RE. I was able to take my net worth from 70k (all invested in ETFs and mutual funds) to $275k in 12 months. $35k in stock gains, $170k in RE equity, plus cash flow.

I have not found a way to buy stocks for 0 down or with a bank's money yet, at least, not with my risk tolerance. For people just starting, education and lead gen can give you an unfair advantage in RE where you can create wealth quickly. And it snowballs.

For a mature investor with a bunch of cash, stocks may be a better choice. But for me, just starting my investing journey, I can only hit my goals of retiring at 40 thorough RE.

Hello BP! 

Would love some input on this deal. On the surface it looks great. I have higher Capex than I usually would because the roof is from 2008, the HVAC is 2009, water heater is 2011, and we aren't replacing the windows in the rehab and they are from 1982.

The report is a little misleading, since our loan on the purchase is a 90% of purchase and rehab bridge loan, so cash needed for close is actually 0 and we usually just end up paying a little of the rehab at the end. 

View report

*This link comes directly from our calculators, based on information input by the member who posted.

@Stewart Campbell I agree with @Jason Shackleton especially regarding the taxes. Anytime you can get a cash flowing property with an unlimited return, I take it. There will be more flips, and more taxes. You'll never get off the hamster wheel if you don't buy and hold. 

Also, consider using other people's money if you are not already doing so. It sounds like you have a good track record and are able to find good deals, so you should be able to get short term funding. 

Hello Ray,

Throughout COVID we've made our leases mostly month to month, depending on the applicant's credit history and references. Moving is a pain in the butt, so most people want to stay and will stay. We've had one of our 5 units leave, but the rent came later and later every month so we weren't going to renew anyway. 

I've heard a lot of other property managers and investors using this strategy.

@Roberto Vasquez if you want a rental, make sure you run your numbers at 70% of ARV minus repair costs minus financing costs. Then you should be able to buy with hard money, repair it, then get all the money back out to pay back the lender. Keep some money in reserves because they often (usually) require monthly interest payments.

@Grant Hilliard hi Grant! Welcome to the community, and that's awesome that you're starting so early.

My first investment was a fourplex in BR as well, except I did not live in a unit. I bought it with private money then did a cashout refinance into a 30 year fixed commercial loan. Commercial loans are the move if you don't have W2 income, the downside is they will have higher interest rates and require more down, but if you do value add you can be ok still. There are other ways too, like seller financing, or one of the many lenders in the mp marketplace, or finding a partner who has w-2 income. All of which, I have used.

I have a few properties now and they are in an LLC, this rental income cannot be counted as income for conventional loans for 2 years as well from what I understand. I would have to double check with my accountant though. FHA loans do consider a portion of the multifamily rents as income though, so that could be an option.

A $300-400k multi in BR probably wouldn't cash flow great based on the deals I've analyzed. But that is a very broad generalization. Make sure you check the flood plain map because flood insurance can be 2k+/year.

Don't worry about exchanging your fourplex at this point. That assumes you will have gains on it or appreciation, which aren't super likely if you buy at market price. That's something to think about in 5-10 years.