All Forum Posts by: Vincent Plant

Thanks for responding Nick. 

I explained to the lender that I didn't want to borrow funds for the rehab just to buy. He said that typically in flip deals its around 30-40% down but if construction was included it would be about 30%. 

I just don't understand I guess. When you say "you might be able to get 10-15% down from your own cash + the HML for the rest" - What do you mean by this? 

Does Hard Money typically cost 30-40% of the purchase price?? 

I am considering buy a home to flip. I have done a handful of flips using cash, partnering with friends, and making it work. 

I am eyeing up a property I want to buy that costs much more than usual so my plan was to use a hard money loan to purchase, and rehab it with my own money, then sell. 

I talked to a hard money guy and I was shocked at the numbers. 

$325k purchase price.

$220k loan amount. 

$120k out of pocket money down to obtain the funds.

Huuuh??? What's the purpose of trying to get a loan when I have to pay that much out of pocket just to get it? 

@Chris Seveney

Thanks for the response. Yes it’s MTM.

So, walk me through that real quick then. Just let them know I am not renewing, they will plead with me to stay, they will not leave since they have nowhere to go. Then I will have to file another complaint and evict them correct?

**The house is far from me.

In my eyes putting up with the hassle and getting paid in the long run is better than having to flip the property over to a new tenant.

Should I keep putting up with them or get them out? And if I should get them out, what’s the exit plan? Just give notice that the lease is terminated?

I bought this property about a year ago. My first tenant has been in for a year and things have been bumpy since the beginning.

They have been late just about every month. When they are late, I follow strict protocol, I issue a late notice immediately, then after 5 days a 10 day pay or quit. Then I file a landlord complaint for possession.

9/10 they pay late, but they pay the rent along with the late fee by the middle/end of the month and then the cycle continues.

Once they got backed up, we went to court, I was awarded possession and was just about to file the forceable eviction and they paid everything and caught up… only to be about 3 weeks late again for the next month.

It’s not goin to stop. I know they won’t pay on time. But I also know they will typically always pay. In fact even with all the hassle, this has been my most profitable property because the cash flow is the highest and with all the late fees added in I actually had a decent year.

I know I’m breaking the fundamental rules here of property management, but should I stop putting up with this? Is it worth taking the time and money to get them out,

spending the money to prep the house for a new tenant screening a new tenant

@Christina Bailey

I sold them!

I listed them and got them under contract for $2k above asking immediately, all no cash, no contingencies.

I did a 1031 exchange and was able to find a much much nicer single family townhome in a different area that I rolled the funds into.

I sold them both for $115k each, clearing about $100k to use in my exchange. I just put it all toward the new purchase which was $175k. So I decreased my debt by about $40k.

Only downside is all the money is tied up in that one house, my interest rate is much higher, and of course the tenant I put in there is not turning out so great.

I’m happy I did it though, those houses were a ticking time bomb that I did not want to deal with.

I have been investing now since 2018. Things have gone well! I’ve got a handful of rentals that cash flow, I have 2 active bnbs that produce, I’ve brrrr’d, I’ve flipped. I am sitting on more capital than I ever had.

I just feel like the market has changed so much now that I can’t make the same moves. In my market I used to be able to find properties under $150k, and get an interest rate under 5% and the #s worked beautifully. Not now.

I can’t find any deals that make sense, and when I get something that looks decent it’s swept up immediately. I’m always looking for the big 3, buy and hold as a rental, buy and sell, or buy and hold as a bnb.

Anyone doing things in this new market that have been working?

I’ve had some tenants in my property for about 5 years. They have been good tenants. Polite, honest, never complain, pay on time (usually), and I like them.

It’s a lower income house and through the years they have hit some rough patches and been late here and there. Once they had to get an assistance program to help them through a few months, but they always had gotten back on track and stayed honest with me.

They didn’t pay for November and called me in crisis mode saying husband is injured and couldn’t work, they had to get a new health insurance plan, car repairs, all stacked up. They are in a rough spot and can’t pay.

They tried to seek assistance but I guess the programs have changed where you actually need to show them an eviction notice to be able to apply for assistance.

They are asking me to take them to court for eviction so they can then apply for assistance.

I don’t like this. I called and confirmed, that’s the case.

It’s December tomorrow, they will soon be 2 month behind. Should I show compassion, let them wait till tax season? Move forward with the eviction? Find another way?

I’ve had a tenant in my property for about 6 months.

He’s been a problem from day one getting the rent in on time and it’s driving me nuts.

So far he’s always managed to come up with the rent and the late fee every time but it comes in increments. He doesn’t say anything until I send the late notice and begin asking him for updates.

Like I said, he’s never NOT paid and has always managed to pay the rent in full by the end of the month, plus the late fee but then it starts all over again every month.

It’s such a hassle getting a new tenant, and I know the moment I tell him in terminating the lease early the pay will stop and I’ll have to go through months of getting him out and turning it over which will be expensive.

What would you do?

I’ve been in the investing game about 5 years now. I’ve done flips, brrrs, 1031’s, I have a handful of airbnbs running with a handful of rentals in my portfolio.

I’m ready for the next thing, but dam this market is tough. I can’t find anything. The numbers on what’s available don’t make financial sense to go after. Everything is too expensive, and the rates are too high. I’m in the Philadelphia suburbs.

I keep thinking, maybe now just use the capital I have to pay down debt and increase cash flow? I’ve always been told to always reinvest into more properties but it’s hard to deny:

$50k won’t we me anywhere in this market. But if I use $50k to pay off an existing mortgage, there’s an increase of about $500/m instantly.

Thoughts?