All Forum Posts by: Wei Jie Yang

Well, it's been a while. I've been off BP since Covid hit and boy, alot of things have happened! 

1) Experienced 2 turnovers. One with a Bridge/Voepel property and one in Huntsville.

     a) Voepel found a new tenant two weeks after we got the move out notice. No change. Turnover cost was a few hundred dollars(not including the first month fee).

      b) The one in Huntsville found someone Mid-June. The previous tenant left in Jan but paid until April due to being under contract. The PM said it was due to the showing restrictions with Covid, That and the rents we were asking for was significantly higher than the average in the market. That being said, we did find someone for that price. Turnover cost was less than $1K (not including the first month fee)

2) A septic tank was leaking and was needed to be replaced in another Huntsville property in April. Half an acre worth of poop covered a half acre yard. Twice. Why twice? Because apparently you need permitting in order to do this type of work in Huntsville and the government closed down the permitting department (or did something where the permits we needed wasn't able to be issued) until July. Cost 5.5K overall + Lawn repair, which still needs to be done.

3) "Partnered" (I was the money guy) on a Flip in the Michiana area of Indiana. Bought a house for 0% down (owner financed) for 41K + 10K wholesale fee. Did a 40K renovation. Have someone under contract to buy it for 140K. About a $34K profit, and 17K split between me and my partner. 

Overall exciting year. Only regret is that with the flip, I've stopped buying rentals for fear of not having enough money to do the flip properly if something arises. Kinda wished I did the flip after I filled my 10 conventional slots, but oh well, beggers can't be choosers in this case.

Hi @Nicholas Aiola I'm JV'ing a flip with someone out of my state. In regards to the LLC, we originally discussed creating a LLC with us two as 50/50 partners. My partner has since suggested to just create a single member LLC under me and have an operating agreement that states that he would get a 50/50 profit of that particular flip.

Is there any disadvantage to doing it like this?

That's what I mean when I say using hml. I apologize if I didn't make thst clear. For Buying something from A wholesaler/MLS and getting people to help renvoate/rehab the property. Ideally this would be a brrrr situation. Apprently deals a plenty in indy from what I hear. Maybe some in the AL cities as well.

@Patrick Bavaro For me it's not necessarily the HML that I'm having issues with it's the surrounding processes that I still do not have down pat if I were to go with the BRRRR method OOS.

With a regular turnkey, all I really have to do is put something under contract and talk to my banker and be patient with my appraisals, inspections, repairs and any other issues that comes up. Everything would be dealt with and fixed before I close and if their are any issues, I could always force the issue with the seller/company. 

If I were to go with the BRRRR/HML route there are a lot more moving pieces. I would have to be on top of the project manager, contractors, agents, and the individual HML inspection requirements and timelines for a rehab loan. I would have to trust that everyone is doing their part and make sure with just my emails and calls that they are. It's something that I am willing to do but I think I want to build a bigger buffer financially before I start.

Also, alot of HML will only loan to entities, so the refinance portions is usually done thru a commerical loan which is fine, but brings about a lot of other complications as well.

@Patrick Bavaro Yep! It was Robert Booth! Haven't talked or done anything with them yet though other then go on their website.

I've talked with the Manship Brothers. They are on Biggerpockets and are really easy to get in contact of. Evan Manship and Clay Manship. They have their own Facebook group for OOS investors too, which is great and gives you up to date status on things going on around there. I didn't go thru with them initially because alot of my money is tied up with the current purchases and I am still not 100% comfortable using HML.

@Patrick Bavaro I would love to know more! I also was recommended a team in Alabama that did something similar in Montgomery and Bham. I wonder if we're thinking of the same team. 

As far as BRRRR teams go, I know of a few guys in Indy that does it. Alot of Property Managers do it over there too. The Manship Brothers are Wholesalers with a Project management arm. Their main business besides wholesaling deals are managing the rehab/reno that's needed for OOS investors. I went to a conference they had a month ago and it was great. Met a lot of Property Management companies that also can handle the rehab and evaluation portion but obviously can't handle the actual sourcing of properties portion.

Jacksonville from all that I've heard is a great market for appreciation and a bit of cashflow. It's also one of the few markets where you can cashflow with new construction, or so I hear.

Hi @Patrick Bavaro! These are numbers with fixed expenses only (PM, Property tax, Insurance) and doesn't factor in variable expenses like Maintenance and Vacancy which I currently don't have a problem with yet, but are sure to come up eventually.

20% down:

Memphis Invest

PP:159,900

Rent: 1,250

CF: $209

15% Down:

Bridge in KCMO:

PP: $109,950 & $109,950

Rent: 1,075 & 1,100

CF: $358.48 & $405.63

15% with Rent Ready/Min rehab

Jared Garfield in Alabama

PP: $125,000 & $133,000

Rent: $1,450 & $1,495
CF: $537.49 & 499.95

Total CF just about 2K a month.

I really want to do a BRRR but haven't found the right team as of yet. From the turnkey companies I've been talking to it's usually .0095 (bridge, Jared with his turnkey stuff) to .07(Memphis Invest). You get better Rent to Price ratios when you're dealing with non newly renovated rent ready properties, but those comes with caveats, like right now my tenant from the 133K home is leaving a month after purchase.

Oh boy, the Huntsville house I just closed on is going to turnover due to the tenant buying a house of their own. I'm a bit nervous and excited. This will be my first OOS turnover. The lease the tenants signed was favorable to the landlord (they continue to pay rent until we rent the house again or the lease is up, they pay the difference if rented for below their price, they pay all cleaning and leasing fee) and my PM is enforcing it which is nice.  

Most of the issues of the house was already fixed during the initial inspection and purchase so hopefully this won't set me back a few years in terms of cashflow.

@Kyle Seidel You can, but like with everything when it comes to taxes and deductions you need to document, document, document.  

If you can document that you took the loan and solely used it to for a downpayment on a property then you are allowed to write it off. Easier said then done to be honest.

@Dale Rast Other than higher deductions for interest rates I don't believe PMI is deductible on investment properties.