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All Forum Posts by: Account Closed

Account Closed has started 13 posts and replied 53 times.

Post: Need BP wisdom on my next lending strategies.

Account ClosedPosted
  • Real Estate Investor
  • Cincinnati, OH
  • Posts 55
  • Votes 26

Katharine Thank you for your time to type out that response. 

I will respond to some of the things you brought up to hopefully help clarify further for future readers. 

I agree with you I need to work on my financial vocabulary. I mentioned my Personal income, not business because we are going to be doing the cash out refis in our own names rather than the business. We believe because of our low income as we will only be able to each have to in our personal names rather than the current limit of four each. 

We have run over model several times and our current properties all cash flow very well so much so that even with the addition of debt service it would still be cash flowing approximately  $350. We really don't look at appreciation to hard. Kind of the cherry on top deal. When analyzing I always expect zero appreciation over 30 years not likely but better safe. 

We defiantly are not doing all these cash out refis all at once. We have and will begin with one and see how it goes. 

Your response keeps me thinking and moving forward!

Post: Need BP wisdom on my next lending strategies.

Account ClosedPosted
  • Real Estate Investor
  • Cincinnati, OH
  • Posts 55
  • Votes 26

Bigger pockets mentors,

I am looking for your take on my situation and what strategies you suggest I explore further. I have read forum after forum, Blog after blog and decided to get some of these wise answers specifically catered to my situation.

I apologize for my poor writing skills I am dislexic and writing/punctuation is difficult for me.

A little background:

All through college my business partner and my self ran a construction company renovating other peoples kitchens , bathrooms, decks, etc. ( doing all the work ourselves). I Graduated college and had no intention of entering the corporate world. My self and my business partner have business degrees and the construction skills. Through college we also worked as contractors for a REI doing buy/hold & flips. My partner and myself agreed contracting had a ceiling on it we felt was too low. So we planned to transition into REI. Two weeks before graduating college we bought and rehabbed our first rental with our own cash. The following two years we bounced back and forth from doing a high end kitchen and or bath for someone and taking that money and putting it into the next rental. By doing this we have now bought, COMPLETELY rehabbed, and rented 8 single family houses with our own cash. We have slowly almost phased our self out of working on other people homes as our cash flow has increased. The past six months we have spent a lot of effort learning how to work on our business rather than in it. We have come up with current and future organizational structures. business plans. As many systems and processes as we can document so when the time comes that we can climb our own organizational latter. Filling the spot we left should be as simple as handing the new person the guide we have wrote and over seeing.

Our numbers are fantastic when it comes to cash flow / ROI ( not a surprise when you buy cash and do all the work yourself)

Now the issue, Buying these houses all cash, I have not forced my self to understand leverage, financing, and all aspects of raising capital creatively. I know that our next steps will be getting conventional cash out refis on as many of the properties as we can. We have already found a mortage broker who is sure he can get myself and my partner each two individual cash out refis 70% LTV at approximately 5% but beyond that we may need to get creative. I have begun creating a portfolio for private money lenders to look over. Once that is finished I plan to take that to my attorney and discuss the legal aspects of approaching this strategy. I would defiantly begin with my close network of family and friends and then branch out to my previous clients of my construction company. They are most likely accredited and most really liked me and my partner. Some points to note when considering lending strategy:

1) The properties are in an LLC

2) Because we put almost everything back into buying the next properties our income is LOW (Before tax I personally made 15-16k in 2013) my partner is the exact same.

3) I have literally no debt. apart from my CC I pay in full each month.

4) my credit score is 730, partners 760

5) I am 24 years old so regardless of my numbers private lenders & loan officers may be hesitant.

6) I am located in Cincinnati OH.

7) Our properties have an ARV of 45k- 75k (conservative)

8)All but 2 properties have 12 months seasoning

9) our purchase price is usually 40% or less than ARV because we buy highly distressed. We can easily change this strategy if needed.

 I re-read my own forum post and thought my question was unclear. I will try to simplify.

Based on the information above how would you maximize growth with the cash out refis? And then when those run out what strategy would you take? I was kind of thinking mixing the cash out refis and private money covering my "skin in the game" with the funds from the cash out refi. 

Wow that was long. Any one who made it, Thank you!

Post: First Deal Looking for Advice / Analysis

Account ClosedPosted
  • Real Estate Investor
  • Cincinnati, OH
  • Posts 55
  • Votes 26

You mentioned lockland, I own two there one pulls 925 a month and the other 1100 a month. I believe I have the two highest priced rentals in that whole municipality. Lockland is very hard for outsiders to run an analysis on because it is so small yet borders such vastly different areas. for example Wyoming is to its west with house in the millions and Lincoln heights to its north with All combined houses may not even equal $1 million. during college I bought a house in lockland and lived/rented there with friends. It can be profitable but i wouldn't count on appreciation. The house I rent for 925 I bought for 18k and only put 8k into it so its has nice returns. I stay out of anything worse than lock land. At all cost I avoid the price hill Lincoln heights, Westwood areas. I have seen investors make that mistake and it is just a nightmare. This is my full time job so right now I am doing all aspects of the operation from acquisitions to contracting to managing so If its going to be a constant headache to mange its not even worth looking at no matter what the numbers are. I don't have one specific area I buy in I simply follow the deals and stay away from the lowest areas. I am born and raised right in central cincinnati so I have a very good understanding of the area. If you need any advice just let me know and I will do my best to help. 

Jered

Post: New to raising $ side of REI. Anyones 2cents welcome & appreciated!

Account ClosedPosted
  • Real Estate Investor
  • Cincinnati, OH
  • Posts 55
  • Votes 26

I re-read my own forum post and thought my question was unclear. I will try to simplify. 

Based on the information above how would you maximize growth with the cash out refis? And then when those run out what strategy would you take? I was kind of thinking mixing the cash out refis and private money covering my "skin in the game" with the funds from the cash out refi. 

Post: New to raising $ side of REI. Anyones 2cents welcome & appreciated!

Account ClosedPosted
  • Real Estate Investor
  • Cincinnati, OH
  • Posts 55
  • Votes 26

Bigger pockets mentors, 

I am looking for your take on my situation and what strategies you suggest I explore further. I have read forum after forum, Blog after blog and decided to get some of these wise answers specifically catered to my situation. 

I apologize for my poor writing skills I am dislexic and writing/punctuation is difficult for me.  

A little background:

All through college my business partner and my self ran a construction company renovating other peoples kitchens , bathrooms, decks, etc. ( doing all the work ourselves). I Graduated college and had no intention of entering the corporate world. My self and my business partner have business degrees and the construction skills. Through college we also worked as contractors for a REI doing buy/hold & flips. My partner and myself agreed contracting had a ceiling on it we felt was too low. So we planned to transition into REI. Two weeks before graduating college we bought and rehabbed our first rental with our own cash. The following two years we bounced back and forth from doing a high end kitchen and or bath for someone and taking that money and putting it into the next rental. By doing this we have now bought, COMPLETELY rehabbed, and rented 8 single family houses with our own cash. We have slowly almost phased our self out of working on other people homes as our cash flow has increased. The past six months we have spent a lot of effort learning how to work on our business rather than in it. We have come up with current and future organizational structures. business plans. As many systems and processes as we can document so when the time comes that we can climb our own organizational latter. Filling the spot we left should be as simple as handing the new person the guide we have wrote and over seeing.

Our numbers are fantastic when it comes to cash flow / ROI ( not a surprise when you buy cash and do all the work yourself)

Now the issue, Buying these houses all cash, I have not forced my self to understand leverage, financing, and all aspects of raising capital creatively. I know that our next steps will be getting conventional cash out refis on as many of the properties as we can. We have already found a mortage broker who is sure he can get myself and my partner each two individual cash out refis 70% LTV at approximately 5% but beyond that we may need to get creative. I have begun creating a portfolio for private money lenders to look over. Once that is finished I plan to take that to my attorney and discuss the legal aspects of approaching this strategy. I would defiantly begin with my close network of family and friends and then branch out to my previous clients of my construction company. They are most likely accredited and most really liked me and my partner. Some points to note when considering lending strategy:

1) The properties are in an LLC

2) Because we put almost everything back into buying the next properties our income is LOW (Before tax I personally made 15-16k in 2013) my partner is the exact same. 

3) I have literally no debt. apart from my CC I pay in full each month.  

4) my credit score is 730, partners 760

5) I am 24 years old so regardless of my numbers private lenders & loan officers may be hesitant. 

6) I am located in Cincinnati OH. 

7) Our properties have an ARV of 45k- 75k (conservative)

8)All but 2 properties have 12 months seasoning

9) our purchase price is usually 40% or less than ARV because we buy highly distressed. We can easily change this strategy if needed.

Wow that was long. Any one who made it, Thank you! 

I am simply asking your fuel for thought. Any input is greatly appreciate and I will look into all suggestions. 

Jered Sturm

Post: First Deal Looking for Advice / Analysis

Account ClosedPosted
  • Real Estate Investor
  • Cincinnati, OH
  • Posts 55
  • Votes 26

Hi Joe,

we have a lot in common, I also consider myself a newbie. I Also live in Cincinnati to be specific I grew up in finneytown and currently live in mt healthy. I have 8 single family properties in a 20 miles radius of my home. I purchased off the MLS. I am now attempting to get away from the MLS because I feel the great deals never existed on the mls and the good deals are gone.

Unfortunately, many of the houses I have offered on recently have been going above asking .  That is not to say you should pay asking or above it all depends on the deal. I am a buy and hold guy with my main concern being cash-flow so I can't lend you too much advice on the flipping side. I can say that for a home demanding 900-1050 in rent I am purchasing those for 20-30k and putting 5-15  into it. My suggestion is to look in a lower priced part of town if you are thinking of doing buy and hold.  I am happy to lend the little bit of knowledge I have built up on investing in cincinnati if you have anymore questions feel free to message me. 

Jered Sturm 

Post: Hold properties in one entity and manage them from another???

Account ClosedPosted
  • Real Estate Investor
  • Cincinnati, OH
  • Posts 55
  • Votes 26

I don't think I would get insurance on the property management company. It would not have any assets to protect apart from the entity itself.

Post: Hold properties in one entity and manage them from another???

Account ClosedPosted
  • Real Estate Investor
  • Cincinnati, OH
  • Posts 55
  • Votes 26

@Kaitlin S.

Thank you for the response. I am still up in the air on the management company. I would say that if you're renting single family houses an LLC for each property is defiantly over kill and will cause a big headache when it comes to book keeping and tax time. They hit on that in this forum if you are trying to decide on your strategy it may help.

@Shawn Dandridge

I appreciate your input on the topic. I of course will bring this topic to my attorney. Regardless I always enjoy hearing any and all input.

Post: Hold properties in one entity and manage them from another???

Account ClosedPosted
  • Real Estate Investor
  • Cincinnati, OH
  • Posts 55
  • Votes 26

I currently am investing in single family rentals. I hold all of my properties in one LLC. The other day a woman threatened to sue me for discrimination ( I denied her because she had ZERO source of income at the time). I run my business legally and ethically but that incident got me thinking. Can I/should I dilute my liability and protect my properties by forming separate entity to manage my own properties?

Thank you in advance for any responses!

Post: Need advice coordinating a complicated deal.

Account ClosedPosted
  • Real Estate Investor
  • Cincinnati, OH
  • Posts 55
  • Votes 26

Thank you for the input, and fast reply @Mike M. and @Eric Black. Your inputs keep me thinking and moving forward.

To answer your question Eric, Yes I am trying to buy a house that currently has negative equity. I am now leaning toward attempting to purchase the note. From my current understanding this note was sold from Wells Fargo to a much smaller company about 1-2 years ago. Since that time no payments have been made on the note. So my question to the bigger pockets community is when purchasing an individual non performing note of $67,000 can you get them for 20-30cents on the dollar? I have no idea what market is for this type of purchase.

@Mike M - "Collections will probably not talk to you unless the owner provides written permission." I thought this may an issue due to the fact that the woman is deceased. I was going to just hope this small company would talk to me in hopes to get rid of this non performing note. Do you have any suggestions on a way around this??

If I was able to pull off purchasing the note I would then forclose on the deceased owner. Has anyone had to foreclose on a deceased home owner?? Does this differ from standard foreclosure?

If it doesn't pan out I will drop it and move on to the next one. Until then I am going to attempt to exhaust all options.

Thanks all!