All Forum Posts by: William C.

Leverage is one of the greatest parts of REI. Sure if you have the cash have a ball and do it debt free. Some of us need to use leverage to build a portfolio. Does Dave realize we are in a 4% interest rate environment. He needs to adapt to the marketplace. You need to decide what you want though. We can't answer this question for you. Do the math and figure out how long it will take to save the cash to buy a property, or how soon you could buy one using leverage. Maybe you are fine with saving up for 5 years to buy your first property. Personally I would have debt on all my properties whether I needed it or not. I know I can earn more than 4% elsewhere with that cash.

It sounds like your credit score isn't high enough, and has nothing to do with DTi. You have almost no debt. Or, the house your trying to buy makes your payment an amount that your income cannot afford. Talk to another lender to see what they say but chances are you'll need to build a better credit history. Credit is determined by how well you use credit. So if you don't have any open credit accounts, then you don't have a good credit history, you have no credit history. Most lenders also require at least 3 open and active credit lines. Car insurance and phone bills do not count. You'll need to open credit cards.

This only issue I see is the closing costs that you pay transferring the property outweigh any "gain" you'll make by selling instead of just doing a cash out refi. In fact, as an agent iv seen cases where a home would not sell for $250k on the open market in a hot market but the sellers refied and it appraised for $280k. So I just don't see enough meat On the bone by going this route. Just simply find a good deal, rehab, rent, refi and repeat. Lastly the underwriting that will go into getting the LLC these inflated loans might work once or twice but they'll soon catch onto who the buyer and seller are on each of these deals and shut it down. I think your over complicating the BRRR strategy, a proven method of investing. And of course, capital usually being the biggest thing holding most investors back, it sounds like your deca-millionaire friend may not be a what he says he is. Otherwise why go through all this trouble to pull a few thousand more out of each property, which like I said will be negated by transfer taxes and Closing costs. Just my 2 cents though.

Jay Hinrichs great point. Are you looking for more operators? We are always looking for more capital....

Brian Garrett is it that you cannot "prove" you have had any income, or have you just simply made no income at all over the past 2 years? Depending on your answer to this question, my advice will be slightly different although in the meantime I'll say this. Look at your scenario from the side of a lender, would you lend you money? As the lender think about what happens when a trouble tenant rents your property and stops paying rent, lives there for 6-12 months as you drag them through the legal process, only to get your vacant property back that now needs $40k in repairs? How is the mortgage paid in the meantime, how will the repairs be made? Trust me, I realize I'm painting a rare horror story that doesn't happen often, but just read through some threads on this site and it might happen more often than you think. My point being I understand your thought process and it seems like lenders should be more than willing to lend with all that rental income but until you have years of tax returns showing steady and consistent rental income will banks begin to "count" that as income, and even then iv heard it's not a walk in the park. In the short term you can try calling 100 banks, you honestly might find one willing, or try some of the other options mentioned like crowd funding or even better find a private lender like friends family or anyone willing to lend you the money, BUT long term you need to sit down and look at what you want out of REI and life. If you want a bunch of properties, that might mean sucking it up for a year or two and getting a "real" job. I know it sounds terrifying, a J. O. B. After not having one for over 2 years, but until you can produce a steady consistent income through real estate (wholesaling or flipping) you'll need to produce income another way to qualify for loans and implement the BRRRR strategy.

Baylie Sappir it's definitely not too late. I have been wrapped up in a unit I'm preparing to rent next week and haven't been able to look into a location that will take us. If anyone has any ideas please feel free to share. We could always grab table a large bar like Great American Pub as mentioned before but I was thinking something more intimate like a private room. I'm also trying to keep it free for everyone to attend. I'd also like to make the day consistent month to month so we can prepare ahead of time to meet. Whether it's the second Tuesday or Wednesday of every month, it'll keep it simply and consistent. Let's keep the conversation moving, I will check with a few establishments this afternoon to see about hosting us. Anyone out there know a bar or restaurant owner willing to open their door for us?

David Faulkner I would agree with your point although being in a strong rental market with little demand I had 50 inquiries into my 2 bedroom unit and was able to rent to great tenants but when maximizing a units value your going to be a the top of the market for the unit so every call counts. Sure I could rent any unit in a day by under pricing it by $200/month, but that's $2400/year in lost income. There is a very fine line to walk between pricing right, getting the right tenant and filling the unit as soon as possible. Kim Meredith Hampton unfortunately the timing for this unit made 45-60 days out right during Christmas and the holidays. I have to blame some of the lack of interest in that. I could be wrong about my "available date" thought but it's also a strange coincidence that interest has just picked up 10 fold for no other reason.

I want to share my experience and see what other landlords think about this epiphany I had today. When renovating units we always market our units online as soon as we have some reasonable photos to go along with the ad. Sometimes I'll even use another units bathroom given we use all of the same materials and the layout will only differ slightly. The point is to get interest as soon as possible by as many prospective tenants so we can have it filled with the best possible tenant as soon as the unit is ready. While non of this may seem like rocket science I wonder if others are doing the same thing? What I noticed today though, was sites like Craiglists and Zillow have a spot to fill in the availability date. Iv always put the date in which we expect to finish the unit. We always get those proactive tenants who are trying to do the right thing and start their search a few months early but we all know that an empty unit waiting for their preferred start date just won't cut it. So anyway over the past month or so I received about 10 inquiries into my unit. I blamed the low response on a number of market factors like time of year, the price, and the fact it's a 4 bedroom which has a smaller tenant pool. Low and behold today was the so called " available date" of my unit and in the past 24 hours I have received another 10 new inquiries into my unit. My thought is that tenant are seeing the available date and holding off on reaching out until the day is either closer or has already come. With that said, has anyone else noticed the same phenomenon? I only have a sample size of 2 units in the past 4 months but both times calls and emails picked up once the unit was "available". In the future I will certainly be using an available date of earlier rather than later. Iv found by prequalifying over the phone I'm able to weed out any tenants who would not be a good fit based on our application process, and we only need to show the unit to a few qualified, motivated tenants and we have the unit rented. Any input would be appreciated but I also wanted to share my experience in hopes to helping a landlord in the future rent their unit faster. I can't be the only one that sees every day on the calendar as a dollar amount and hope to have it filled the exact day the paint dries.

LaMonica Evans it sounds like your RE broker doesn't know what they are talking about and you need to find a new one that will put YOUR interests first, and not their own. As an agent myself, I see too way many times agents giving bad advice in order to just make a commission. Furthermore too many agents don't have experience in anything but SFR and standard financing so they will say something like "oh a 203k loan is sooo hard to get". Or "it'll be sooo hard to sell a multi family compared to an SFR". To be honest before I knew anything about 203k loans I thought they were hard until I actually learned the process and helped a few clients utilize them and now knowing the truth anytime I hear otherwise I want to break something. Google a 203k loan of your not sure what they are, and I'm not necessarily recommending it's the best option for you, or anyone else for that matter, it's just an example of what agent will say regarding a certain loan or house when they don't have all the facts. My point is your broker probably has no experience selling multi family so therefor they are pushing you to an SFR as to not look dumb, or worse lose a deal because they don't know what to do and have to pass you off to someone with experience. OP, great job so far. Keep hustling. Love to hear stories like yours.

I have a situation that I'm trying to get creative in and I want to know if I'm going about it the wrong way. Here the deal and my plan. A seller needs to sell so they can move on and buy a smaller home. They plan to rent after then sell and then buy something. They have a mortgage of about $180k. We plan to buy for $200k, renovate for $70k and sell for $370k. Here's where it get tricky. I have a rental I could move them to for 6 months. We would buy the home, or lease it? Renovate, and then sell. Pay off her loan. Give her the difference between sales price of $200k and mortgage. Profit the rest. By going route, we save 2% transfer tax, I leverage my empty rental to sweeten the deal, we avoid holding cost and closing costs on the purchase. We could save nearly $20k by doing this. Am I on the right track with sub 2? Or am I just complicating a good deal and should I just buy, fix and flip? Any advice would be much appreciated. This is not my first flip. I have been an agent for 8 years so I'm well versed in real estate transactions. The renovation and ARV numbers are accurate and conservative and are not just being given to me by a wholesaler.