All Forum Posts by: Zachary McCloud

It really depends what you want to do with your investment career first? I wouldn't read on apartment syndication now so what do you want to invest in? The BP books are excellent as primers or overviews on the process and the terminology so if you want to read about STR because you think you might want to do Airbnb first, read that new BP book. Everyone will tell you, if you haven't read it, read Rich Dad, Poor Dad. It's a mindset encouragement book that is great before you get more technical and can set a great framework for you.

Clearly not San Diego prices. I have done quite a few BRRRR in San Diego (8 to be exact). 9 of our properties have had all the investment extracted. So I am definitely qualified to answer for the San Diego market,but suspect my response will apply to you in Iowa.

If the PITI is $600 and the unit will rent for $850 you are likely cash flow negative when allocating for all expenses (Vacancy, cap ex/maintenance, PM (charge for PM even if self managing as it requires work), miscellaneous). The cash flow will get worse when you refinance to extract equity.

I am a big fan of BRRRR and house hacking. Combining the two is an awesome strategy, but your current property is likely not the best property for this method.

I have an ex-home of ours as a rental.  It is by far my worse performing RE judged by virtually every measure but especially if judged by rent to value ratio.  This is not unexpected as the house was purchased to be a good house for me and my family and not primarily as an investment.  It therefore cannot compete with our properties that were purchased with their investment potential being the primary criteria.

In this case, do what I say and not what I do and obtain an investment property that will provide better return than your current. I recognize it is tempting to use it as the initial investment property (it is what I did and many others have started this way), but with the 2 of 5 years occupied there will be no tax on the gains and you should be able to use that money into a house hack/BRRRR opportunity that will provide far better cash flow/returns.

By the way for house hacks, I suggest starting with a detached duplex where each unit has its own separate yard.  It provides the least house hack feel but with all the benefits of house hacking.

Good luck

Yes I forget to mention I am from Iowa. Prices are very different! But I like that idea. Currently my mortgage is around 600/month rent would come in around 850 or 900 I assume. If I could cashflow that much per month on my current residence would you still recommend living there or finding somewhere else to live whilebalso buying rentals? It's a hard questions because only so much of the positive equity money will go so far.  

If you keep the current house and rent it out, what can you get for rent?  How much cash could you take out of the home and still have decent positive cashflow?

I would probably stay in the home, do a cash out refi and use those proceeds to find another property to buy and rent out.  Preferably a multi unit building, or a couple houses on one lot.  

I chuckle at the numbers.  They seem so affordable, here in San Diego, one bedroom condos cost $500,000.  It makes investing very hard.  You should snap up every place you can.  Do it now while you are young and strong and being a bit poor is palatable.  30 years from now you will be on easy street collecting thousands of dollars in rents every month for zero effort.  

Buy, Rehab, Rent, Refinance,-Brrr

FHA loans are 3.5% down so on a purchase price of $65,000($2,275) and and ARV of $170,000 puts the property at a 38% ltv. There are some FHA loans that allow rehab money as well. Not sure what type of LTV they go up to though. Even if they go up to 60% that is $102,000. Is it something you can occupy while your rehab? You may also want to talk wit a HML. Some may go up more on the LTV. Do you have the costs for repairs? Have you figured out what your holding time might be?(Checking with a realtor for days on market for rentals could help) You know how long you intend the rehab to take? Investors will want to know how long they will need to have their money tied up. I would think there would be others to chime in. Even if you don't have cash how is your credit? That always helps along with a stable job that allows more than necessities. Hope it helps some

I would love to see all your numbers you used to project your profit. When a person finds a real goldmine and can prove the nuggets are really gold and simple to extract then every fool in the world will throw money at you. If you are afraid to provide any details about your gold because you think everyone will steal your goldmine from you then nobody will believe in you and you won't get any help.

Post some numbers and real information that can attract help.  

Hi Zachary, 

Have you tapped into your local REI Facebook groups? They can be an excellent recourse in finding lender referrals directly from investors in your local market.

Or google the top hard money lenders in your area, give them each a call, see who resonates with you and run with them! Best of luck!