All Forum Posts by: Zach Morrow

Brought 1st Rental property for $25,000 — Obtained financing based on a subject-to appraisal that came in at $50,000 @ 80% LTV = $40,000. My original thoughts were I would be able to only put $15K into the property and technIcally have none of my own money in the deal. Unfortunately, I bought it without proper due diligence or inspection, and it is in quite a bit more despair than anticipated. — It’s looking like I will end up with about $15k out of pocket for a total of $30k rehab. This includes new appliances, adding central HVAC, flooring, new cabinets/counters, Interior and exterior paInt, foundatIon levelIng, etc. Basically, everything will be new with the exception of some Sheetrock walls that I was able to salvage. I’m really looking forward to the finished product and placing my first tenant!

Matthew Crawford Susan Maneck

@MatthewCrawford - I agree that having some cash reserves is always a good thing. Finding the balance of what that amount should be has always been a question for me.

@MichaelBiggs - This is sort of my strategy on my first property that I'm in the midst of right now. I purchased the property in cash. Got a "Subject-to" appraisal done based on the renovations I plan to perform on the property. At 80% LTV of what my subject to appraisal came back as, I was able to get financing that covered purchase price and all but $5k of my renovation costs. At only $5k of my own money in the deal now, I will make that back within the first year of rental. Since I have a full acre lot, I'm most likely going to split the property in half and build another SFR Rental next to my existing property.

@SusanManeck - That's valuable information. I have thought about taking out a HELOC on my primary residence but have since learned the interest paid will not be tax deductible unless actually used on the property it is taken out against. — I will definitely give this a try on my rentals through a local bank as I begin to acquire them.

Hi Everyone, Making my first post in the BP community and looking for some feedback and opinions. I’ve recently set up my LLC and just waiting on my 80% LTV loan to close for my 1st rental property. Exciting! My wife and I have a pretty nice income which equates to an extra $5k a month disposable which we’ve been using towards our debt pay off (my truck) which will be paid off soon. We are starting with SFR but plan to move multifamily within 5years. I’d like to have 10 SFR’s before making the transition. My wife thinks we should only use our cash flow and buy (or build) a new rental about every 10 months all cash. Construction Management is my career. We’re in Mississippi, so $50k can buy rentals in the right location. Everything I’ve read talks about using leverage and Other people’s money... which way would you attack the situation if you were in our position financially? I appreciate any insight. Thanks, Zach M