All Forum Posts by: Zane Cress

Quote from @Tosin Omoba:

Quote from @Zane Cress:

If you are on Bigger Pockets then you should use the RentRedi software to list on multiple platforms at once. Only listing on Zillow is not a good strategy. 

What is the RentiRedi software and how can I get access to it?

 Go to the top bar next to the bigger pockets logo and under "tools" you will see RentRedi

If you are on Bigger Pockets then you should use the RentRedi software to list on multiple platforms at once. Only listing on Zillow is not a good strategy. 

Have you factored in your depreciation benefits? Maybe that will help you on the tax side to break even this year. Losing 50k+ on selling does not sound like a good plan to me. Where can you go that any cash flow will make up for that loss in a reasonable amount of time? That's easily a 10 year return on a cash flow deal these days due to current rates. Maybe look for ways to trim costs, especially in the slow season, or add some unique items to the property to engage more nights booked. Understanding your target customer in STR is critical and then catering to them. If this area is likely to go up in value again due to it's location and features then you will make the money back over time. If you can afford to feed it for a while then it will probably be worth it.

Quote from @Juan Lizarazo:

Hello beautiful community! In the ever-evolving landscape of investments, I'm curious to hear about the strategies that savvy investors are currently employing. I am navigating the financing of a deal via a DSCR loan and have encountered an intriguing decision point.

The options I am presented with are as follows:

1. 1. Opt for an interest rate of 9.125%, which would result in decreased cash flow and a larger payment amount, with a lesser contribution towards principal. However, this option provides the advantage of only a 1% prepayment penalty for the first five years.
2. 2. Choose an interest rate of 8.5% (no point buydown) but accompanied by a steeper 5% prepayment penalty, which reduces by 1% annually. The core distinction between these two options, other than the interest rate, lies in the varying prepayment penalty scales: 4% more for the first year, 3% for the second, and so on.

With the latter option, my cash flow is healthier in the present context. Although one might think of refinancing as a viable approach when rates drop, predicting such shifts in the financial terrain is, unfortunately, beyond our skills—it could be a year or even a decade away.

I would love to gain insights into how many of you are structuring your financing in today's market. I am inclined towards the option offering a lower rate, as it provides a superior cash flow in the present and future, I will make more money starting today and my tenants will pay off more principal sooner. Nonetheless, should I choose to refinance within the next five years, penalties will invariably factor in, and thus any refinancing would necessitate a significantly more favorable rate to make it worthwhile.

Your valuable perspective is greatly appreciated. Thank you in advance for your insights!

I just bought 3 properties on a similar structure. 3yr ARM with prepayment penalties of 3%, 2%, and 1%. The reality is that if rates came down low enough in the next 2 years it would be worth the penalty to Refi out. The odds of rates coming down significantly in the next 2 years is very low regardless of what all the optimists are saying. You can look at all the Fed reports and see that they are higher for longer. Everyone who said last year that rates would come down by Q4 of this year was absolutely wrong, and ignored everything the Fed said it would be doing to hype people into buying now and Refi later. The 10yr Treasury prices are also a concern for lower rates being a reality.

My lender will also not charge a prepay penalty if I Refi with them, the penalty only happens if I take my loan to another lender. They just want to keep your business in house because they will make money on the new loan origination and then the start of a fresh loan even at a lower rate. 

Quote from @Jennifer Goddard:

I'm planning to relocate to Atlanta and am interested in finding an area that's right outside of the metro area with a couple of acres.  It should be easy to get to the metro area, close to at least one hospital and an area that is attractive to visitors. An area that is not quite up-and-coming, safe, but not maxed out in terms of opportunity to grow equity. What are some good areas that would be smart to look in?

Depending on how far/long you want to commute there are several options. Atlanta traffic is hell so it really depends on what hospital you are talking about. North of Atlanta you could look at Canton and Cumming. East of Atlanta look at Lawrenceville and Snellville, maybe Dacula because of a tech project that is breaking ground. Don't go south of Atlanta. West of Atlanta look at Douglasville area. 

Quote from @Bradyn Melser:

Hey community. I've been investing for a little while in rentals. I've done a couple methods (including the BRRR). I now have 4 cash flowing rentals and am loving investing, but I have a problem. I hit my DTI with the acquisition of my last 2 properties (I did them in one go). How do I keep acquiring properties and getting them under a mortgage?? No one seems to answer this for me.

Other helpful information:
My income isn't huge, but I've got enough to continue to scale for now. The only debt outstanding I have are these 4 rental properties. 2 I have amazing rates on (3% and 3.5%) and have a decent amount of equity now. 

The DSCR is your most common tactic in this situation. I have utilized another strategy with my local lender that bundled all my properties together and used the equity and cash flow I had to acquire more properties under the same loan for me. It's their in house version of a DSCR but only a 20yr term unfortunately so the monthly cost is higher. You should go talk to lenders in multiple local banks and see who can work with you. If you are cash flowing and stable someone will help you out, they all need loan business right now.

Quote from @Carlos Quiros:

Hello all-

I am looking at a few properties, one in particular is fully remodeled, has tenants but after asking questions about the area on a facebook group I am told that gunshots are heard in the area and police are present often.

Is this an area where as an investor one sees opportunity with a unit thats fully renovated and a start to beginning to gentrify an area or an area where you'd rather avoid until more people jump into that ship

Any advice would be helpful & appreciated

Carlos

 As a Georgia person I would not recommend blindly investing in Savannah. It is a great town but very patchy. You need to be familiar with the neighborhoods to buy there and be successful. As a new to real estate investor I would recommend sticking to B and A class areas. It might cost you more but the headache will be way less and the long term cost of maintaining the property and dealing with the tenants will be significantly less. If you want to get in for a low cost come check out Athens, GA. Inexpensive with a strong student population and steady appreciation in price and rent. 

Quote from @Steve Judkins:

Newly empty nested. The wife and I are looking to buy small multi-family to house hack. We are not location dependent as we work remotely (just need to be within 1 hour of at least a regional airport). What markets are the most promising right now. We are rookies and are wanting the self-managing experience in our first LTR. We are not hung up on positive cash flow during our owner occupancy phase.  Wishlist: turn-key property, 3-4 doors, $600k or less.

 Hey Steve. Local Athens agent and investor here. I have a few duplexes on market at the moment if you want to discuss let's connect and see what works for you. 

Hey Bob, local agent and investor here. Are you local or looking to invest from a distance? Would love to discuss what you're planning. 

Your realtor is not a home inspector, some of us have a good eye and do work ourselves that we can make recommendations on, but if this is your first place and you are buying from a wholesaler you should spend the money to be safe with your investment. That place could have a foundation issue that your realtor wouldn't spot, which could cost you $10k+. Play it safe early on.