Real Estate Investing: My First BRRR - A Success! |
- My First BRRR - A Success!
- My Accountant tells me I should only put 3% down for a mortgage versus the 20% because the government will subsidize the remainder and I can invest the 17% elsewhere. Is this a good strategy
- 20-30% ROI with no leverage? This can't be right. What am I missing?
- To record or not record a deed
- How do you acquire more properties?
- What does it actually mean to shop for rates?
- 20 years old, 49k/year job, currently still living with parents, only cost are my car and phonewhich is about 200$/months.
- First Deal - Need some honest feedback!
- Trying to get funding for my first deal!!
- If you inherited a million dollars, how would you invest it? (In RealEstate)
- Getting Mortgage Tomorrow for Rental Property
- HELOC interest tax deductible if used to purchase a new property?
- Seeking advise on real estate investing
- how do you find an investor-agent?
- Looking to purchase investment property currently unemployed can I get a mortgage?
- Found a rental unit home that seems cheap but is it reasonable? any catches
- Want to start preparing myself for my first rental within a year. Any resources or advice?
- What do you think is going to happen to RE in HCOL areas where a good portion of the population are in jobs that are remote-friendly? Now that we know they are not going back to the office for a long time, if ever.
- When does it make sense to do a 15yr mortgage vs 30? And what kind of deals are you guys finding nowadays
- Running numbers on a BRRRR SFH deal - your opinions?
- Sheriff Sale -- How can I have a certified check of 10% of the sale price when it's an auction? Catch-22.
- Would you invest in our situation?
- Asking for a percentage of the revenues
- Former Maricopa County Assessor Paul Petersen pleads guilty to fraud in adoption scheme case
- RE Partnership Structure
| Posted: 19 Jun 2020 09:05 AM PDT Hey all - Just finished my first BRRR and thought some here would be interested in the numbers. I bought a 2BR 1BA 1,000 sq foot home for $30,000. It needed quite a bit of work. The floor in the bathroom around the toliet was falling in, the floors everywhere had been stained so many times they looked rough, the walls had nicks and dings everywhere, the back room smelled like dog urine, old tenants were smokers, electric was all on one circuit, and the list goes on. I bought the place and it was renting for $400.00 per month to a lady who was not taking care of the place. It needed so much work anyway, that I offered to let her stay there and only increase the rent to $500.00 per month and phase that in if she wanted to stay, as well as fix the immediate needs, which were the bathroom floor falling in and the electric all being on one circuit. She accepted, and then promptly found somewhere else to live. Good riddance. I then started the renovations and sunk $8,700 into the place. New gas stove (to take pressure off the electric), electrical issues fixed, new vinyl plank flooring throughout, new paint throughout, completely redid the bathroom, and some other repairs. Put a tenant in at $550.00 per month. Likely could have gotten $575 but it was a elderly couple I think will take good care of the place and on a fixed income so will pay their rent. Just got it reappraised at $45,000. Contacted the bank and got a $40k loan against it for 20 years at 4.25% (which means 85% LTV 15% down). After paying off the existing mortgage of $25k, I will pocket $15k. This is enough to reimburse for repairs of $8.7k, old downpayment + closing costs of $5.3k, and new closing costs up to 1k. Bottom line? I HAVE ZERO DOLLARS OF MY OWN MONEY IN THIS PLACE. INFINITE RETURNS ON THE INVESTMENT! Here are the final numbers cash flow wise: $550 rent $250 mortgage (4.25% for 20 years) $30 flood insurance $30 insurance $30 property taxes $110 for maintenance and vacancy (20%) = $100 per month cash flow + it pays for itself over 20 years. Now I can take that $15k and buy some more real estate! [link] [comments] |
| Posted: 19 Jun 2020 08:27 AM PDT Buying first home and my accountant told me that I should put as little down as possible and invest the rest is this the best strategy given that mortgage interest is deductible [link] [comments] |
| 20-30% ROI with no leverage? This can't be right. What am I missing? Posted: 20 Jun 2020 01:42 AM PDT I'm a Canadian and I just did some napkin math on properties in a few cities in Ohio, Oklahoma and Nebraska. I'm coming up with numbers that don't make any sense to me. It looks like you can buy properties in the $40K-$70K range and rent them for $1K-$2K a month with minimal renovation? Even with what I think are conservative numbers (high expenses and lower than the listed comparable rents in the area), my projections are still in the 20-30% ROI range, even buying the houses with no leverage. Is this right? To put those numbers in perspective, I own 2 duplexes west of Toronto, Canada right now, each worth about $600k, each of which net me about $3500 a month, which is a reasonably good deal in my area. Which is why these numbers from the US seem too good to be true. If thats is actually true, why would anyone rent in those parts of the USA? Isn't it just cheaper to buy? If these numbers are remotely true, I should liquidate everything and buy in these areas with a local property manager. But I feel like this is one of those "if it seems to good to be true, it is" moments. Anyone with experience in these markets, I would love to hear your experience. Thank you in advance. [link] [comments] |
| To record or not record a deed Posted: 19 Jun 2020 06:44 PM PDT I will be consulting an attorney but wanted to get your thoughts. My brother and I own a condo deeded under both of our names. We want to transfer it to our LLC that is owned 50/50 by each of us. Our county registrar has a high transfer tax and explicitly does not give an exception when transfer from personal name to an entity with the same beneficial owner. My understanding is that a notarized deed is legally binding and the only reason to record the change is so that in normal cases if you buy a property then no one can sell the property to someone else and quickly record a deed and the seller keeps your money. So my question is: can we execute a notarized general warranty deed to our LLC and avoid the transfer tax by never recording it since there is no risk of the above scenario happening since the current owners on record (my brother and me) would be the same beneficial owners post-deed? Am I stupidly missing an important consideration here? [link] [comments] |
| How do you acquire more properties? Posted: 20 Jun 2020 01:26 AM PDT There's usually a 6 month seasoning period before you can refinance and potentially acquire another property. What if you want to acquire more properties and not have to wait for the six months to refinance ? Do you go for a commercial or portfolio loan and what should you know about them? [link] [comments] |
| What does it actually mean to shop for rates? Posted: 20 Jun 2020 01:23 AM PDT I have heard is it a good idea to shop for rates when getting a mortgage, but how does one go about doung that? Do I just go and get pre-approvals with multiple banks in a short period of time? I.e. 45 days or less? Is it true that if I get all of these pre-approvals at around the same time i.e. within 45 days or less it will only count as one inquiry? Would going to a mortgage broker eliminate the need for this? Or would you just get pre-approved with multiple mortgage brokers? [link] [comments] |
| Posted: 20 Jun 2020 12:43 AM PDT Would it be valuable to wait 1 year and save up, and invest in real estate? What did covid do to the market? Thanks [link] [comments] |
| First Deal - Need some honest feedback! Posted: 19 Jun 2020 06:00 PM PDT Excel snippet attached Anything you'd do differently? Anything I am missing? Legal 2 Flat, 3 units. Does this pass the sniff test? This does not include the equity component, the tax shield from depreciation, Opex writeoffs, and mortgage deduction. Nor does it include the equity componenet. Under these circumstances, after accounting for the tax benefits and assuming I beared the cost of the Water, Gas, Electric, Insurance, Opex, Capex, I would be cash flowing ($10,000.00), this would essentially be my cost to live there. I live with family now, so I am not reducing my living expense. [link] [comments] |
| Trying to get funding for my first deal!! Posted: 19 Jun 2020 07:35 PM PDT How do I logistically establish funding for a deal? Hi everyone!! I'm trying to raise funding for my first deal. A little bit of background, I'm a new college grad from Indiana University starting my career in consulting in Chicago in a few weeks! Besides that have had no steady income in the past besides part time jobs and internships, so getting a traditional loan seems tough. I'm thinking about trying to raise 650k for an all cash deal (listed at 750k) to buy a 5plex in a nice neighborhood, but don't know how establish a fund. The goal is to refinance in a couple years for a lower interest rate than one I would ask for from my investors. Thoughts on how to start a fund? Not sure how payments work, how do I keep track of funding, do I go ahead and start the LLC? Would also love other tips for creative financing. They aren't interested in seller financing, I'm not living in the property so FHA is out of the way and I'm not a Veteran so no VA loan. Ideally don't want to partner on the deal but also open to it since it's my first. Just scared I have nothing to offer since I don't have capital and was planning to hire a property manager. Super willing to analyze and find deals however! I did also post this on r/realestate so please don't think I'm trying to spam! Thanks! Background: I believe the sellers were actually the developers for the 5plex and are trying to get cash to continue developing. The property was built in 2002, so they've held it for a bit. [link] [comments] |
| If you inherited a million dollars, how would you invest it? (In RealEstate) Posted: 19 Jun 2020 03:52 AM PDT The goal would be to replace your income with rental property, and quit your current job. First step is to pay 370k In taxes ouch. Then I'd start looking for deals on cash flowing properties, and start making 20% down payments and acquire as many cash flowing duplex, 4-plex and apartment buildings as I could. I'd be tempted to payoff my house, but I think it's smarter to just keep that cheap low int debt and buy up properties. Is better strategy? [link] [comments] |
| Getting Mortgage Tomorrow for Rental Property Posted: 19 Jun 2020 10:38 PM PDT I'm in need of help. I own and have paid for my $160,000 condo unit. I have 100k in the bank and am certified for $240,000 financing from the bank. I just bought a $305,000 house and am thinking I'll rent out the condo. To my understanding, I should put as much money from the condo (thus starting the full $160,000 mortgage again on it) and put that money toward the house. If I rent out at $1200/mo, interest is 2.5% (open variable mortgage so I can quickly change my mind on renting and slam the money down on the house if the condo sells), prop tax is 1800/yr, condo fees $210/mo, then is it worth it to rent out the condo or sell? I've tried the online calculators, but can't seem to get any consistent sort of numbers going. Thanks for any help. [link] [comments] |
| HELOC interest tax deductible if used to purchase a new property? Posted: 19 Jun 2020 02:46 PM PDT I understand if a HELOC from property A is used to renovate property A, the interest is tax deductible. But what if a HELOC from property A is used to buy property B, is it still tax deductible? [link] [comments] |
| Seeking advise on real estate investing Posted: 19 Jun 2020 08:33 PM PDT Hi everybody, I have three question. I am hoping to obtain some advise from knowledgable folks from the forum. Thank you in advance. (1) All else created equal which has the best rate of return: single family homes , condos, apartment buildings, duplex/triplexes/quads, or commercial real estate. If a young man saved a fair some of money (say 300k for example) and could afford the down payment for any of them, which of the above would give him the best rate of return. (2) In state vs out of state real estate investing. I live in a fairly expensive area, but in other states there are significantly cheaper deals than my local area. Do you think managing out of state real estate properties is difficult and is out of state estate investing worth it? If so, what parts of the country would you recommend real estate investors look for in order to get the best rates of return? (3) What is your opinion on real estate investing companies? Are they worth it and if so what companies would you recommend? [link] [comments] |
| how do you find an investor-agent? Posted: 19 Jun 2020 11:24 AM PDT hi, newbie-here... how do you guys find an investor real estate agent? I heard a lot about the importance of having a real estate agent that's an investor, in contrast with pure residential agent... because they have much more experience with investment ready properties and what it takes to get it to work... this is of course for people looking for cash flowing real estate investments as i assume many of you here are in that category... How do you look for and find such an agent? [link] [comments] |
| Looking to purchase investment property currently unemployed can I get a mortgage? Posted: 19 Jun 2020 07:59 PM PDT Hello Currently unemployed, I'm interested in I getting more involved in real estate investing. I have a few properties that are self sufficient and producing income for me. I'd like to increase my real estate portfolio. I have saved a significant amount. I was generally looking to put down 20% but could do more if needed. In the past when applying for a loan they wanted to see I was employed and asked to see paystubs. Is it possible to get a mortgage to purchase the property even though unemployed? Any assistance appreciated. Thanks [link] [comments] |
| Found a rental unit home that seems cheap but is it reasonable? any catches Posted: 19 Jun 2020 07:59 PM PDT https://www.redfin.com/CA/Rosemead/2718-Muscatel-Ave-91770/home/6989839 is the url. For the area it seems cheap but unlicensed garage. I think I can drop it down by 5-10% but it has been in the market for 163 days. Does it seem too good to be true? [link] [comments] |
| Want to start preparing myself for my first rental within a year. Any resources or advice? Posted: 19 Jun 2020 06:40 PM PDT I just got an opportunity to live rent free for a year and want to fully take advantage of that so by the end of the year I can put a down payment on a investment property. Most likely a duplex since I dont know if I'd be able to handle fixing up 3-4 apartments since I am doing this by myself if I went with a larger property. Some questions I have regarding the matter:
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| Posted: 19 Jun 2020 10:11 AM PDT Let's say, Seattle or SF have a sizable proportion of the population making multiples of the local median income. It's been partially a reason why those cities have become so expensive in terms of RE in particular. Now that a good number of companies made it clear that there's no coming back to the office this year and perhaps even for longer, I've seen people waiting for their leases expire and move away from the city. Because why pay $2,500 for a one bedroom next to the office if you're not going to be going there, possibly ever? By the time things are "back to normal", the entire workforce and processes will probably be readjusted for remote work to the point that most people won't need or won't want to go to the office regularly as they used to. Perhaps, once every couple of weeks or once a month/quarter. Then making that trip even from a place that's three hours away suddenly doesn't seem like a big deal compared to if it was more frequently. At the moment, at least Seattle, is still a sellers market and it's very hard to buy anything decent. But if more people start departing within the next year or two, it might start dropping. I know this is pure speculation and no one knows what's going to happen. But what are your thoughts on how the new reality in highly paid remote-friendly sectors going to impact major RE markets? [link] [comments] |
| Posted: 19 Jun 2020 03:56 PM PDT Im still looking after 3 years ahhh its probably me overthinking and analzying. Im looking for a duplex to house hack in Philadelphia. Any tips? [link] [comments] |
| Running numbers on a BRRRR SFH deal - your opinions? Posted: 19 Jun 2020 11:49 AM PDT Considering this as a BRRRR investment. What do you guys think? Much of this deal hinges on repair cost & ARV, but I'm assuming $20k repair costs to have it rental ready, and $125k ARV. (The repair costs won't be known until I get a GC to take a look). I have a PM who charges me 7% monthly, which is why I have that low PM fee in there. I've done a previous investment in this area, and was able to get higher rents, so I'm being conservative on rent of $925. [link] [comments] |
| Posted: 19 Jun 2020 11:12 AM PDT This is a strange requirement. They require you to pay immediately with a certified check 10% of the sale price. But sheriff's sales are an auction, which means I don't know exactly how much I'll bid on a property. But every kind of certified check I know of is one that you get from the bank and you have to know how much you want written on the check at that time. Seems like a catch-22. Help? [link] [comments] |
| Would you invest in our situation? Posted: 19 Jun 2020 02:50 PM PDT Here's the details: Combined yearly income around $80k. Our primary residence we owe $139k and could appraise easily around $220k+ (we bought last year @ $170k). We have $11k cash and over $50k in available lines of credit. Our market has gone HOT HOT HOT and properties are getting scooped up within days. One just came available, it's $56k and a 2/1. In fairly good shape from what I can tell, right in the middle of a desirable area in town. Thinking of buying it using VA benefits (we did conventional on primary home) and renting it around $700/m. There are NO sfh rentals in the whole county, they go super fast and the demand for housing is increasing. I'm a little nervous because we don't have huge cash reserves right now, would you go for it in our situation? FWIW I did residential property mgmt for 5+ years so I am very intimately comfortable with landlording. [link] [comments] |
| Asking for a percentage of the revenues Posted: 19 Jun 2020 03:01 AM PDT I recently purchased a commercial space that had significant vacancies because it wasn't run well. I filled up 35% of the vacancies in the beginning of the year before COVID 19 hit with going rates of about $2.50 per sq. ft nnn. Since March, understandably, I've had minimal traction in filling out the rest of the vacancies (about 25%). I received a couple of low offers for $1.5 per sq. ft. One of the offers I think the person is just trying to bottom fish to see if I'm desperate the other offer is a person that I don't think can afford to pay more. The good news for me is that the existing tenants are all doing well, and I'm fine financially w/o renting the empty space. I'm considering negotiating lower rates with new tenants in exchange for receiving a % of the revenue. For example, saying that they can pay a $1.5 per sq. ft for the first few years in exchange for giving me X% of the revenue, with the ability to change it back to "market" rent every year and not paying a percentage of the revenue, but they need to make that decision at the beginning of each year. How unusual is that? What are your thoughts? Any other creative ideas. Thank you in advance. [link] [comments] |
| Former Maricopa County Assessor Paul Petersen pleads guilty to fraud in adoption scheme case Posted: 19 Jun 2020 11:38 AM PDT I just happened to be working for the same Assessor's Office just when he got busted. I recently landed a 1st time home deal working with a non-profit organization in Tempe. I spent so much time and went through so many rejections with NACA only for the lender that was referred (by the non-profit organization Newtown) to offer me a conventional loan. The original draft included a DPA that really was a loan. Bottom line here is, how was Freddy Mac able to get away with buying my home days after I closed? [link] [comments] |
| Posted: 19 Jun 2020 07:47 AM PDT This is for those Real Estate attorneys or people who have experience with my question: My mother-in-law wants to partner with me on my next deal and wants to be a silent money partner in this deal. She has no plans on touching or looking at the property, she only wants to receive regular distributions in her account for her investment. She also does not want to appear on any loan, mortgage, or LLCs. She wants to be completely invisible essentially. I've already spoken to a RE attorney and he says this is over his head and doesnt understand the situation, i currently have scheduled meetings with other attorneys, but would love to hear from the infinite wisdom of my fellow BPers. How would I structure a LLC and distribute either monthly or quarterly to my mother-in-law? My original idea was to simply create a partnershup LLC with her as my partner. If i missed anything out let me know so I can provide that info. [link] [comments] |
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