Starting Out
Market News & Data
General Info
Real Estate Strategies
![](http://bpimg.biggerpockets.com/assets/forums/sponsors/hospitable-deef083b895516ce26951b0ca48cf8f170861d742d4a4cb6cf5d19396b5eaac6.png)
Landlording & Rental Properties
Real Estate Professionals
Financial, Tax, & Legal
![](http://bpimg.biggerpockets.com/assets/forums/sponsors/equity_trust-2bcce80d03411a9e99a3cbcf4201c034562e18a3fc6eecd3fd22ecd5350c3aa5.avif)
![](http://bpimg.biggerpockets.com/assets/forums/sponsors/equity_1031_exchange-96bbcda3f8ad2d724c0ac759709c7e295979badd52e428240d6eaad5c8eff385.avif)
Real Estate Classifieds
Reviews & Feedback
Updated almost 5 years ago on . Most recent reply
![BRIAN CUBERO's profile image](https://bpimg.biggerpockets.com/no_overlay/uploads/social_user/user_avatar/1426491/1621512191-avatar-brianc539.jpg?twic=v1/output=image/crop=1597x1597@0x689/cover=128x128&v=2)
First step to Financial Freedom!
Hello BP world!
First time investor here and excited to take the first step towards financial freedom! My name is Brian & I’m currently looking to buy my first property.
My deadline for this goal is June 1st of this year. Since last June of 2019 I have been 100% committed to my real estate investing “education”. Obsessed is probably more accurate. I’ve spent what feels like hundreds of hours every evening after work watching/listening to just about every BP podcast episode and reading the books put out by @David Greene & @Branden Turner. I certainly don’t know it all, but feeling like I know enough to jump and figure out the rest as I go.
As a first time investor, I have a ton of questions, as you could imagine. My most pressing questions are about initial financing and the refinancing of the property.
I dont have any potential private lenders at the moment, so I’d either be paying cash for the property (assuming I can be all in for under 55k). I can also use a hard money lender to finance the property.
My first question is will the lender require skin in the game or is the asking price, rehab, closing costs covered by the lender? Not clear on how that works. Do I cover a percentage of everything? Do I cover the rehab & lender covers asking price? Any clarity on this is appreciated!
My second question is, has any one been able to work with a portfolio lender or credit union, put down 20% for initial loan, and then refinance with that very same bank after its rehabbed and appraised at new value?
Thanks for reading this long post!! Appreciate all your feedback in advance
For context, below is my search criteria for the first property
- Multi Fam (2-4 units)
- Exit Strategy - Brrrr & Hold for cashflow. Sell after 3-5 yrs and 1031 into larger multi fam
- All in for 50/55k (including down payment, rehab, closing costs, holding costs)
Most Popular Reply
![Tim Swierczek's profile image](https://bpimg.biggerpockets.com/no_overlay/uploads/social_user/user_avatar/618350/1621493924-avatar-timswierczek.jpg?twic=v1/output=image/cover=128x128&v=2)
@BRIAN CUBERO I haven't seen a duplex in the twin cities which would include Minneapolis and Saint Paul that would be a light rehab for 100-130K I would speculate that at even double those prices you are likely to see properties that need more than 10-15K. I like the MN market but not at that plan with those numbers. There is a way to make it work but you are likely looking at an acquisition price of $250+ in a C neighborhood with 10-15K in rehab or a B neighborhood with the same price but 40-60K in rehab.
One other thing to consider is that Conventional cash out guidelines require you have 70% loan to value on a multifamily property so if your ARV is $170K your max loan amount is $119K, assuming your refi has at least 5K in costs you would need to be all-in on the property at 115K or less including rehab to make your numbers work.
- Tim Swierczek
![business profile image](https://bpimg.biggerpockets.com/no_overlay/uploads/marketplace/business/profile_image/694/1712765105-company-avatar.jpg?twic=v1/output=image/contain=65x65)