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Updated about 8 years ago,

User Stats

61
Posts
15
Votes
Stephen Sawrie
  • Investor
  • Spanish Fort, AL
15
Votes |
61
Posts

questions about "smart leverage" method

Stephen Sawrie
  • Investor
  • Spanish Fort, AL
Posted

As usual, apologies for ignorant or overly basic questions, typos, etc...

so over the past year i have successfully converted a traditional ira over to a sd ira with checkbook control and have had good early success with cash purchase and rental of 5 single family dwellings. on the post-tax side i am am about to pull the trigger on my first leveraged investment property, also a sfd on which i have an executed contract and will close in a few weeks. i have wrapped my mind around the BRRRR method and its variants, in particular what i have seen referred to as the "smart leverage" method wherein i buy a distressed property, rehab, and refinance at 70% LTV, allowing me to recoup my money and, of course, repeat. my questions are as follows:

1. i plan on using a low 6 figure unsecured LOC for purchase and rehab up front. is it smarter to do the initial deal with downpayment or just buy it outright. the sale price and LOC amount will allow either. i plan on refinancing after rehab either way.

2.  is it still common for banks to require 6-12 months before refi?  i use a local bank and am fortunate enough to be in their wealth division, but how long does the typical bank continue to do acsh out refis before they cry uncle?

3.  anyone out there used quicken financing? wondering if that would be an option if and when the bank says enough with the refis.

4. how many notes can i hold at once. the properties will be in an LLC but i don't think that is relevant to the question (although i may be wrong). it is my understanding that one can only hold 10 mortgages at any given time? how are others accumulating > 10 units (please assume all sfd for now)? my insurance policies have recently been rolled into one commercial policy. is there something like that for mortgages?

any and all guidance would be greatly appreciated.