All Forum Posts by: Aaron Bard

It's an incredible deal: off market, with insane value-add potential, motivated sellers, under market asking price, and the ability to cashflow $2k+ after rehab. But I need $50k to close, and I can't seem to force myself to pass it up.

Maybe it's my pride, or thinking that I need to do everything on my own because I know that I trust myself; but the idea of partnering with someone on a deal has never piqued my interest. I've always wanted to do everything myself.

But maybe it's time...to search for a partner.

If I want to close this deal, it's what I need. And that's just how it is.

Now if anybody has tips on finding a good partner to invest with, please throw it out there. Anything is appreciated.

Thanks BP Fam!

How much cash do you need to close?

$50k

0 Votes

Quote from @Jon K.:

If it’s that good of a deal, hard money lenders would line up to fund it. There’s more to this story.

Finding a hard money lender to fund on this was the easy part. The part that I'm struggling with is coming up with the cash to close.

0 Votes

Quote from @Josh Cousineau:

Quote from @Robert Gallant:

I am looking for interested investors in the Maine market. I'm in the Bangor area with a large number of opportunities. I have been putting my team together and have a vast knowledge of the surrounding area. As a former fire inspector for the City of Old Town fire department, I have a handle on fire codes and possible code violations.

I have a hard money lender who could work with you if you are looking for one. Or are you just looking for a number of smaller investors? I also have a guy up that way that has some connection to $ if you want me to connect you with him.

Josh

I have a deal currently that I could use some of these resources on! I'd really appreciate it!

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Portland, Maine

Quote from @Bethany Turon:

Quote from @Robert Gallant:

Connect with me if you're in need of a private lender, I have a solid one I can refer you to. Good terms.

Just wondering if you still have that private lender referal!

0 Votes

Portland, Maine

Quote from @Matthew Crivelli:

@Robert Gallant

Bangor / Brewer market is good. Lots of comps, it should be fairly easy to utilize private financing if you are sticking with 1-4 family purchases. We would be happy to help!

I'm looking for this same thing for a deal currently in my pipeline. Would love to connect!

0 Votes

Portland, Maine

For anyone who has read my last few posts; I've been struggling with finding funding for a deal in my pipeline.

But maybe it's time...to search for a partner.

If I want to close this deal, it's what I need. And that's just how it is.

Now if anybody has tips on finding a good partner to invest with, please throw it out there. Anything is appreciated.

Thanks BP Fam!

1 Vote

Quote from @Nicholas L.:

@Aaron Bard

makes sense. do you know roughly what the rehab budget would be? let's use round numbers.

say you could get it for $175K and the rehab budget is $50K. so that's $225K - say you borrow 90% of that, so you need $22,500 down which you use your HELOC for, and you borrow $202,500.

this is where the interest and fees and whatnot start to add up. hard money is expensive - you'll probably pay 3-4 points for that loan. so that's $6-8K right there + closing costs. then you'll have the interest-only payments on the HM loan + the interest only payments on your HELOC while you're rehabbing every month - maybe $2500? then you go to refinance - and you need to pay back the HM loan + the HELOC + cover all the carrying costs and interest.

Okay...that definitely gives me something to think about. Thanks!

0 Votes

Portland, Maine

Quote from @Nicholas L.:

@Aaron Bard

there's probably another post on this topic i haven't read.

but... do the math. you would need to significantly boost the ARV of the duplex in order to refinance it and pay off debt. not 10%... not 25%... more like a 75 or 100% increase from purchase price usually.

and as others have said you don't want to buy it with a DSCR loan - you want to buy it with hard money / bridge money and then refinance into a DSCR loan.

using a HELOC for the down payment just puts tremendous pressure on you to boost the value. if the appraisal is low now you're stuck paying the HELOC back yourself. not the end of the world, but paying off HELOCs with our own cash / savings is not why we invest in real estate.

Okay noted.

Here's a few extra details:

The asking price is $200k (which I hope to talk them down further if my lender gives me the go ahead) and the zestimate listed on Zillow is $211k.

This property is owned free and clear so I know for a fact that there hasn't been an appraiser through there recently. For sale comps within a mile of the property have every 2-3 unit listed at $280-$350k.

My 3-Unit house hack is about a mile and a half from this property, it's a 150 year old building with a slate roof, and it appraised for $310k. This property is about 50 years newer, and has all modern utility upgrades. That being said; depending on the market within the next year, I believe that I could pull a $300k+ appraisal with the rehab of the 3rd unit.

Let me know your thoughts!

thanks man!

0 Votes

Portland, Maine

Quote from @Brittany Minocchi:

Quote from @Aaron Bard:

Quote from @Brittany Minocchi:

Quote from @Aaron Bard:

Quote from @Brittany Minocchi:

@Aaron Bard Bridges don't TYPICALLY have a prepay if you go with something like a 6-12 month term, so you can refi at any point within that timeframe. Now if you went with a longer bridge term, I have seen 6 month prepays on those.

Okay that makes sense. Thanks for your help!

No problem! Feel free to reach out if you have any other questions.

Also worth noting...I don't know that I'd say DSCR rates are insane. Depending on the loan amount, LTV, your FICO, length of PPP, etc I'd guess that you'd end up in the high 7s - low/mid 8s for a 3-unit property. Bridge rates will be higher, usually 10%+.

Right, but it would be less than a year until I refinanced out of the bridge loan so the interest rate would be negligible at that point. Am I correct there?

The payments you make during the term of the bridge are usually interest-only, so since you aren't making a typical PITI(A) payment and the term is shorter, the higher interest rate might not "hurt" as much. Just wanted to give you an idea of what to expect between bridge and DSCR :)

Thank you! This has been super helpful! Going to run it all past my lender now!

0 Votes

Portland, Maine

Quote from @Brittany Minocchi:

Quote from @Aaron Bard:

Quote from @Brittany Minocchi:

Okay that makes sense. Thanks for your help!

No problem! Feel free to reach out if you have any other questions.

Right, but it would be less than a year until I refinanced out of the bridge loan so the interest rate would be negligible at that point. Am I correct there?

0 Votes

Portland, Maine

All Forum Posts by: Aaron Bard

Aaron Bard has started 24 posts and replied 71 times.

Post: I think it's time...

Post: I think it's time...

Post: Hard Money for flipping projects

Post: Hard Money for flipping projects

Post: Hard Money for flipping projects

Post: I think it's time...

Post: Taking a look at different financing options...

Post: Taking a look at different financing options...

Post: Taking a look at different financing options...

Post: Taking a look at different financing options...