All Forum Posts by: Amaf J.

@James Maher, apologies on my end, that difference can completely change everything. Well ABOVE would be the correct wording. 

@Joe Villeneuve, does the seasoning period affect the amount of properties this process can be applied to?

Hello everyone,

Just looking for a little direction on where I can research this topic some more. I'm currently working with two (2) other investors who want to break into real estate. I need your advice on how one would structure a deal or LLC in this scenario.

Let's say, all parties put an equal amount into the company at the start. But majority of the work and research is being done by one individual, another individual will be doing about half of the work and research and the last investor will most likely be passive in this. How does one structure the company based on the amount of work being put into the development of the company? I'm sure in the future that more private investors will be funding a lot of the deals but I would hate for the individual putting in the most work to be diluted out of the deals. 

Any advice would be helpful, thank you!

@Darren Budahn, have you ever thought of using this same strategy but with the help of a hard money lender for the first half of the deal? Then re-financing it after the rehab with a rate and term loan?

@Darren Budahn, you're the man, thanks for the information. Is this similar to the same strategy you use?

Am I getting the full $60,000 or just the difference in the deal between the cash put up-front and the loan-to-value amount? 

@Darren Budahn, do all banks require a seasoning period? I really need to ask the bank to see if this is required. But based on the numbers, what do you think? I'm trying to get them as tight as possible to avoid losing money on this deal.

@James Maher, please clarify, I'm definitely getting confused. If I'm all in at $47,000 but the bank covers $60,000, then it seems as if it would be beneficial for me, right? And if I refinance, can I pull out the full $60,000 to use towards the next property or just the difference between cash I put in and the amount the bank covers?

Hello everyone,

I have a quick question based on a scenario that I'm going through right now and I was looking for some help.

I'm working with a local investor in the area that purchases homes for other investors. He found a property for $33,000 in distressed condition. It's going to take about $14,000 in repairs to fix it up to get rental ready. After repairing the single family house, it will rent for around $1,100 a month. So we're looking at $47,000 all in with repairs and the comp's are showing the houses in the area selling for around $75,000. 

The investor knows a local bank that provides commercial blanket loans for portfolios on a 20-year loan. They give 80% of the assessed value of the home after the repair.

Now if I use all cash and leverage re-financing after the repair, how does this all play out, number wise?

The bank gives 80% of the $75,000 which comes out to $60,000 which is well below what I have in it. It's about $13,000 profit or equity in the deal. Now do I have the ability to cash out that full $60,000? And just pay the mortgage on the $60,000? I'm trying to make this beneficial to use leverage after the repairs and use the funds towards another purchase. Any insight would help me out tremendously. 

Evening everyone,

This is just a quick question for all of you regarding closing costs. I was pre-qualified for a loan and we started running the numbers to see how much everything would come out to total. Let me know what you guys think about this:

Example, $100,000 purchase, 25% down-payment

Closing costs: $4,182

Pre-paid items: $5,260

Bank is saying they would need the down-payment + an additional $10,000 for closing costs and the other fees. Are these usual costs for every transaction? You're essentially spending another down-payment on closing costs and those other fees.

What do you think?