All Forum Posts by: AJ Exner

So if you are getting a gift of $100k, then you could use 50k on top of your 35k for the down payment + reserves. 

It depends on the lender, so giving them a heads up is good.

Most of the programs that I am aware of will allow you do utilize only 50% of whatever the 'gift' is. So if you provide a good letter of explanation, then you could do more than the 10% as long as it falls within the 50% of the gift funds. 

Happy to connect and talk through numbers if that would be helpful.

Good luck!

Hey Allen,

A lot of great opportunities in and around the Birmingham market, and really it becomes identifying the right neighborhoods and pockets of communities.

The margins can also be pretty thin. Find a good lending partner that is comfortable with lower property values both on the purchase, as well as knowing a group or two that can financing projects under 100k on a 30 year fixed. You won't run into too many with the quality housing, but there might be a few good Sec 8 homes that you get a good deal on and you want to be prepared.

Otherwise, pay special attention to the finishes you use as the quality of finishes can leverage an extra 10-20k in appraised value which can get you the financing/refi that you need.

Happy to connect and help where I can! Good luck!

Hey Jonah, 

Congrats on a good deal, to only need a few cosmetic touches and to get that nice little bounce in value is awesome.

And 7% is probably a pretty solid estimate (usually based on FICO) but I think the important question that you are asking is what is your long term strategy with it? If it is to cash flow right now, then you're right you would be a little tight with your tax/insurance escrows. But if it is long-term and to hang on to that property, then it does sound like a BRRR could be a good option.

A couple of things I would confirm,

1) Make sure that it isn't classified as 'rural' on an appraisal. That is a deal-killer for some groups and others will cut back leverage, so be prepared that way

2) Make sure it is with a lender that is licensed in ID, it has some different rules up there so confirming ahead of time would be good.

3) Include those monthly escrows into your monthly expense calculation, DSCR lenders do, so make sure you are on the same page

4) With that, make sure that the lender you work with will go down to 1.0 on their DSCR if it is going to be tight.

Good luck in your decision! Would be happy to connect and help if it would be beneficial

Hey Karolina,

I think we've got a few options for you, if you can shoot me a DM I would be happy to help. Should be doable with a good DSCR and a 780, full doc feels unnecessary.

Hey Duane,

Congrats on the work thus far! 8 in 24 months is no joke, especially chipping away one at a time, I'm sure it has come with plenty of teachable moments, but its awesome that you are able to ask the question of how to scale.

To start, a hard money lender that is only allowing you to do one at a time with your track record is... well... kind of silly. There are plenty of HMLs that would look at your 8 'exits' (whether you kept or sold) and put you on some kind of "Pro" category and help you leverage as much as possible to grow as quickly as possible. 

Just keep a good record of your SREO and hang onto the HUDs that you've had from both your purchase and your sales. Once you use those to establish your experience (along with appropriate LLC Operating Agreements to show involvement of owning LLC) then 2025 should send you to the moon!

Northern VA is such a great place to invest right now, a great sweet spot in value add properties + availability. The cost of entry is a bit higher compared to Detroit or Alabama, but the fact that you are grooving is awesome.

I would add to talk with your family to discuss the amount of leverage you are comfortable with as you start talking to these new HMLs. Many will promise high Loan to Costs and low, low down payments, but think about the Interest Rates and what you are comfortable with when it comes to giving up equity in a deal in order to do more deals. 

Congratulations again on what you've accomplished so far, good luck in the future and don't forget about us little guys when you've "made it". 

Hey Brandon, 

Some would require some reserves, or at least to show cash to close on any new deal.

Are you anticipating opening up a HELOC on your primary to get the cash needed to close? Even with HMLs, they would either want to see reserves, or you would still need to put in a little 'skin' into the game to make the deal work

Good luck!

Hey Brandon,

I actually have a client up there who might be helpful, just shot you a DM, would love to connect.

Good luck!

Quote from @Kylie A.:

Quote from @AJ Exner:

Quote from @Kylie A.:

Do any of you invest in rental properties, wholesale, or flips in small towns? I’d be looking for areas with major stores or ones that are close to a big city but not too far. I’m thinking a small town could be a great place for me to start compared to big cities. I’m considering either buying a rental since it’s cheaper or purchasing a flip if the market is booming enough. Anyone currently investing in small towns? Let me know your thoughts below

Hey Kylie,

VERY doable as long as you are cognizant on a few things. 

Most groups are fine as long as the actual appraisal doesn't state that its Rural (see example below for where it would be on an appraisal). Even towns of less than 10k, as long as it is in a "good part" of town and there is somewhat stable growth in that area, then most lenders will not add any additional underwriting guidelines, especially if it is rented out.

I always like to do the Walmart check (kind of what you recommended being by a store). If you can clearly define your buy box and be up front with any program you go with, then you should be ready to go!

Good luck! Happy to recommend and help however I can.

 if its rural is it hard to get lending or something I'm confused, I'm new to this so rn I'm learning 

It can be. There are lenders that "specialize" a bit more into those kind of areas, but from the eyes of a lender, what could happen is that they see 'rural' as a sign that you might struggle finding tenants down the road. So they often will reduce the leverage of the loan (getting 65% instead of 75%) or deny it (which isn't as likely). 

Hey Kylie,

VERY doable as long as you are cognizant on a few things. 

Most groups are fine as long as the actual appraisal doesn't state that its Rural (see example below for where it would be on an appraisal). Even towns of less than 10k, as long as it is in a "good part" of town and there is somewhat stable growth in that area, then most lenders will not add any additional underwriting guidelines, especially if it is rented out.

I always like to do the Walmart check (kind of what you recommended being by a store). If you can clearly define your buy box and be up front with any program you go with, then you should be ready to go!

Good luck! Happy to recommend and help however I can.