All Forum Posts by: Alberto Leonard

I've listened to several podcasts, Biggerpockets and others concerning the BRRRR method. It's straightforward as long as your buy right. You can then rehab, rent, etc... What no one seems to shed a light on is how difficult it is to find refinancing for loan amounts under 100K. It seems many lenders pass on you or if you are lucky offer an extremely high interest rate no matter how financially sound you are on paper. My 1st rental was purchased with a conventional 30yr loan, not too much of an issue there, however I utilized a hard money lender for the purchase/rehab for my 2nd investment and it seems many lenders want nothing to do with you. Perhaps I missed it in one of the podcasts but nothing has come across expressing this type of issue. Its obvious now that the best play would have been to pay cash for the property, rehab then refinance or HELOC but its too late now.. Still on the hunt for a lender that can make it work or would even consider it. Luckily I have some time since I started the process early. Has or is anyone experiencing the same issue?

Quote from @Miguel Garcia:

Thank you @Alberto Leonard. Can you recommend any areas in Toledo to purchase a rental? right now I am looking at the Library Village area. However, I read a lot of good and bad regarding that location. I appreciate your help in advance. 

 I used Dave Poeppelmeier as my agent, very nice guy and very knowledgeable of the area.   He personally checks out the properties you are interested in and gives you his take of the property and the area.  Toledo can be tricky to navigate.  He also works for LaPlante and an investor.  I personally like the University of Toledo area for student housing, which is his bread and butter.   Unfortunately my timing was off so it wasn't beneficial for me at that time.  I plan to return in the future and acquire a property there.  I ended up with a home in the 43613 area code..  C class neighborhood and it's doing very well for me so far.  

Quote from @Miguel Garcia:

Quote from @Alberto Leonard:

Originally posted by @Kari Morales:

@Alberto Leonard did you ever find a property management company? If so, who did you end up going with? I am currently looking for a good PM in Toledo also.

I am finally about to close next week.  I selected LaPlante.  They seem to be reasonable and have good processes in place.  Hoping all goes well.  

@Alberto Leonard how is LaPlante performing ? Would you recommend them to me ? I need a property manager in Toledo Ohio. 

So far so good with LaPlante.   They have a great setup and can take care of most needs in-house.   They made it rent ready and I even had them install LVP on the 1st floor.  It came out great..  They were able to secure rents higher than what I expected.   The property is cashflowing very nicely.  

Quote from @Jeff Copeland:

Sent you a PM with some resources. 

Thank you..  I will check it out.

Hello everyone,

I've been searching the forums to find out how to utilize the BRRRR calculator when a hard money lender is involved but can't seem to find a straight forward answer. I would like to be able to enter all the important figures into the calculator so it can 1. spit out all the magical numbers I need to see if it really worth it and 2. create a report so I can present to the 2nd lender that may be potentially refinancing the home. Am I missing something or there just simply isn't a way to do it at the moment?

Originally posted by @Kari Morales:

@Alberto Leonard did you ever find a property management company? If so, who did you end up going with? I am currently looking for a good PM in Toledo also.

I am finally about to close next week.  I selected LaPlante.  They seem to be reasonable and have good processes in place.  Hoping all goes well.  

Originally posted by @Toni Hogan:

Originally posted by @Alberto Leonard:

Originally posted by @Toni Hogan:

Originally posted by @Jonathan Pavkov:

Originally posted by @Alberto Leonard:

Complete newbie here.. I have a good understanding of how a HELOC and HEL works, however, I have no clue what are the steps to take once the funds are secured. With a conventional loan the lender takes charge of doing all the services such as title search, title endorsements, etc. How is it handled when to the seller its basically a cash deal?

I did exactly this same thing earlier this year - used a HELOC to purchase a duplex in cash. The Title Co. handles your search, etc. I have some title companies I can send you as a reference.

Did you refinance out of your HELOC into a traditional mortgage? I too am looking to use a HELOC on my SFH in California to purchase a rental property in Ohio. My biggest concern is getting out of the HELOC into a traditional mortgage. Does anyone have any experience with that?

I changed my strategy a bit. I took out the HELOC but used a portion of it as the down and another portion for any necessary rehab work but took out a traditional mortgage for the balance of the purchase price. Whatever is left will be used for a 2nd investment. Still deciding which market to jump into. If all goes well, I will BRRRR so I can continue to grow my portfolio.

@alberto Leonard thanks for the reply! Just so I understand correctly, you'll now have two payments on the peoperty; the first for the HELOC and the second for the traditional mortgage? What do you collect for rent for the property if I may ask? Are you still able to cash flow on the property with that strategy?

I am currently still under contract. I have not closed on the house yet, but yes I'll have 2 payments for a short time. Once I BRRRR I should be able to payoff the HELOC and only have the traditional mortgage left. Of course keep in mind that I'm a newbie so this is what I'm calculating. Cashflow might not be huge but definitely good enough for my goals.. Once I continue to scale and grow the portfolio then the cashflow will follow as long as we make the right deals.

Originally posted by @Toni Hogan:

Originally posted by @Jonathan Pavkov:

Originally posted by @Alberto Leonard:

Complete newbie here.. I have a good understanding of how a HELOC and HEL works, however, I have no clue what are the steps to take once the funds are secured. With a conventional loan the lender takes charge of doing all the services such as title search, title endorsements, etc. How is it handled when to the seller its basically a cash deal?

I did exactly this same thing earlier this year - used a HELOC to purchase a duplex in cash. The Title Co. handles your search, etc. I have some title companies I can send you as a reference.

Did you refinance out of your HELOC into a traditional mortgage? I too am looking to use a HELOC on my SFH in California to purchase a rental property in Ohio. My biggest concern is getting out of the HELOC into a traditional mortgage. Does anyone have any experience with that?

I changed my strategy a bit. I took out the HELOC but used a portion of it as the down and another portion for any necessary rehab work but took out a traditional mortgage for the balance of the purchase price. Whatever is left will be used for a 2nd investment. Still deciding which market to jump into. If all goes well, I will BRRRR so I can continue to grow my portfolio.

LOL..  I certainly know it is not an easy task.  Earlier this year I went through a kitchen remodeling in my own home.   Finding one that I felt comfortable with at a reasonable price took a while..  It wasn't top notch work but was still very good quality for the price.  Feels like its going to be so much more difficult since I will be investing out of state.  Face to face interaction definitely played a part in my selection for the remodel.

I am currently in the process of searching for an investment home (SFH or small MFH) in the Toledo, OH area. I expect to find a home that will probably need some rehab work such as flooring, painting, minor bathroom and kitchen work and possibly siding so I can execute the BRRRR strategy. Looking to hear from those who have a contractor that has worked very well, insured and good quality at reasonable costs in general.