All Forum Posts by: Alexander Flores

@Ben Langebartels welcome to the forum!

So some more information is required.

Closing costs for only $300, I would say they might be a little higher even if you're paying all cash.

You said you are subbing out all of the work and have $7,000 for repairs. The property says it needs a new roof, I would say the new roof will be at least $4,000 and could be higher. If the rest of the property is in pristine condition then you might be good for $7,000. If the kitchen needs replaced too then you will be at your $7,000 quick.

Do you or any of your partners have rehab experience or did you have a GC walk the property to get to your $7,000 number?

If the ARV is only $38,000 and you're all in with your current numbers is only a couple hundred less, know that you will have a nice chunk of change in the property even if you do a refi down the road.

Anyways, still a good property from the calculations you provided, just make sure the calculations are correct!

I wish my area had properties that low, a 3 and 1 that needs $7k in repairs is at least $100k!

@Kevin Christensen This is what we do for rental properties on SFH. Works perfect, just have to make sure your numbers are good. HML are a great way to start if you have lower funds or if you want to leverage but can't find private money.

https://www.state.nj.us/treasury/revenue/gettingregistered.shtml

@Teague Anderson

I am not a lender or anything, just a regular person but in my experience yeah it is all a numbers game.

In my experience that 20k of rehab costs must be prepaid into the loan to appear on the HUD. We use hard money so they reimburse us for rehab costs once they are completed from an escrow account. We pay for the rehab costs upfront.

Depending on who you refinance with you will need the property to appraise for whatever their LTV requirement may be.

On our first rental, we could only get 70% LTV since I did not shop around and had no idea what I was doing.

The whole idea of getting your HUD loan amount as high as possible is so that you can refi ASAP and not wait the standard 6 month waiting period for a cash-out refinance. Best to speak with a lender in your area to confirm.

@Teairra Ritman

I would call around and there will be a ton of brokers looking to hire you before you even finish the class. I am in Ocean County and just signed with my broker today, passed the exam a couple weeks ago.

Call around because I had numerous broker's who was going to sponsor me to take the class with no obligation to work for them, I don't see how no broker will talk to you when you're taking the course.

My course had 25 students and I am pretty sure only about 4 or 5 didn't know where they were going broker wise if they passed the state exam.

@Adam Shelley HML is a hard money lender. They give you x% of purchase price and x% of the rehab costs to buy properties to flip or rent out. They come with higher interest rates and charge more points than other lenders so you just have to do the deal right. I remember that episode. As I was listening I was like damn I did that by accident haha

@Leo Poon The HUD is the final amount on the loan from the closing disclosure. So we use a HML for our deals, so our loan amount and rehab costs are combined into our final loan amount on the closing disclosure.

This would probably be a case by case basis for the second question on a pre-payment penalty. When you deal with any type of lending, there can be anything written in the contract.

From my experience we have been able to cash out refi after 6 months of seasoning.

Other option we have found is to refi up to the HUD amount after a month or so of the rental being rented.

Look at taking a HELOC out on the rentals.

There is definitely a way to get the refi after having them for a year.

@Nestor Rosero Also if the purchase price is 145k and ARV comes in at the 200k, you won't be able to cash out refi to get your money out. Even if you get 75% LTV then you'll get 150k which will most likely be less than your 145k purchase price plus closing costs. Any rehab costs would put more of your money in the property which is against your plan of refi your money out for another deal. Just something to think about, especially with the NJ market as a whole leveling out currently and it's going into the slow season for sales.