All Forum Posts by: Allan A Ramirez

In David Green's book the " BRRRR " method he provides an example of two different guys that acquired properties, Tom and Mike. Tom saved up the same amount of money every year to purchase one property that didn't need too many repairs, he didn't consider his equity in any of them only his cash flow. Mike saves up $84,000 every two years to purchase a new property and fix it up taking into consideration his equity in each deal. David Greene provides an example of how Mike's portfolio will grow over 15 years the example is the following,

Year One: Nothing 

Year Two: Three Homes 

Year Three: Three Homes

Year Four: Four Homes 

Year Five: Four Homes

Year Six: Five Homes

Year Seven: Five Homes

Year Eight: Six Homes

Year Nine: Six Homes

Year Ten: Seven Homes

Year Eleven: Seven Homes

Year Twelve: Eight Homes

Year Thirteen: Eight Homes

Year Fourteen: Nine Homes

Year Fifteen: Nine Homes 

Total: 84 Homes 

Could somebody care to explain this to me, I know Mike will buy a new property that he will be able to start borrowing against every two years, but I also know that he can buy three homes in one year with the same principle he invested in every first home? Thanks. 

If a private lender is giving a loan for a home you want to purchase can they put a lien on that property? 

So when you refinance and get a bigger loan because of a higher LTV it makes sense to reinvest because more properties just means more income and especially when you've renovated those properties because it gives you a chance to raise rents. Even though you're accumulating more loans your also accumulating more assets to pay them off. Cool point! @Jason Wray

When you buy a rental with a bank loan, do renovations, and then get a cash out refinance I’ve heard that you typically get all your money back. Does a cash out refi mean you pay down the original loan and have the potential to get back the money you put for a down payment in the original loan and repairs to ONLY go invest in another deal? Because either way any extra money that you take out from the cash out refi you still have to pay back, correct? Thank you to anyone who can stop by and clear me of this doubt. 

Forgot to come back and thank you guys!  @Scott M.@Peter Philando@David Rogers

Hello, I have a question, let’s say you’re looking at a multi-unit and the seller agrees to an MLO(master lease option) for three years at an option to buy for $400,000. At the end of three years, because of your repairs and management of the property, the home appraises for $800,000. Will a conventional loan be for 75% of the sales price or the appraised value? That’s it, thank you to anyone who can answer this!) 

Hello, I have a question about when expenses are paid by the investor and when expenses are paid by the tenants. Expenses such as water, sewer, garbage, gas, electricity, lawn care, etc. What governs over who is responsible of paying these? 

Isn’t the appraisal enough collateral for the refinance? The old mortgage was $100,000 plus 2 points ($2,000) and 11% interest, I’m guessing for one year (only one time) it doesn’t say,  which is $11,000. So the old mortgage was $113,000(the amount Rich had to pay his friend). After two months of fixing the property the home appraises to $155,000. To pay off the old mortgage with a new one, and let’s not forget Rich also had $5,000 left to spare, Rich would need roughly a 76% loan to value after the appraisal. Correct? Now are you saying that for personal loans because they are willing to go over the normal conventional 70% loan to value ratio the collateral in the house won’t cut it? Now I understand, this would mean the investor needs to show some other source of security that guarantees your personal lender a win or break even on their money. Awesome thank you so much! Correct me if I’m wrong please! @Rich Hupper

Awesome thank you so much Luke! Starting to get the hang of these forums haha! 

I have a question for anybody willing to help me relating to Brandon Turner’s book ( How to invest in Real Estate with No and Low money down). Rich gets a short term $75,000 loan from his friend to purchase a property and another $25,000 for repairs. They negotiated terms for 11 percent interest and 2 points. Two months later the property appraises for $155,000. Rich refinances and pays his friend his principal, interest, and points. On top of that Rich pockets $5,000. Rich keeps this property as a rental making a monthly cash flow of $400. Here are my questions: 

Did the home appreciate to $155,000, or original value plus $155,000? 

How does the refinance affect the deal? (This is what I believe) He took out a new loan paying back the principal, interest, and points, this new loan was greater because of the new appraisal of the property, after paying back his friend he also ended with $5,000 he can either put back towards the new mortgage or use for whatever he needs? Is this right? Now Rich has a rental property profiting $400 in cash flow he is using to pay off that mortgage. Correct? Thank you so much to anybody who can stop by and answer this! 🙏🏼