All Forum Posts by: Allan Rosso

@Alina Trigub,

Have you ever used a portfolio lender or a type of bridge loan that you would necessarily recommend looking into?

As far as a HELOC, neither of our properties (there's 3 between the two of us) have enough equity for that, but I definitely plan on using that someday!

@James C., so when you say put each under contract separately and make them assignable, how would I do that? Is that something my real estate agent would be able to write? Or would I have to get an attorney to do so? 

We have already started a breakdown to provide them that shows why we wouldn't able to offer them more than $65 on the SFH. Our real estate agent, and hopefully a contractor, are going to walk the house as well and see what else they can find. We haven't gotten into the duplexes yet, as they have tenants, but we plan on trying to do so within the next week (we only found this portfolio Friday, but we want to act fast!).

As far as solid ARV's, were going to have our real estate agent give us those. He's been selling houses in this area for 19 years, so I trust he'll give us solid numbers. What's a PSF calculation? I tried googling it, but nothing I found made sense.

So I'll be the first to admit, I wasn't very optimistic about driving for dollars actually working. However, my partner and I are committed to making our REI business work, so we gave it a shot. One driving for dollars session later, and we stumbled upon a small off the market portfolio that has potential to snowball our business and really get us going!

We made a list of vacant, pre-foreclosures (had Zillow open as we drove), and for sale by owner homes. Once back in the office, we pulled any information possible prior to cold calling and went to work. A quick inquiry into the county website showed that the owner of one of the for sale by owner homes also owned 4 duplexes, and better yet, he had owned them for almost 20 years: "potential for a portfolio full of equity" jumped out at us!

We gave the phone number that had been listed on the for sale by owner sign a call. It turns out, the owner of these properties recently passed away, and his 5 children were trying to sell everything and not have to deal with it: extremely motivated sellers!

Now this is where we need to get creative; we want to flip the house (needs about $15k-$20k worth of work), wholesale 2 duplexes (these are in a part of town we had agreed we would try to stay away from as far as rentals), and hold on to the other 2 duplexes (all 4 have tenants).

I think it's safe to assume the two wholesale duplexes would be a different contract and transaction from the rest of the portfolio right? 

As far as the flip and two rentals, we would like to get a bridge loan that would allow us to finance the repairs (we are preapproved for a $150k interest only loan, so we'd have to go back and talk to our banker about this transaction and see if he'll work with us), then once the house is sold, use the profit to cover any expenses that come up when refinancing the duplexes into mortgages. 

What other options as far as bridge loans do we have for our particular situation? What about portfolio lenders?

Over the phone, the owner kept saying "the bottom line would be $85k a piece". We ran quick numbers and quick comparables after the phone call, and came up with $61/sq.ft for the house, which would mean selling it at around $110k (ARV). Considering the $15k-$20k needed in repairs for the house, we would have a max offer of $65k on the house. The duplexes, at $50/sq.ft., would be worth roughly $97k.

We're thinking of spreading out the $20k we need to drop across the three properties, so in their eyes we're only dropping about $7k per property (if we gave them full asking price for the duplexes of course), rather than trying to get them to drop one property by $20k. Should work right? 

We feel that there's a lot to consider, and a few different ways of making this work, we just don't know what kinds of questions to ask on here in order to come up with a feasible gameplan to FINANCE THIS WHOLE THING (our main concern).

Anyone with experience and advice, please advise us! Keep in mind, we've never wholesaled before, and we've never done any sort of portfolio transaction. Thank you!

@Brelyn Pyles I'm not saying going to school is a bad thing, but school takes up a lot of your time. It can become frustrating not being able to really focus on your REI business. I feel one thing you can really focus on while you're paying down your debt, is bringing your credit score back up. There are many strategic ways to do this, and you'll want to have your credit back up once its time to really start investing.

@Jerry Lundergard do you plan on financing the repairs? I don't think you can buy fix-er-uppers with a VA loan, because they won't finance repairs.

@Jared Sanderson I appreciate the information. I ended up applying last night because I really need to finish a deal around the end of the month. Your reply makes me feel better about deciding to go through them. Thank you!

I have looked into a company called SoFi that gives out personal loans. The goal is to close on a vacation rental in Mexico I'm currently under contract with. Does anyone have any experience with or feedback on this company? Or know someone who has used them in the past?

Thanks

@Andrew Schoenberg, I'm pretty new myself so no worries. My first BRRR deal was a VA owned foreclosure that was listed on the MLS. If I understand it correctly, the bank sends it to auction first, then they'll list it if they aren't able to sell at auction. I would probably start by asking a real estate agent if the home is listed. If not, call the attorney and let them know you're a new Real Estate Investor that's trying to learn the process, and inquire about the property. I'm sure they'll be able to tell you what part of the process the property is in, and may point you in the right direction as far as pursuing this particular deal.

@Claudian D. you can most definitely start investing while you have student loan. Financing eligibility comes down to a bigger picture (credit score, assets you can use to secure your loans, how much a bank is willing to work with you, etc.).

If you are starting from complete scratch, I would start by finding a local Investor friendly Real Estate agent (if they're investors themselves, even better!). I would use google to find a few, contact them, and go with the one you feel meets your personal needs and goals.

Next, find a small local bank or credit union, and talk to a loan officer about what type of investing you plan on getting started through (this will determine what kind of loan you'd be getting), and see what they would be able to do for you. For my first BRRRR deal, I did just that, and was pre-approved for an interest only loan before I had found my property. Having your money lined up ahead of time is HUGE when you find the right one, as you'll be able to make an offer instantly. You would just call your loan officer, and have them send you a preapproval letter for the amount you plan on offering.

My real estate agent is an investor himself, and he gave me a list of contractors that he personally uses. He's been doing this for 19 years, so I trusted his contractors, but I still shopped around a bit and compared pricing.

I hope this helps!

Allan 

@Andrew Schoenberg, definitely not a lost cause. If it's in pre-foreclosure, have you identified the current owner? Is the home scheduled to go to auction? Has it already been foreclosed and failed to sell at auction?

You can always contact the attorney and try to get these answers if you don't already have them.