All Forum Posts by: Allen McGlashing

@Jezelle John

I would add in $100/month for sewer/water in most cases the landlord has to pay this unless it’s metered separately. You need to consider the shape of the property, a lot of houses in Cleveland are older so the Cap ex and repairs budget might need to be higher. A 7% return is a basehit and for a new investor i think is worth it. You will learn so much from your first deal that is where your return really comes from. You will find and put systems in place and that will make your next deal even easier.

@Sean Chua

I would reach out to a local agent and PM to confirm the rents and run the comps. Luckily with this being your primary residence you can tap into up to 95% of your equity in a cash-out refinance which if by doing that you still cashflow would be wonderful. The deal looks good initially with a COC return of 13.33%. $500 pure cashflow is good.

@Kaybreh Mathis

You could go through a Hard Money Lender and get a bridge loan in which you finance the whole project 80%-90% of the purchase price and 100% of the rehab. Bridge loans are typically 6-12 month interest only payment loans and are meant to be cash-out refinanced afterwards. Once the property is completed you can take out a 30 year mortgage with the same HML and use the money from the cash-out refi to pay the bridge Loan off.

The other option is you can fund the whole project yourself with cash then once finished put a 30 year mortgage on it and take out 70%-80% LTV with a HML. The rates for a HML are higher than traditional bank financing, but not to high to where it's not worth using.

Feel free to contact me, I have some HMLs I have worked with and depending on the state your in they are worth checking out.

GOOD LUCK

@Jezelle John

Welcome to BP you have found the right place to learn endless amounts about real estate investing. 

The first thing I suggest to you for investing out of state is to read the book "Long Distance Real Estate Investing" by David Greene it will give you a complete guide on how to do this. Find your area then reach out to an agent and get setup on the MLS. That will generate LEADS for you to look at and run numbers on the properties. If you find a Rockstar agent that has experience with out of state investors they likely have the people in place for each step. They can refer you to contractors, property managers, inspectors.

Feel free to contact me if you have any questions I’m here to help as a fellow investor that is probably going through or been through what you are.

@Victor Funes

If your conservative you'll likely lose less money if something goes wrong. I personally always like to be all in for 70% of the ARV to be sure cause in most cases you'll have unforeseen expenses. Also when you refi your cashflow would be higher at 70% as opposed to 75% and with cash flow being important to me 70% makes the cashflow that much more higher.

@Elmer Bonilla

Then Hard money makes the most sense. You get a interest only loan for 6-12 months and once you sell the home or cash-out refinance you pay the Hard money lender off. In my experience they are really easy to work with, close a lot faster then bank financing, and some fund 100% of the rehab. 
It sounds like the plan you have is perfect for hard money.

@Elmer Bonilla

What is the reason you are looking at HML as opposed to conventional financing? What is your end goal for this property?

If you can give a little more information maybe we can get a better idea on advice to give you. HML tend to have a little higher rates than conventional loans, but they are perfect for fix and flips, BRRRRs and people with high DTI that wouldn't qualify for a conventional mortgage.

@Eric Merritt

For your situation I would strongly consider getting a HELOC on your property in MI with interest only payments and NO prepayment penalty; also the longer draw period the better. With your goal being to flip houses, that would give you the immediate cash on hand you need to fund some deals with a lower monthly payment rather than the 30 year cash out refinance higher payment. The good thing about HELOCs are they are like credit cards you can draw on and pay them down when ever (in the draw period), so if you take on a HELOC with a 10 year draw period you have those funds for 10 years revolving. Then once you have enough capital just pay off the HELOC before the draw period is over.

Hope this helps GOOD-LUCK

@Alecia Loveless

What would be your goal here? To get approved for more money which having her on will most likely do that as long as she doesn’t have a lot of debt that comes along with her. Or are you just simply trying to get your spouse in the game with you?

I believe that if you and your spouse own an income producing property together it just counts as one income you don’t double that up. Someone please correct me if I’m wrong. 

The other thing that comes to mind is if you want to expand your portfolio to more than 10 properties the loophole is you can have 10 in each spouse’s name so that would give you 20 available properties you can get conventional bank financing for. Now if your spouse is on this property with you, that takes 1 away from her 10 properties which sounds like you already did on your primary home. That might not be your plan yo have that many, but just something to think about.

@Account Closed

Thanks for your insight although I didn't get a LLC for asset protection. I got the LLCs for financing reasons.