All Forum Posts by: Amanda Scully

Hello Everyone! 

I'll try and be quick and to the point: I am ready to start looking for my first deal. I have literally no money of my own so I have obtained a capital loan through a combo of business and personal credit (to cover down payment, closing costs, and potential rehab), as well as plan to use a HML for the purchase price (I will most likely get 100% financing for the rehab as well, so won't have to use the credit for that, but rather just the down payment and closing costs). Just curious of a few things:

1. Has anyone else done this as well and what was your experience?

2. What kind of deal did you do first? Fix and flip or buy and hold rental? (Or do you recommend one over the other?)

3. How do you manage to make payments on the capital loan (credit), as well as the hard money loan, while still in the rehab process and before you've (hopefully!) made your money?

I don't know if I'm overcomplicating things, but here is what I really don't understand...if I purchase a property and rehab it to either BRRRR or flip, and I have no money in the bank, how am I making payments to my HML as well as on the balance of line of credit I used to gain the capital to get started, while the job is still in progress and I haven't made any money yet (through flip profit, refinance, cash flow, etc.)? Am I missing something here? I imagine that as soon as you take out the loans (both HML and line of credit), you have to start making payments in the next month - these are part of the holding costs, right? But where is the money coming from? I'm so confused. Thanks in advance!

@Fredie Robinson Thank you for your response! I DEFINITELY have both the drive and the hustle, I have three small children to support and I currently work full time as a teacher in NJ...it's very expensive to live here and I simply don't make enough, so RIE it is to gain financial as well as time wealth to be with my boys more. I am planning to use a hard money lender but I also took out a line of business/personal credit to finance my capital for a down payment, and I am trying to map out my plan of how to make payments on that before I actually make any money in all of this...essentially I would be able to pull money out in a cash advance, but then I will be left with a balance like a credit card. Have you had to manage a situation like that before? And if so, do you have any insight as to how I would go about that?

I guess my other concern is, when it comes to running numbers, being that I'm brand new at this, I know NOTHING about the cost of a rehab. So I am unclear as to how I would include that portion of the estimate in my analysis. I don't want to guess and think I'm making a smart move, and then find out I undershot it and end up either breaking even or, yikes, even losing money! I'm assuming costs vary from state to state, so I do plan to talk to people in my area about this topic. But also reaching out to anyone and everyone for insight. Thanks again!

Hi! This is amazing! You seemed to move so quickly, I hope my REI career is similar! One thing I'm curious about is hiring contractors and estimating rehab costs: do you have them come out to the property beforehand and give you an estimate you can then analyze the deal and see if the numbers work? Or do you just put in offers, close on homes, and THEN go to the contractor and hope it works out?

Also, how do you finance your holding costs during reno? I'm starting out with no money except for my loan for capital which will go towards down payment, closing costs, holding costs, and maybe rehab on my first property. But what I can't seem to wrap my head around is how I'm supposed to pay back THAT loan while I don't yet have any money coming in or haven't flipped the house yet and recovered my inital investment. I don't understand how that all works..

@Mary K. I just recently stumbled across an investment podcast geared towards women called "The Real Estate InvestHER Podcast". Check it out! 

I have a question about finances and using a line of credit to get your initial capital. I'm feeling overwhelmed and not understanding how you manage making payments on that loan while still in the process of rehabbing your first property. I have no money! So I had to get creative and a lender connected me with a company that provides startup loans...essentially it's a line of credit that you can take a cash advance out of with no fees, and use as your capital for whatever you need (down payment, closing costs, rehab, etc.) But what I'm not able to understand is how I manage to make monthly payments on the balance while my rehab is still going on and my property isn't sold yet or refinanced...thank you!

Thank you SO much @Romeo E. I appreciate you taking the time to answer my questions. I would love to give you a buzz later this afternoon or over the weekend, if possible, to discuss further. Thanks again!

Hi All, 

I'm a new wanna-be investor in the Essex County, NJ area. I have already purchased my first rental property and am currently house-hacking for just over a year. My husband and I are ready to get the ball rolling and start investing in buy and hold rentals, and while we've been listening to the podcast and reading articles/books, blogs, etc. for a few years now, we still have SO many questions. There's such a wealth of info out there, and so many different paths you can take, that we're feeling a bit overwhelmed as to how/where to begin. 

1. What are some suggested profitable markets in NJ or a reasonable distance out of state (2-3 hours)?

2. How are you managing finances? (It's overwhelming to think of cash flow coming in from multiple properties [eventually] and paying different lenders, setting aside money for eventual repairs, vacancies, cap ex, etc., as well as thinking about how to manage initial capital and hard money loans that we may use to get started. How do you do it? What's your strategy? How much of your refinance profits do you use to pay down initial loans and how much do you reserve to roll into a new property? FYI we're settled on the BRRRR strategy, for now...)

3. What's the actual pre-purchase process? How do you coordinate, once you've located a potential deal, having a realtor (or appraiser?) assess the potential ARV and having a contractor provide an estimate prior to making an offer? (I feel like I've heard so much about what to do, but not as much about the logistics of "how" to do it, and that's where I'm looking for clarification/guidance...)

4. Are you using contractors or DIY?

Thanks in advance! 

Amanda Scully