All Forum Posts by: Andrea Castor

 $13k is all W2 income. 

We do have cash to pay off the auto loan but it’s 2.9% so I wasn’t going to do it until this was completed. It definitely wouldn’t make sense to roll the van into this equity line at 7.5%

The land loan is $200k balance, on a 3/1 ARM with 1 year left at 5%. Again it really doesn't make sense to move this to a higher interest rate for a slightly lower payment.

The product we have done previously for many years is an equity line checkbook. It’s available when needed but we wouldn’t make payments till used. Minimum is $10k at a time. So it’s a great vehicle for short term. 

 Hard money may be where we have to turn next. It just seems silly to borrow at 10%+ when we should be able to use our money at 7.5%

 We did a cash out refinance of the 3 rentals around 2 years ago to get cash for the build. Not enough meat for that to make sense. 

We've been real estate investors very part time for about 15 years. Currently have 3 long term rentals with a commercial loan not in an LLC.

About 5 yrs ago we bought land. The plan was to sell our existing house, move into one of our rentals, use all the cash to build and then use the equity to invest in real estate again. 

Fast forward about 4.5 yrs and we’re living in the new build. Value conservatively $1.5M and we owe $200k on the land at 5%. We were aiming for a $900k equity line but finally got a local bank up to $750k. It would be a line of credit with a check book where you only draw when a deal comes up and pay on just that amount. That would allow us to pay cash for a property, rehab it and then get financing on it while paying back the equity line. 

But now we’re running into debt to income issues. This same bank approved our land loan with approx $9k gross per month, a $2,500 house payment and $3500 rental payment. Now income is around $13k gross per month, $2000 land payment, $1000 van payment (that we will pay off with cash when equity line is open), and $3400 rental payment. They have this at almost 80% debt to income…I assume with taxes and insurance but counting no rental income. 

Is there another avenue we should be looking at the use our equity? 

Our first plan is to convert space over our 4 car garage (approx 1200 sq ft) to an Airbnb space on our farm for about $80k which would generate $40k+ a year at 50% occupancy. We’re also working on a VW bus to Airbnb conversion and we have a 40x24 space in our barn plumbed and framed for a 3 bed/2 bath barndo Airbnb. 

@Carl Amko We won the auction on Dec17th, 2018. There was an issue though in that Wells Fargo (2nd mortgage) had sold it online for $33k. They were actually trying to sell it a 3rd time as well. So it went through litigation for several months. We finally were given the go ahead in late March. My husband did most of the work himself around working full time and having 4 kids in activities. I listed around mid July, had it completed july 30th and renters moved in Aug 1st. 

Investment Info:

Other fix & flip investment in Centerville.

Purchase price: $49,200
Cash invested: $15,000
Sale price: $87,500

2 bed, 1.5 bath condo

What made you interested in investing in this type of deal?

It was across the street from our first investment property

How did you find this deal and how did you negotiate it?

We had heard it was going to hit the MLS

How did you finance this deal?

20% down, 30 yr mortgage

How did you add value to the deal?

Complete gut

What was the outcome?

Rented for 2 yrs then sold

Lessons learned? Challenges?

PATIENCE! I should have waited for another set of good renters instead of selling.

Investment Info:

Other fix & flip investment in Washington Township.

Purchase price: $65,400
Cash invested: $12,000
Sale price: $101,000

2 bed, 1.5 bath condo

What made you interested in investing in this type of deal?

Our very first deal. We learned how to find renters, how to set up the renter/landlord relationship, etc.

How did you find this deal and how did you negotiate it?

My mom was a realtor at the time and said we had to buy it.

How did you finance this deal?

$12,000 down (20%), small bank at 5.5% for 30 yrs

How did you add value to the deal?

Nothing except toilets and a doorbell

What was the outcome?

Rented for $1050/mo for 6 yrs (only two different tenants) and sold when the market went back up.

Lessons learned? Challenges?

Hard to see the properties now selling for $120k

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Yes, Amy Faler!

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $83,600
Cash invested: $30,000

3 bedroom, 1.5 bathroom brick ranch 1201 sq ft

What made you interested in investing in this type of deal?

Our first time buying at county auction.

How did you find this deal and how did you negotiate it?

Property was offered at our county auction the Monday before Christmas. It was the only property being auctioned that day so only one other bidder.

How did you finance this deal?

Cash

How did you add value to the deal?

Complete gut including adding air conditioning

What was the outcome?

BRRR, pulled out $114,000 @ 4.125% for 30 yrs. (Pulling out 100% of funds, leaving $56k equity). Renting for $1400/mo.

Lessons learned? Challenges?

We had never purchased at auction before so lots of lessons learned with how to bid, how to deal with moving current owner out, etc.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

No

Investment Info:

Single-family residence buy & hold investment in Dayton.

Purchase price: $52,500
Cash invested: $25,000

3 bed, 1 bath 1080 sq ft brick ranch

What made you interested in investing in this type of deal?

Cash flow potential

How did you find this deal and how did you negotiate it?

Listing was listed in another town accidentally. My husband went to see it anyway knowing where it was. All original but we put in a low offer. The owner was going to a nursing home so took it.

How did you finance this deal?

Cash

How did you add value to the deal?

Inside needed new bathroom, new furnace, water heater, kitchen, flooring, paint. Outside eventually needed room, windows and driveway.

What was the outcome?

Just refinanced at $115,500, 30 yrs fixed @ 4.125%!

Lessons learned? Challenges?

This was our first rental in a more up and coming B- neighborhood. After many less desirable applications, we lowered our standards and spent a year starting the eviction process each month till the tenant paid. Learned how to not renew a lease and not return a deposit.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Yes, Amy Faler!

We have been part time investors in the Dayton, OH market since 2012. We bought our first sheriffs auction property this past Dec 2018. Despite is going to litigation for being sold multiple times, I would say overall it was a really good experience.