All Forum Posts by: Andrew Barlow

@Rob Bergeron can you send that to me?

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $78,000
Cash invested: $25,000

I bought this property as a HUD foreclosure for 78k. I immediately put about 3k into it just to get it rentable and starting renting it for $1,200/mo. After 3 years of renting I put about 22k into a rehab, putting me all in at $103,000. The house currently rents for $1,450/mo, appraises at $144,000, and I am doing a cash-out refi to pull out $108,000.

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

I was thinking about investing, and I saw this house around the corner from my. I made and offer, and that was it.

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

I saw a sign in the front yard. I found out it was a HUD foreclosure. They were asking 85k, I offered 78k, and they accepted.

How did you finance this deal?

I did a cash-out refi on my personal home

How did you add value to the deal?

I did a total rehab.

What was the outcome?

I was able to BRRR it and get $5,000 more than I invested into it and it rents for $1,450/mo.

Lessons learned? Challenges?

I knew absolutely nothing about working with contractors, estimating repairs, or property management. I also learned that I need to stop trying to do the work myself. You never ultimately save money that way.

Congrats on your first deal! I'm a little bit confused about your strategy. If you plan to buy it in one of your own names, then I'm not sure I understand the purpose of the LLC. Typically when two people start an LLC, they form a partnership. And when they buy houses, it is the LLC that buys the houses. So each partner might be 50-50 cash contributors to the LLC, but when it comes time to buy the house, it is the LLC that buys the house. If your desire is to buy it in one of your own names, and just have the other person be a Cash contributor to the deal, then The LLC seems pointless. I personally would not recommend this strategy. But admittedly, I am not an expert. But if you do go this route, I would speak with a lawyer and figure out if there is any way for the partner whose name is not on the deed to be legally ensured their share of the deal. And I would make sure that the person whose name is on the deed get some form of umbrella insurance for liability. Some other drawbacks I can see is that the person whose name is on the deed gets all of the tax benefits of depreciation, while the other partner gets none of those.

Kris Hayden at Republic would be another good contact.

So who did you go with? What were the terms? Rates? etc? Thanks for sharing...I'm about to do a cash-out refi on one of my properties.

Jay Leisten just curious, who did you end up going with the cash out refi? What was your experience like?

Jeff Dulla thanks for the response Jeff! One thing I'm still unclear on is the amount of loans you can have when you buy properties together. In the scenario that I've proposed, could my partner and I potentially get up to 20 loans total, since each individual can get up to 10 loans? Or, since we are buying together, does that mean we could only get 10 loans total? Thanks!

@Dave Van Horn Okay. So my partner and I may have gotten off on the wrong foot. We formed an LLC partnership, but soon realized that no lender would give our LLC a conventional 30 yr loan. So if we just scrap the LLC, and purchase properties together, we can get 30 year conventional loans?

Also, if you do that, how does that work with the amount of loans you can get? I know individuals can get between 4-10 conventional loans. Would this still apply? 

Is there any way for two people (or two families) to invest in a rental property and get conventional financing?

@William R. I am about to close on a BRRRR just south of Churchill Downs. Are you focused on that area?