All Forum Posts by: Andrew Halbert

I called him out on his thread. He did not respond.  

His will ask you for money upfront before lending you anything...........

I'm in the same boat. I just used up my last loan from Freddie/Fannie.

Next step for me is evaluating my scenario with a lender on my ability to refinance after using private or HM.  

Going straight to HARD MONEY for your first rental is a bit aggressive I think.  Have you researched how to properly use hard money?  It's not typically used for long term buy and hold.  That being said you CAN use it for buy and hold, but there are specific strategies to that, mainly on the repayment side.  HM is very expensive and typically used for short term flips.  At 10-12% plus points you will have a hard time cash flowing using Hard Money.  

Why not use conventional loans?  You will eventually hit a ceiling when you can't, but what makes HM a good option for you at this point?

AT the end of the day you need to do what you feel comfortable with.  But realize that if you offer a crap product, you will get crap results. I'm not saying that not updating means it's crap, however I think things should be clean, safe and operational.  You are going to want to update things at some point.  I would think about it as sort of a property reset.  There is always a risk of tenants destroying things, it's the nature of this business.  Don't let that scare you.  The house will probably be a disaster, they'll likely treat it like crap after they find out you are not renewing their lease, be prepared, try not to get emmotional about it.  They may answer the rehab question for you.  you may have to do major re-hab.  

Random thoughts....

Don't over-improve

A few updates can go a long way to finding better quality tenants

Putting money into your property is the cost of doing business.  

What is your competitions product?  Are they renting out houses from the 70's as well?  Are they updated and getting higher rent? 

Like I said, you know your market better than anyone.  

Thank @Erin N.

Not even a year yet. 

@Edward B.

Thanks so much.  I've heard B2R mentioned before on BP.  This is great information. Far to often these strategies appear way to easy to me.  Not  a lot of people go into the actual risks involved.  Defining a strategy for creative finance is a lot harder than it looks.  I am pretty risk adverse right now, I'm not 25 and single anymore without kids. :)  So I have to be very careful not to over extend myself.  My limited experience with rehabbing is what I am most concerned with.  I have a couple opportunities right now to do some "face-lifts" on 2 properties.  I have one property under contract right now and have cash for a second.  My goal is to use my next two properties as "practice" learning about the rebab process, and finding a good contractor.  The property I have under contract right now is basically a paint, flooring, roof, and new counters rehab.  So enough to get my feet wet without major repairs. 

My lender is telling me that he cannot declare rental payments as income for two years. 

Thanks @Joe Villeneuve and @Brent Coombs

appreciate the insight