All Forum Posts by: Andrew Zannotti

Hello all:

I purchased my first duplex last month and my plan is to BRRRR it. I plan on going in and doing all of my renovations in July after the last tenant moves out for a value-add. I've heard mixed things about whether I have to wait 6 months or not to do a refinance. I'm just trying to see if there anybody that used hard money, and then refinanced in less than 6 months before I start calling every bank in a 50 mile square radius for no reason... PS, I set up an LLC to purchase the property as a requirement for my hard money lender, if possible I would like to keep the property in the LLC.

Thanks in Advance!

Andrew

@Adrian Fajardo Hard money because I'm doing renovations with plans to do a refi in November

@Jose L. Congratulations, on pulling the trigger. I just closed on a duplex in Killeen myself last week. I went with one that I can do value add on so I'm gonna try to BRRRR and refinance in November.

@derrickbiggs definitely. I'm in Oklahoma for another two weeks for training but when I get back if you and others wanna do a lunch or something to talk about stuff let I'm definitely down.

@James Wise well played sir, well played

@Derrick Biggs there was a post about a meet up in Waco a few months ago that you may be able to find in the archives. I'm out of Killeen about an hour away from Waco if you find one maybe we can meet up at it. I'm currently in the process of your first BRRRR now.

@Jeyo Punnakottil I just looked at your numbers and there are a few things I would take into account if it where me when analyzing this. If you're going to do 30K in repairs should you really need to budget 30% monthly to CAPEX and Maintenance, I would assume that's pretty high if you are doing alot of the repairs up front. Maybe I'm missing something about your market but why would you pay 318K for a house, do 30K in repairs only for the house to ARV at 350K and cash-flow $200 a month, if that's the actual case you may be able to find better investments that either give you more equity or higher cash-flow, preferably both. These are the two biggest things that stand out to me. Good luck on your journey.

Andrew

Hello All

I'm currently looking at two cheaper duplexes in a town I live in. Each duplex is listed for 45K and each unit rents for $450 a month and they are all currently occupied. Initially I am looking at putting in an all cash offer and using hard money to buy them originally with me putting 20% of my own money down plus closing costs. Over the next 6 months as the leases renew I plan on going in doing renovations and getting new tenants pending the leases not being renewed. I'd like to get thoughts on my numbers and advice on how to go about doing the refinance ultimately should the unit appraise at below 50K each after I clean them up. The numbers seem kinda to good to be true and I feel like I might be missing something. Any help advice is greatly appreciated.

Andrew   

House

Purchase Price $90,000 Total Price

Repairs$10,000 Rough Estimate

Mortgage $408 20% Down 5.5% APR when refinanced

Taxes $790 Pulled from county

HOA N/A

Rent$1,800 $450 per Unit

Property Management $180 10%

Maintenance $180 10%

Capital Expenditures $180 10%

Vacancy $180 10%

Cash Flow $672.00

Andrew

I'm in the process of still learning how to use hard money myself but it is likely you will run into a similar issue trying to use hard money if you have little in reserves. Using hard money you will only be able to leverage so much money upfront. What I have found so far is around 80% LTV and no more than 60% ARV for my first flip. If this holds true the max you will be able to borrow is 168K (80% LTV of Purchase price, obviously more if you have finance the repairs) to 189K (60% ARV). Either way in this scenario you will still have to come out of pocket at least 21K plus closing costs out of pocket on top of your monthly interest payments if you max out the 60% ARV by inflating your repair costs. Have you attempted an FHA 203K loan, this would allow you to finance cost and repairs with only 3.5% down.

Best of luck,

The other Andrew

@Chaise Carter I am just starting out but I would love to attend. Full disclaimer, I live in Oklahoma and won't be moving back to Texas until this summer. 

Andrew