All Forum Posts by: Ankush Ratwani

@Chris Teti

That’s true, but there are ways to mitigate that. You can work with a lender or mortgage broker before the purchase to see if you the refi would go through with theoretical numbers or from my understanding a good lender/broker during the refi will not include the personal loan as long as it gets paid back immediately from the refi.

You could also use a personal loan like from SoFi or Lending Club. The combination of this and CC's might get you a down payment and more. 

Very good advice Whitney. I found out from my agent it is a matter on there end with one of the children trying to get more of the cut after the final purchase which is between the siblings and the probate attorney. I have decided to hold out for now to see if this will get settled within the next few weeks. I set up a good team with this deal having an infinite CoC upon refinance. 55k purchase, 26k rehab, ARV 120-130k, cash flow around $150. I hope to post this deal when its done as I learned a ton and hope to get feedback on ways to scale after.

 Thanks for the response Whitney. Worst case is just continuing payments on this personal loan which I was going to pay back on the refi. In addition to losing the velocity of money waiting for this. I suspect my private lender will be okay with the situation as long as its not drawn out over a several month time frame. I think setting a deadline within the next few weeks is a good idea as it might push there hand. It is an all cash offer so i accepted them to initially jump at this. As this is my first deal, and one that took awhile to find, there is some emotional attachment to losing the deal. I need to look at the big picture and if this does not work then move on. 

 Russell, thanks for the response. I have no problem waiting at this point and understand that this means dealing with people and problems. I really wanted to see how others would deal with this situation, in addition to waiting, as theoretically the child of the estate could sit on this forever. I do not have direct contact with the said person and trust that my agent and attorney are advocating the best they can. 

Hey BP community,

I wanted to see how others would handle this situation. I am currently stuck in escrow as I have a 3/2 SFH under contract that was listed as an estate (i'm assuming passed down to the children as the owners have passed), and we are now currently 2 weeks passed the anticipated closing because one of the children will not sign the paperwork. My attorney and agent note that the sellers attorney and agent have been slow in responding/and giving minimal information on the situation. Our side of it notes that there is not much we can do at this point besides trying to keep reaching out. We could back away at any point and get my earnest money deposit back. I hate to lose this deal as its a good BRRRR that was a diamond in the rough, with the potential to get all of my money out of the deal and positive cash flow. I currently have a private lender (deed of trust) and a private loan that needs to be paid back so time is money. I also paid my contractor a deposit, which I can get hopefully get back if we back out.

How long would you guys wait for the signature before backing out? 

Hey BP community!

I'm about to close on my first BRRRR deal with all cash using a combination of a personal loan (Sofi), my own money, and private money. The private money is from a friend who is looking to partner and provide the capital while I do the sweat equity. For this first deal, we did a small loan (around 10k) that will be short term loan with a payback in 6 months once I do a cash-out refinance. I am writing up a unsecured promissory note stating the terms with 1 point based on the ARV, with 11% simple fixed interest payed back at the time of the refinance. I know this is not the best way to set up a private lending deal as this is high risk for him. I will be able to pay him back with other funds regardless in 6 months so that is why I set up this first one this way. However, in the future I wanted to see what was the best way to set this up, especially with loans of up to 40k+. I plan to do short term loans with the payback during the cash-out refinance. I have heard of different ways to mitigate risk including creating an LLC and having him loan to the LLC. I have also heard of doing it through the settlement/closing agent with a deed of trust, however, I am not exactly sure how this works.

TLDR questions: 

1. What is the best way to set up your private lending deals with a partner to mitigate risk? 

2. Do my terms make sense for a short 6 month loan? 

3. How do you guys set up 50/50 partnerships that is not loan based and the partner and you split the equity/cash flow 50/50?

Also super excited to close on my first deal in 2 weeks!

@Bill Goodland

I got 40k, with decent to good credit so I’m sure you can get that or more. I didn’t ask for more but I don’t see the downside of trying. It comes down to the monthly payment with higher loan amounts which can be a lot. My lesson learned was taking one out and not having a property secured. Still in the process of putting in offers while my monthly payment is going.

@Bill Goodland

Exactly what I'm doing right now. A good lender/mortgage broker will remove the loan from your DTI since you will be paying back your loan with the refi.