All Forum Posts by: Anna Buffkin

This is not uncommon.  

I've been with my contractor for a while, so small jobs I just pay when the work in done, but for larger jobs, I pay him 50% upfront for materials and the balance when he is done.  

Also, with a commercial loan, DSR is more important than DTI.

I am in the middle of a BRRR right now. Here are my "readers digest version" numbers and explanation:

Property: 3/1.5 SFH

Purchase Price: $59k

Reno budget: $20k (went over a little so will actually end up around $22k)

appraisal: $105k as is

ARV: $125k (estimate per appraiser based on repairs/ reno list provided)

Current Mortgage: $431/ month (20% down on purchase price, 100% finance of repairs 20 year am. with 5 year balloon at 5.25% commercial loan)

Rent estimate: $1050/ month

The commercial lender should let me cash out up to 80% of the after repair appraisal as long as my DSR is above 1.2.   

Hope this helps.

By hold it for a year, I assume you are referring to owner occupy clause which even holding it a year you are breaking the clause by not living in it, but neither here nor there.  

With or without water, that's a lot of carrying costs (electricity, insurance, tax, etc).  If the place is near where you currently live and work, what about moving into this property and renting out your current place or terminating your current lease if you are renting either early or when it expires.  It may take many years of rent collection to break even from the 1 year vacancy.   

While I think 2/2 is probably preferable, 5 of my properties are 2 bed room.  I don't see any significant drop off in interest for a 2/1 vs a 2/2 and the rents are about the same.  4 of my 2 bedroom units are in the same neighborhood.  The 2/2's rent for $750 and $712.  The 2/1's rent for $750 and $700.  They are all around 1000 sq feet.  

Another strategy my husband and I employ is putting all income producing debt (mortgage) in his name and all other debt in mine.  Right now his credit looks great, but we are doing a $20k rehab which went on my no interest for 18 month credit card and my line of credit until we refinance in May.  My credit which is usually in the mid to upper 700s in the upper 600s right now due to the new card and mainly the debt utilization rate I presume. 

@Justin Sheley  Congrats! My husband is a high school football coach and English teacher.  He plans to continue teaching, but gave notice in February that he wasn't going to coach next year.  Its crazy the demand put on high school coaches and ADs.  

Best of Luck!

@Joe splitrock This was off the MLS. It was one of my realtor's listings that wouldn't sell. An elderly lady whose husband had passed had done some sort of seller finance and she ended up foreclosing on the occupant. The house was not well cared for.

She had several low ball offers and a couple people backed out after inspection.   I'm not sure why because the inspect didn't really unearth much I didn't already see.  Anyway it continued to sit.  I expressed interest and threw out a number to get things started. My realtor went to the seller knowing I would and could close and came back with a bottom line of $59k which is what she owed on it.

It was my first Mls purchase since 2015.  I think I annoyed my realtor on occasion as I have gotten used to self service through an attorney. 

I closed on rental #8 on March 5th and renovation is underway.  To start, the numbers:

3 bedroom, 1.5 bath 1700 sq foot brick SFH with bonus room.

Purchase Price: $59k

Appraisal: $105k as is with estimated $124k after rehab.

Renovation budget: $20k.

Renovations include: new flooring in bonus room, kitchen and baths. total renovation of bathrooms, new cabinets, crown molding (to cover bad drywall job by previous owner), buff hard woods, paint exterior, paint interior, remove awning, remove side door and seal up, fix low spot in kitchen floor, and remove the non-permitted fire place.

Estimated Rent: Initially I budgeted $950 per month based on another rental I own in a similar location, but  two houses on the same block were recently rented for $1200+. So I may have to reevaluate the rent once it's time to advertise. The house should be ready to rent by early April with a goal of having it rented by May 1.

I plan to refinance the property in May once the project is complete and the house is rented out.  

Isn't see a beauty!

I am not a wholesaler, so i could be wrong, but I believe most wholesalers are looking for cash buyers/quick close and don't want to wait 2+ months for a FHA loan to close.

That said, the source is not as important as the deal. Some wholesalers are great, but most aren't. I've never brought from a wholesaler, but have found deals via MLS, Craigslist, Zillow FSBO, and I had a seller who sold a previous property to me call me up and offer additional property for sale. Good deals and bad deals are out there on every platform.