All Forum Posts by: Ann Bellamy

I think you are getting discouraged when 1 or two banks say no. I identify, I tend to do the same thing, as do almost all of us. The trick is to keep going after 7 or 8.

So make a list of the small local banks in your city, and credit unions. Speak to the commercial loan person. They may consider a blanket commercial loan. However, you will probably have to title the properties in a company name, so that the commercial lender can stay in compliance with SAFE, etc.

Also, you sound to me as if you are doing very well. But quitting your job to finish a rehab may actually help you in the long run. If you can't get a job, you may be forced to be a full time real estate investor. Most full time investors don't do their own rehabbing, they hire it out, and focus on finding deals. Or they do part of it, and sub out part of it. I think maybe if you had focused on finding a contractor who didn't cheat you, you might have been better off.

Go to your local REIA - real estate investor association - and meet some more investors in your area who are successfully doing what you are doing. They may be able to point you to a local lender who can help. And help you find an honest contractor.

In your situation, I don't think I'd use hard money - the carry costs will eat you alive if you are doing all the work yourself and it takes longer. also, if you can't refinance out, hard money won't help anyway.

Good luck, sounds like you just have a couple of bumps, you are doing well, I think.

Don is right. However, a few caveats.

Not all hard money is 6 points, so you have to run the numbers to see what makes sense. Be sure you calculate worst case scenario.

Taking an equity partner can cost more than hard money in some deals. Again, calculate worst case.

The key to using hard money is to get out quickly. Underprice your property so it sells quickly, and be as sure as you can in this market that the end buyer qualifies for the financing. Be prepared for the end lender to need 2 or even 3 appraisals if you've done a rehab.

Underpricing can actually make you more money at the end if you didn't have to pay the hard money for very long.

I've seen more deals go sideways because the seller decided he could get more money, and spend a month or two at the higher price, only to end up taking the same or less than if he had underpriced to the market.

A hard money lender probably won't fool with it either. The closing costs will equal or exceed the loan amount, depending on rates and transfer taxes.

Speaking from the hard money side, I'd rather you were upfront about it. It is common that hard money pre-approvals are more approvals to do business, like Alice said, than approvals of a specific deal. Since hard money approves the deal and not the person, until there is a deal, it's hard to specifically approve a property.

I'm all tangled up in my own words, so I hope that made sense.

And believe me, that lender won't be shocked that you went conventional. I tell everyone that if they can go conventional, they should.

Ben, I read every word, all the way through to the end. Congratulations, persistence triumphs over all obstacles.

So keep at it, it's nice to hear that you didn't give up. Future deals will be easier, and you've discovered that commercial financing, when approached properly, is usually much easier to obtain than residential. The key is selling yourself and your deal properly.

Great story, and good luck to you.

I think it's going to depend on the local preferences, the architecture of the house, and the pricing.

To me, oak is totally dated. Even maple is a little dated. The current high end kitchens are going with darker sleek cabinets - think espresso finish or dark cherry.

If the property has some antique or reproduction characteristics, such as is common in the northest, painted with reproduction hardware is appropriate. Don't go with colored paint, like green or blue, it's too specific.

Low end houses still like oak, or home depot maple, which is not expensive.

sounds like you are living by my mantra-

Do something, even if it's wrong.

Doing something is always better than waiting to see what happens, in my opinion. Because then it will happen to someone else!

Go for it, and good luck.

I don't know the laws in Iowa, and the majority of people on this forum won't either. And it appears that you don't either. But I'd be careful if you've never done an eviction before. Find a local attorney who does evictions in your area, and consult with him. The cost of messing up an eviction can be months and months of delays, and a pissed off tenant who now has the upper hand because you screwed it up the first time.

Once you know the process in your state, you can be more confident in future processes.

We pro rate. In this area, there is no hard and fast rule about moving in and out on a specific date. We don't have much of an issue, people stay til the date they are ready to move out and pay per diem for when they are there. And if they move in on an odd date, we charge a full month, from say the 10th to the 9th. Then the next payment is the 10th to the 24th, and then the next payment is the 25th to the 24th. Not an issue.

I almost never have a vacancy for more than 2 weeks, and that includes time to paint and repair. Sometimes I have someone waiting to move in the day after the old tenant moves out.

It's just not an issue. I don't have to line up with any management company or big complex. Maybe it is what is customary in an area. In New England, there are a lot of small apartment buildings, and not a lot of complexes.

John, I didn't mean to hijack your post, but I'm hoping this information is helpful to you.

I send all my borrowers to this agent, his rates are very reasonable, and many of my borrowers have switched all their policies to him.

I like him well enough that I have posted a link to him on my website. He is very quick to respond.

Try Tim: http://www.nreinsurance.com

Good luck, and let me know what you think.