All Forum Posts by: Austen Mueller

Sounds like your interested in buying a fixer upper with hardmoney and refi into a conventional mortgage for a home you will be living in? In which case just I would run the numbers as a BRRRR without any rental income. HELOC may be a good way to go for you as well.

If your going to live there. I assume you have your target market boiled down to just a handful of places. If there are not many deals in this area and your looking for affordability. I would consider putting that large down payment into a conventional mortgage and trying to paydown as many points as possible. 

Don't put the cart before the horse. I would save up, and get your credit resolved first. Then utilize a low down payment loan and get yourself into a househack. 

Welcome to BiggerPockets! I would recommend using the agent finder for getting in touch with an investor agent in your area

@John Mathewson Im curious to learn more about partnering with passive investors. How are deals like that set up logistically? what returns does the investor get, and how is the partnership formed?? 

@Hassan Kamara Where are you from? like @James Dainard said local is best. No one will manage your project like you. However in todays market local isn't always an option. Doing BRRRR out of state isn't impossible but will take a trusted team. A good agent should be able to point you in the right direction here.

I would focus on markets that meet your price range. Then out of those markets I would focus on markets with a good price/rent ratio, have high appreciation, high rents, and favorable landlord laws. Or just simply ask other investors where they have had success. Ideally looking for properties and locations where there is a large spread between purchase price and ARV.

@Alex Ballesteros Great question. When you Refi the bank will give you usually 75%-80% LTV.(Loan to Value) of the ARV(after repair value) like you said. some simple numbers for running a quick analyses will look like this.

$250k(ARV) x .75(75%LTV) = $187,500(cash out) **The idea here is to have Purchase price, Rehab, closing/holding cost be equal to or less this number*

For Example: $187,500(cash out) - $100k(purchase Price) - $85k(rehab) - $15k(closing & holding) =  $(-12,500)

In this scenario you end up leaving $12,500 in the deal. Being able to pull all your money out is the best and know as the "Infinite BRRRR" because with no money in the deal your cash on cash return is essentially infinite. However in this market it is difficult to find the elusive "Infinite BRRRR"

These numbers are basic and will very on

1. Your ability Find great deals. 

2. How you get repairs done. Weather that be by yourself or working with a GC, and getting it done in a timely manner  

3. Lending. Hard Money, CASH, HELOC, ect

Good question. 

Speaking to an attorney is always a good idea. I'm sure other people have some valuable insight into working with the city of philadelphia I'm sure I could benefit from as well. 

In my experience Philly zoning and rental licenses can be a pain when working with the city when transitioning ownership. In my experience it depends on who you are talking to. We went under contract on an occupied duplex with all separate utilities, professionally managed, and had docs in https://atlas.phila.gov/ indicating its legal use as a duplex. My buyer still spent months getting the new rental license because he had to show proof from the seller it was a 2unit. What this "proof" actually was kept changing. Unit all he needed was a signed doc from the seller saying. "Its a two unit." All because the previous owner let his rental license expire in 2013 and then the headache fell on the buyer. Good news was it didn't affect him collecting rent.  

In short, I would make sure he has a valid rental license and associated docs in Atlas.phila.gov align with what they are selling for starters. 

Also.... On the CMX-3 zoning. @Joshua Messinger you know better than I do, but I believe CMX-3 zoning or above will be needed for STR's in Philly if you are not using your primary residents. @James Corr Not sure if STR's are part of your investing strategy. With new Philly laws making it harder for STR's to operate. The fact you are zoned CMX-3 could be a bonus/value add to the deal. 

Best of luck with the deal. Let us know how it goes! 

Hey! @Ashley McWilliams. Lots of great areas out there. We are seeing lot of good opportunity in PA. Stable market where you can still find affordable turnkey rental property. Price ranges around $100k-$150k for turnkey property that cashflows. Seeing a lot of growth and appreciation in Philly as well. PA is also a landlord friendly state. Witch is good to keep in  mind when looking out of state. Best of luck on your search!