All Forum Posts by: Bernard Sanga

Hi Jonathan, 

I'll be honest - It is probably not a good idea. Especially since you are a newbie. This is coming from a fellow rookie, I own just 3 properties but I did extensive underwriting on possible scenarios for BRRRR and 0 down deals.

A 0 down deal means you will be 100% leveraged. So the room for error on estimating your max allowable offer and ARV is very little - actually none since every cent that you miss is negative equity on your part. It could work but like the others say - this is too much risk.

0 down deals are okay for experienced investors with a lot of reserves when **** hits the fan. The only way it may work is if you source your own deal and you find a home run where you have significant equity even before rehab - this can be your cushion.

Good luck!

Hey Jake!

I was in the same situation as you when I started. Most of the previous posts already gave you good advice but here is how I did it.

I made offers without seeing the property. You can typically get all the information you need in the listing to make your preliminary offer. I check the county appraiser's site for permits so I know all the updates made on the property. Good deals in my area usually get multiple offers the first day of listing so you have to be fast - be on the lookout everyday and get your offers in fast. Preliminary offers that get accepted in my case are usually close to if not on the listing price. Inspection contingencies are a standard for me.

Quick tip - schedule a walk through with your agent right after contract is signed. This way if you see something that breaks the deal (big ticket items, foundation issues and etc), you can avoid paying for an inspection and cancel the contract right away. I like talking to tenants, if possible too. You can get a lot of insight as to how the landlord is taking care of the property and to learn any potential problems. 

Lastly is know your market. Analyze enough deals so you know what your typical cap rates, COC returns are. Higher cap rates/ COC typically gets you lower quality neighborhoods, and the opposite is true for low cap properties. Can't have them all man, you gotta pick your poison.

Originally posted by @Kenneth Garrett:

@Bernard Sanga

You can buy conventional, fund the rehab and refinance 6 months later. The difficulty with this, is the property must not be in that bad of condition so not sure how much forced equity you can get. Your also paying closing costs twice. If the numbers work then start calling lenders. I use to be able to get 75%-80% cash out refinance, now it's down to 70% of ARV.

Yeah, I bought a triplex that has 2 buildings. A side by side duplex and a 2 storey building with a shed on the bottom unit. I am finishing the shed and turn it into another unit, adding 700+ sq ft to the property. I talked to 2 lenders so far and it seems like 70% is the best they can do. Is the 75-80% you were getting before on sfh or multi units as well?

Originally posted by @Whitney Hutten:

@Bernard Sanga In theory that works (I've done that). Talk to a conventional lender now to understand if they will finance the final project. Many get stuck buying a $30K house, put $30K into, ARV is say $75K and the bank won't do it because the loan value is too low. Also, know that rates can move on you too!

The ARV is gonna be 300+k so its should be fine in that respect. Got my lender on the phone today, sounds like this could actually work! Thanks Whitney!

Let's say you buy a property from MLS cheap enough to BRRRR and get your money out. Property condition was good enough so you used a conventional loan for the purchase, then paid cash for the rehab.

Is there gonna be a problem if you try to cash out refinance just after 6months of initial purchase? I am looking for any lender restrictions that I might not know of. I know most people use private or hard money so I wanted to know if using conventional loans for acquisitions make a difference in the BRRRR process.

Thank you!

Hey Mark,

There is a meet up event with J Scott as the speaker near Tampa next week. This should be a great start. Welcome to Tampa, see you around.

https://www.eventbrite.com/e/j...

@Aron Ost

It is gonna be very difficult to find those type of numbers in B class Tampa unfortunately. I have been looking at the MLS and off market deals from a lot of wholesalers almost every day for the past 18mos now and you will mostly find C or D class barely meeting the 1% rule after rehab. A-B class is maybe 0.5 or less lol.

@Bonnie Rhodes

Started investing at 22. Active trader, won some, lost some. Stopped about a year ago. What stopped me is a 29k winning trade. It made me realize, even if I get 100k trades it would still not change my life. I still need to work. There’s a lot of stress/ pressure and work/ research that goes into trading. It kinda consumes you and is a full

time job. Not what I wanted.

Started REI ~ 1 year ago and now at 6 doors. Used most of my profits from trading to buy small multis. In the process of slowly building towards financial independence.

Thanks

Bernard

Originally posted by @Mario Lopez:

Filipino here! Just joined and haven’t done my introduction post yet. I’ve worked on a deal in Orlando recently. Somewhat near you!

Hi Mario! Just sent a connection request, hope to hear from you soon! 

@Cielo Macaraeg

Hello kabayan! Welcome to BP! Talk to you soon!