All Forum Posts by: Blake Choisnet

Where is the market for selling these notes? What tools allow you to connect with those looking to purchase these? 

What groups are out there that lend to practicing Muslims and honor their financing restrictions?

I'm helping a friend who wants to start investing in real estate. She's a practicing Muslim so they have very strict rules around not being able to pay interest (what they call 'riba'). She's struggling to find lending options for investment properties that honor her beliefs. The main players in this space are Guidance Residential and UIF, but it turns out that they may just be purchasing a Freddie/Fannie loan on the back end to finance the deal and then structure it differently for the buyer - which isn't in accordance with their religious rules. 

What groups are out there that lend to practicing Muslims and honor their financing restrictions? Are there any? 

You have two main options for sourcing below-market deals:
1) Direct to seller marketing
2) Wholesalers

D2S requires more time, expertise, marketing budget, and sales skills, but you get a better deal. 

Wholesalers requires less time, expertise, and budget, and you pay a bit more for it. 

Personally I love using wholesalers because I free up my time and I pay only for results - if it's a good deal they get paid, and I'm happy to pay a fat assignment fee. D2S is great too, just know it's more work and will take more time refining your scripts and motivated seller list criteria, doing split testing, negotiating, and taking phone calls often. But if the deal is good enough that might be worth it to you. 

Good luck!

Top markets I'm seeing for remote BRRRR right now are:
- Dayton OH
- Birmingham AL
- Macon GA

All have a market rent-to-price ratio well above 1.0% which will give you a better shot at cashflow. 
Price of entry is much more friendly as well. 
Landlord friendly state? Check. 

Hope this helps. 

Does anyone know of a lender or product that provides 80% LTV on appraisal at purchase?

ex: Property worth $100k, have it under contract for $80k. Come to close and only pay closing costs.

I consistently find great below-market properties but would like to keep as much cash in my pocket for other property acquisitions. I'd like to identify a couple of lenders that lend specifically on appraised value rather than 'the lesser of purchase price or appraised value'. 

Any help? 

Does anyone know of any loan products that allow an investor to get 80% LTV on appraisal at purchase?

ex: Property worth $100k, have it under contract for $80k. Come to close and only pay closing costs.

This would be 20% equity, but not 20% LTC. 

 If you ever offer this in TX sign me up!

It depends on what your goal is. If your goal is to pay off the loan entirely, it'd look different than if you wanted to maximize monthly cashflow. Personally, I want to maximize cashflow so I usually refinance my properties once they're at 50%-60% LTV and cash out the equity available and buy additional properties.

As far as a 'worst case scenario', if you're not in a position to weather a 6mo downturn, you should sell and transfer that money into a higher cashflow property. In '08/'09, property values declined 33% overall but recovered and are up almost 100% from their 2008 peak. Cashflow on a property is your hedge against market downturn. But with the way we've been printing money it's reasonable to expect property values to continue to grow - Goldman Sachs predicts home values across the US to increase 16.4% in 2022. 

In my opinion, this isn't the most effective use of your money. Would you make money? Probably. But if you put that $100k into five properties valued at ~$100k (20% down being $20k), you'd reasonably be able to get $300/mo cashflow per month meaning $1500/mo pocket money (not to mention principal paydown, tax sheltering, and appreciation). 

Average 3BR rent is $1,304. You can find a bunch more information for the market as a whole here: https://www.bestplaces.net/hou...

If you need evaluation on a specific neighborhood or property, I recommend talking to (and building a relationship with) an experienced property manager. They're the expert in rental rates in the market.