All Forum Posts by: Brad Shepherd

@Victor Morales I got my first loan in the name of an LLC after having about 10 rentals but there's no specific time or property number requirements. It's just about qualifying with a bank, which is going to be a financial as well as relationship consideration. You'll find much more success on that front with a local portfolio lender in your area. Think small regional banks.

I think you should have the experience of managing property at least once. But I wouldn't want to stay there. Think of how much opportunity cost there is doing minimum wage activities that the property manager can take off your shoulders. If you want to scale, invest out of state, or just enjoy your weekends, finding the right property manager is the ticket.

I've done a couple loans with R Bank and have enjoyed working with them. They are a small regional bank, portfolio lender, so walking into their branch feels like a scene from Cheers. They're certainly worth checking out. 

I did a cash out refinance on two duplexes in San Antonio using a broker in Houston. No seasoning requirements. PM me if you'd like that intro. 

Like Cherine said...breathe. Run your numbers. Post your work here and let others point out things you might have missed. And then do it. And you'll be fine. You will make mistakes. But those are just lessons learned. If you use conservative numbers, put in practice what you've been studying, none of those mistakes will be life shattering. Go get it! 

Great discussion here. Lessons learned for sure. Definitely could have been handled better, but I hope the outcome goes smoothly. I'm in the '"settle out of court" boat. I'll actually be in small claims court this coming Monday...hoping to collect money from a former property manager that ran off with the rents. No lawyers. Should be interesting!

This is phenomenal Sam. Congratulations on the deal and for creating that success for yourself and your team. The amount of learning you've already acquired and are about to acquire is incredible. Nothing like your first! 

A - Yes, generally as soon as the rehab is done and you have a signed lease. start my refi process the day I close on the purchase. 

B - Local portfolio lenders are your best shot. Get on the phone and start calling local banks. Ask for their commercial lender. I

C - Just like any other loan. W2s, ~3 years of business and personal tax returns, balance sheet and cash flow statement.

D - Not for small residential properties. As least that's been my experience.

E - Max I've found is 80%. 75-80% is typical.

F - For a cash out refi with a local portfolio lender, it will be the new appraised value.

Your example scenario makes me think that you'll be leaving some cash behind locked up in the property, which is not bad in itself if you're ok with that. You have to add in all of your closing expenses twice (purchase and refi); if the rehab budget is between $18-20k, plan on $25-30k. Generally for BRRRR you want purchase + rehab costs to be less than 70% of ARV, unless, again, you're ok leaving some cash locked in the property.

Love it! Congratulations @Holly Williams. I wish this avenue was talked about more. My wife and I started with basic rentals, then with flipping, then buying larger multi-unit deals, because that's what you're "supposed to do," right? Then we finally realized we could have been much further ahead with much less risk and hassle investing passively. Now that's all I focus on and it makes life much happier. I put my own money in deals and work with a few syndicators doing various tasks, including helping them raise capital for their deals. Much better than dealing with contractors, tenants, and maintenance issues!

One thing I would add is regarding your question about the approach with yellow letters. Depending on the size of the properties you're mailing to, you're likely to get better results with a professional looking letter rather than the traditional "hand-written" yellow letter. If you're talking about 2-4 units, sure, the yellow letters might still be appropriate. But if you're talking about large multifamily, you're generally talking to a different audience. Doesn't have to be fancy, but sharp.  I'd love to hear  if anyone has a differing opinion regarding this approach and this target market.

Yes. The insurance company has to have a W9 on file for you to make payments. Tax code requires that of them. Just like any time I make a payment to a contractor or other professional service provider, tax code requires I get a W9 from them. You should expect a 1099 from the insurance company early next year.