All Forum Posts by: Brad Shepherd

Right next door? Four years? Yeah, chase this guy down until you find him!! 

First, put a note on the door so he'll see it if he ever comes to check on the property and you don't see him there. 

Your county records have the name of who owns it. Find the name online or down at the county building if you have to. Then you contact him one way or another. Put a letter in the mail with a message talking like you're a real human..."Hey, just curious if you'd be willing to sell that house. We want to buy it." 

Even better, call him or direct message him. Search online for that address and/or name and you'll find phone numbers. Social media, whitepages.com, spokeo, homemetry.com, truepeoplesearch.com. Whatever you need to track them down and have a conversation.

Something to consider, based on how you feel about this approach. Call the city code office if you see an offense...tall grass, trash in the yard, etc. Getting a code violation notice from the city may increase the motivation to sell.

The only time I ever get an appraisal on a property is when the lender requires it. When you do your research of the area in the market, you’re running comps and will have a very good idea of what the house is worth. Not even my private lenders require an appraisal, because they can look at the comps themselves. You’re not going to be $100,000 off the value, that’s just silly. I feel the same way about inspections. My contractor walking through the property with me as my inspection. I approach it the same way whether I’m buying a house to flip it or to keep it as a rental.

@Jimmy Ready, that's like asking why some people are ok having jobs and others want to start their own business. If you put money into an SDIRA, it just sits there. You then have to direct the custodian to do something with your money in a legally allowed investment. You have to become the "entrepreneur" of those funds to put them to use wisely. It's work. A regular IRA at Fidelity or Schwab is just simple - put your money in, choose your fund, and forget about it.

To your "in case they decide to do real estate later" question. It's not hard to move money from one custodian to another. To be technical, there is no such thing as an SDIRA in tax code. An IRA is an IRA. What changes is the custodian - a Fidelity or Schwab type of custodian allows you to only choose from the funds they offer. Other custodians, like Quest IRA, will allow to invest in all the other permissible investment options, like real estate, etc. It's just a matter of how that custodian is set up and what type of work they want to do. That's why it's not hard to move money between custodians, because technically speaking, they're the same type of account tax wise.

Owner financing out of a rehab project is a phenomenal strategy. You won't get hit with the full tax effect since you're not recognizing the entire gain at once. And you've essentially in the seat of a landlord but having no responsibility for the upkeep of the property since the buyers are responsible for that. And of course you don't want them to default, but if they do, you're still in a great position. 

You don't need a company to do this for you. Post the house for sale - Craigslist, Facebook groups, bandit signs, FSBO sites - close at a title company, use a note servicing company, and you're all set.

That said, Sherman Bridge is a short term lender, so you have to pay them back soon. If you don't sell the property, what is your plan to pay them off? 

If your employer offers a contribution match, take advantage of that but only to the match limit. That's likely to be your best return that you can find anywhere. And definitely max out your IRA contribution ($5500) each year, even if that means you're eating ramen and pb&j sandwiches while you're young.

You can't get a personal loan with your IRA, it has to be in the name of your IRA, which isn't you, and it has to be non-recourse. There will be tax implications based on the percentage of your gains that are attributable to the borrowed amount, so you'll have to have your CPA guide you through that.

For a cash out refinance, best I've seen is 75% of the new appraised value, but most likely 70%. If you find something better let me know!

And the 6 month seasoning idea is the myth. I haven't found a local bank willing to do less, but it's easy to find a mortgage broker with loan products to refi sooner than that. My guy starts my refi process the day I close on the purchase, and then as soon as the last tenant is in place post rehab we close on the refi.

As for what's better, that's up to you. But in general, multi's will cash flow better, SFR's will appreciate more.

Sounds like you've got a good house in a good area. If it's in Cibolo or that corner of San Antonio, your long term appraisal rates are going to be solid. If you plan to hold onto the property for a long time, the refinance could make sense to improve your cash flow. But remember, your wealth is built on holding real estate. I'll take skinny cash flow for a strong appreciation play any day of the week, assuming you have other means of paying your bills. Sure, you may be able to sell and take advantage of some tax exclusions, but if you have the ability to hold onto the house and continue to build your portfolio, ten years down the road you'll be happy you still have that house.

Plan on 70% LTV at best. It’s not hard to find a lender that does not require seasoning. I begin the refinance process as soon as I begin rehabbing. As soon as tenants are placed we close the refinance. If you’re doing the loan in your personal name, of course DITI is part of the lender’s evaluation. Absolutely talk to a mortgage broker first and have them prequalify you. Don’t jump in without knowing for sure you can get the long term financing in place, or you might be forced to sell in less that ideal conditions.

If you're borrowing rehab dollars, then the hard money lender will typically hold those in their own account and distribute them to you as draws after work is done. If you're not borrowing rehab dollars, there won't be excess funds unless you found the miracle lender that'll give you >100% LTV.

Think about your math. 3% or 6% of the entire sales price of a house, vs a referral fee. No way those compare. I don't know if some PM's pay a referral fee, but it's not uncommon for an agent just to recommend someone and not try to get in the middle of it. No, it's not a significant source of income.