All Forum Posts by: Bryan Wilson

I agree he should, problem is he is a bit delusional in the sense that it is his wife and kids first home in their dream location.  I like the ideas you put out though.  I just had it on my mind to find out other suggestions.  Personally, I'd get the 2nd job, I'd look to sell off things, or get out of the deal and chalk it up, but he has other thoughts.  He actually has gained equity in the deal too and might come out break even worse case scenario.  I wondered if there was other options at this point I could pass along, but I think we all know what he should do.  

I'm working with a guy that purchase a primary residence. Instead of taking out a 203k loan or even an FHA loan he put 20% down. He was under the assumption he would be able to take out the rehab costs at the end of fixing the property. Besides having done everything wrong to this point he has put $30k in rehab on credit cards. He now has a debt to equity ratio that is all out of whack. His credit score has been pinged from opening new credit cards throughout the process. He was told he no longer qualifies to get a refinance on the property to get out of the mess that has been created. Probably a good reason not to use credit cards to fund a rehab.

My questions is what options should he look into.  Selling the property is a last resort at this moment.  I've suggested many options to help with paying the credit cards back including taking out a loan on his employer 401k which is at a much more favorable rate and would alleviate some of that pressure.  His end game is refinancing if possible, but anyone know of other options?  

Ultimately I think he should sell the property and get out from under it and he should breakeven at least, but I don't think he is willing to go that route.  

Hello, 

I have a coworker at work who is in a bit of a pickle and I was wondering what the forums might suggest he do.  

He recently purchased a house and was supposed to be able to do a cash out refinance once he completed his updates he did.  Yes I know he should have probably financed everything in a construction loan and done a better job of getting appropriate financing up front.  

His problem now is that he has run out of money to fix his house up completely and the bank will not allow him to do a refinance because his debt to equity ratio is too high from having put everything on credit cards and personal lines of credit.  

Any suggestions for him to be able to consolidate or fix this mess?  

I've mentioned he should go from bank to bank and keep looking for someone that can help him out, but he's 3 months into owning this home it will be his primary residence for the foreseeable future.  Should he look to go Hard Money Loan to complete the project and pay off his other debts then refinance?  I'm not experienced enough to help him, but I figured I can type up a message in the forums and put it to the group.  

Thanks.

Hey Mikel, 

Mark A. Boyce CPA is a good choice in the area.  He's located in the middle of Colorado Springs not downtown.  Otherwise I'd recommend EBK.  

Hey Daniel,

I live in Colorado Springs and am just starting out myself.  I'm a full-time worker (9-5), graduated debt free (paid my way), and have one property and am looking to acquire my second.  I'm an accountant as well so I have some financial knowledge that may be of assistance.  I have a family friend who is my real estate agent and her husband does fix and flips.  

My own opinion is you may be primed to acquire some SFH's right now with minimum financing unless you want to eliminate PMI and put 20% down. If you were willing to do it each year you could possibly go this route once a year and limit your down payments to 3.5-5%. With sizable savings and each with jobs and low debt you probably could qualify a few times with conventional financing and jump start your investing career with minimal up front investment. At that point you'd have to become more creative in how you finance probably, but it could be a simple start if you wanted to go the buy and hold route.

PM me and connect and let's talk.  

I'm an accountant and I've done my own taxes my entire life and friends and family.  Where I believe the value is found is in knowing that a CPA or tax accountant in general will understand the IRS processes quickly in the case of an audit.  One benefit to having the CPA do your taxes is that if there is an audit and discrepancies show up they can pull together all that is required without needing to scramble to do so because they will understand what is necessary.  Another benefit is that they can represent you in a case with the IRS.  Also once taxes become more complex the likelihood of audit goes up as well and it is nice to have peace of mind knowing that a professional you can trust handled your taxes appropriately.  

With that said though I tell people all the time they can do their own taxes if they are willing to read up on the tax code and apply the instructions appropriately.  It isn't rocket science, but it does take time to research.  I think whether or not you want to spend your time researching and applying is the real question.  In most cases the $200-500 is worth the time saved plus it may be a tax deduction too.    

As an accountant I'll mention that you will have a much easier time finding accountants that use QuickBooks over other programs.  If you decided down the line that you need to push all record keeping out to a bookkeeper.  Xero is a solid product as well, but my experience has found that not many people have used it as a tool regularly. 

I think it you can't go wrong with either of those two, but personally my choice would be QuickBooks just so that if I were to pass off my books it would be a fairly simple process.  

@Arpan, much appreciated. This is a tremendous list you pulled together. Thanks!

Hello all,

I'm still new to the forum and have been digesting a lot and am thankful for all you provide.  Today I'm wondering how do you vet hard money lenders.  Do you have a specific checklist you follow as you would maybe a tenant?  

Along with this question would you recommend hard money lenders to someone implementing a buy and hold strategy and renting their properties?  Seems to me hard money works best for rehab and refinance programs.