All Forum Posts by: Brynt Rushing

Chris, wouldn’t you agree that 20% seller financing is superior to bank financing when you factor in 0 discount points/ origination fees paid and the fact that I don’t have to qualify for a loan?

also $110k 15 year term was what I negotiated him down to.  I’m quite sure it’s his lowest. He wanted $120k on 10 year term. 

The duplex we bought across the street for $63k. It had flooded and was gutted to the studs.  We did a $40k remodel for $103k all in so it’s hard to use that as a comp. paying $110k is probably a little under market value when you compare the rents to other duplexes in the area.   Regarding the deal in question, it’s in an area right by my house that I’m very familiar with. I’m mainly curious if you guys think the cash flow is too low (the 15 year financing jacked up my monthly). It puts me around $300-$350 per door after debt service.  My property across the street brings in $450 per door including mortgage which I’m quite happy with.  I’m certainly not counting on appreciation at all it’s just a bonus as usual.  

Hi BP I have a question about a duplex I’ve been offered to buy. It is located in my rural town of around 15000 people. Both units are 2 bed/1 bath currently renting for $775/month each. I purchased the duplex across the street and have total $100k in after remodel. I raised the rents to $900/each (I think actual market rent is around $850). The property I’m looking to buy was offered by the same seller off market for $110k. It’s in good shape other than paint and a fence and is 100% occupied. The seller has offered to finance the deal for me at 5% interest over 15 years with $20k down. My taxes/insurance come to around $250/month and the note would be $712. I was thinking of asking for interest-only for the first year (I would recoup 50% of my invested capital this year and the rest over the next 1.5-2 years). My partner in the deal doesn’t like that we’re paying $110k and having to put 10k in on top since that will put us $20k higher than we have in the property across the street. In my opinion, the pros of seller financing/being across the street from a property we own/area that is appreciating and 2 minutes from the interstate make this a good deal even tho it’s slightly less cash flow. I told my partner I would make the post to see what you guys think. Any advice is greatly appreciated!

Hi everyone and thanks for responding so soon! I’ve been through several banks in my investing career. This is a local bank that seems eager to lend money for real estate ventures and the lender I’m using was highly recommended and she seems thorough and experienced. That being said, my tax returns are solid from my day job and I have several rental properties that are cash flowing and have been for 1.5 years (they show on my 2017 return). I don’t feel like it will be difficult to find another bank to lend me money but since my property is under 5 units and therefore being valued based mainly on comps I’m worried I might get the same appraisal again. I got into these duplexes because the cash flow was close to 2% which is great for a B- area in my opinion. This is an equity line and not a refi (not sure if I mentioned that). They’re also charging me $3k per property in closing costs. Does that seem high on an equity line? I guess I’m just disturbed by the fact that a rental property bring in $17700 per year after expenses could appraise so low. Lesson learned when investing under 5 units I’ll check the comps a lot closer. I still feel like the cash flow well outweighs the low appraisal from an overall viewpoint. Any other advice would be much appreciated and thanks again BP!

I purchased 2 duplexes outright in a class B- area. I purchased them for $63k and $43k. I have put $40k in renovations to both of them (they flooded and needed extensive repairs). I raised the rents to $850 and $900 at one duplex and $750 and $1000 at the other. My bank just did the appraisal so I can pull my money out and it came back at $88k and $85k. Everyone I've spoken to about this including other investors and real estate agents think this is insane. The realtor told me she would list both of them at $130k each and expect them to sell soon. My lender said the appraiser used a market analyzer of 52. I'm wondering if this also seems quite low to anybody based on the income. They each bring in $17500 per year after taxes and insurance. I called my lender and expressed my concern to which she said she would ask the senior loan originator. This will result in me only being able to pull $140k out instead of $200k. I feel like I made a solid investment based on the cash flow but how can I use the BRRRR method if my appraisals are coming in so low in comparison with the cash flow? Thanks for the help!