All Forum Posts by: Caleb Dryden

@Brian Garrett that makes sense, I'll knock on a few more doors. Just to clarify, the strategies I'm currently using are BRRRR (using private investors) and a HELOC I've secured. Not sure if that changes the equation but I'm thinking I'll have to pursue the portfolio loan when I attempt to refinance the BRRRR property so I can pull the investor's money out of the deal.

@Bob Okenwa and @Tarik Turner thanks for the suggestion on portfolio loans. I'll look into that through our local credit union. I didn't realize they had different capabilities compared to national banks. @Daniel Molina (thanks for the open door) and @Andrew Syrios looks like I'll have another conversation with my bank. I have a pretty good relationship with them and they still didn't count the rent on my DTI. I appreciate both of your responses.

Brian Garrett thanks for the recommendation. Is commercial financing easier? The bank I'm currently using told me they don't count rent income in the D to I ratio otherwise i would be fine to refinance.

My real estate portfolio is growing and as it does I'm having trouble continuing the BRRRR strategy. I have a 9-5 job, no debt, other than the properties I've BRRRR'd and refinanced, thus picking up a loan in the end. I'm figuring banks will soon restrict my ability to refinance since the gap between my debt/income ratio is growing. Any suggestions/thoughts on tweaks I can make to avoid slowing down my progress? Thanks for your time...

Makes sense @Neal Collins. I've reached out to a few different people but having trouble gaining traction with people who are committed to jumping into this process with me. Most of them are fairly conservative and don't want to put their money at risk. Oh well, keep on searching. 

LAPS is the acronym for Leads, Analyze, Pursue, Success. Simple for sure but a good reminder of where you need to be in the process of finding deals and making them happen. 

I love the LAPS strategy. It's easy, practical, and a great concept for finding your next deal. The only trouble is, I've found several deals but am not currently in a position to pull the trigger. Any suggestions on how to find individuals who are willing to invest in your property? I've put the numbers together in preparation of sharing the deal with those individuals but again, just haven't been able to find them. Any input would be helpful and appreciated. Thanks

Thanks for the reply @Timothy Maloney, @Jason D., @Eric James, and @John Leavelle this was most helpful. So in essence, after refinancing I would pay back the lender and recoup my out of pocket money, and the final product equates to me owning a property without being out any money. And current tenants are paying off the mortgage. Does that sound accurate?

Question related to how you structure the deal with an investor. I'm struggling with how to structure a deal like this so it's advantageous for the investor as well. If I use private investor money and do the rehab/refinance withing 6 months and pay him all his money back, is it really worth his time/money? How have you structured these deals in the past? If I give him half the rent for the first 6-12 months before refinancing then I'd be paying half the mortgage out of pocket. Unless of course the rents are at $1,000 and mortgage at $700. Is that the ultimate goal? Thanks again guys!

I heard a podcast recently talking about the BRRRR strategy. It seems like a great option but I have some lingering questions and hoping some of you who've had experience with this approach can help.

Example: I buy a fix'n flip (with private funds) for $85,000, put $20,000 into repairs, and the final appraised value is $150,000. I would then go to the bank and get it refinanced. At 70% that would allow me to cash out $105,000. The next step is where I'm uncertain of what to do with the cash. If I pay back the investor, then I essentially take on a $105,000 debt through the bank from the refi. Which doesn't get me anywhere b/c I could've just taken out a conventional loan from the beginning. If I throw the proceeds into another property, then I'm not cash flowing anything from the original purchase since the investor is being paid out a monthly interest rate (which is all the rent money). I feel like there is something missing that I haven't heard or discovered yet. f

Does the same scenario change at all if the purchase was made in my name using a HELOC?

Any tips? Much appreciated...

Thanks @Omar Khan for connecting @Dave Foster and I. That helped clear up the lingering questions I had related to 1031 exchange. Also, thank you @Alan Rohrer for your input. Much appreciated!

That's exactly what I was wondering. Thanks for the explicit response. I feared that would be the case but such is life. Is there an advantage to paying the capital gains immediately after a sale vs. using those funds to purchase a more expensive property and down the road pay for the whole gain down the road? Other than by holding off on paying for capital gains allows you to keep more money for a bigger purchase?