All Forum Posts by: Carini Rochester

I did something very similar about 5 years ago. I could not finance out because the bank appraiser appraised the house for $28,000 after I had about $45,000 into it. I thought it should have appraised for about $50,000. I have had it rented and it cash flows nicely (no mortgage!) Banks are very skittish about mortgaging in this neighborhood. My guess is that they somehow communicate to the appraiser that they (the bank) wants a low appraisal to give them a legal reason for not doing the mortgage. 

My guess is that a buy and hold will give you a nice cash flowing property. How to get your money out? I don't know. 

The current owner may (probably) will the want lump some at some point. Often there will be a balloon payment in 3 or 5 years. Get your refinancing then. Both the buyer and seller will talk to their accountants/tax adviser about how to structure the deal for tax advantage.

As the debt-to-income problem looms (after a few purchases, you could move to multi-family investing, mixed-use investing, or commercial property purchase. Pursue commercial lending for these. The commercial lender will be more concerned about the property's ability to cover the mortgage payment (they look at it more like a business) than they look at the debt-to-income ratio.

Seems to me, for BRRRR to work well, you need to fund the purchase and the rehab. without bank funds (your own money, a partner's money, hard money loan) then get your money back with the refi. No 12 month wait.

That strategy makes perfect sense. Obviously, your house, the roof over your head will be on the line. Be sure that you will be able to make the payment even if the the investment property doesn't work out perfectly (like, one of you has a good paying, secure W2 income, for example.)

Nice job.

Sounds like, once you refinanced these properties you got your $20,000 back, maybe even the refinancing put some extra money in your pocket? If you tripled the value of the properties, you shouldn't still have $20,000 tied up.

No.

The BRRRR method provides a way to achieve lower funds out-of-pocket, even zero, even puts money into your pocket. But it requires more intelligence, more hard work, and more risk to the investor than filling out a loan application.

I don't see why you would need to form an LLC to issue a 1099. It's a pretty simple form to fill out.

Questions like these should be asked of your accountant and/or tax professional. Put a team together and use them for what they are experts in.

You've put yourself in a tough situation. Hindsight being 20/20, here's two things you should have done: 1) do your Cap-X immediately after closing. 2) Put your team together before, or as soon after buying properties as possible. The team clearly needed to include a HVAC company that could respond quickly. 

If your electrical system can handle it, buy more electric heaters. Do some research and only get the safest ones, least likely to start a fire. Get enough of them so the tenant can adequately heat the apartment.

Talk to your insurance agent about what, if anything, your insurance will cover for temporary lodging for them.

Call all the local HVAC supply houses until you find one that has a suitable furnace in stock rather than wait for one that won't arrive for two weeks. With enough phone calls, you might be able to find a supplier/contractor who can respond faster than two weeks.

You may have to lower the rent for a month and/or help cover lodging.

Clearly communicate all that you are doing, and what the problems are to your tenant so that they don't thing you aren't doing anything and just don't care.

Gut and re-hab a small residential bathroom: $10,000 - 12,000. Backlog of a couple of bath remodelers in my area, 12 months.

(Price may vary!)

Contact a local bath and kitchen contractor and ask for a quote.