All Forum Posts by: Casey Adams

 Awesome info. I'm close to the 60 days so that's why I'm looking into options. I was hoping a local bank could help but they aren't very good at returning calls apparently to get free money from me haha. 

I will continue to shop around or wait for a tenant then weigh as well DSCR.

Thank you everyone for the good info! The current DSCR is 1.023 so I might be able to go that route. It'll rent probably within 2-4 weeks.

Thank you very much for all the responses! I'll try to keep you posted

Hello!

Rehab ($25-$30k) on my first BRRRR is coming to a close (Purchased mid January) and I am now hunting down financing. I paid cash for the property and am looking for an 80% LTV cash out refinance. I got a quote stating that they could give me an LTV that would cover the purchase price of the house + closing costs ($86k), which is roughly 66% LTV.

The ARV of the townhome should be roughly $130k. So here's my question:

Is it normal to take a pre 90 day LTV to recoup the purchase cost, wait the seasoning period, and refinance the rest of the cash out at a later date?

Or is it better to wait out the seasoning period with your loan balance (I used a HELOC so no hard money lenders or balloon payments) and just refi out in 6 months?

Also if any lenders in the Memphis area have advice it would be appreciated! Thank you ahead of time for any advice!

The first lender I spoke to essentially said 12 months seasoning is all they offer, which would be really unfortunate for my time frame on getting into another property. Is that a standard thing or just simply what one lender might offer? The other two I reached out to did not return my calls as of yet.

Thank you!

Casey

UPDATE:

I was just told by the bank I got my first quote from that the seasoning period, even if I bought it in cash, was 12 months for more cash than what I paid+ closing. Is this accurate, as I have not encountered anything concerning 12 month seasoning periods, especially for cash purchases.

This really hurts my turn-around and portfolio building timeframe if this has become standard (which I have not heard of a 12 month seasoning period during any research nor listening to any podcasts).

Thanks!

Hello!

Rehab ($25-$30k) on my first BRRRR is coming to a close (Purchased mid January) and I am now hunting down financing. I paid cash for the property and am looking for an 80% LTV cash out refinance. I got a quote stating that they could give me an LTV that would cover the purchase price of the house + closing costs ($86k), which is roughly 66% LTV.

The ARV of the townhome should be roughly $130k. So here's my question:

Is it normal to take a pre 90 day LTV to recoup the purchase cost, wait the seasoning period, and refinance the rest of the cash out at a later date?

Or is it better to wait out the seasoning period with your loan balance (I used a HELOC so no hard money lenders or balloon payments) and just refi out in 6 months?

Also if any lenders in the Memphis area have advice it would be appreciated! Thank you ahead of time for any advice!

Casey

Quote from @Sharma Parth:

Quote from @Casey Adams:

Quote from @Sharma Parth:

Hi guys - would love any feedback on the below numbers I am crunching on a potential BRRRR deal.

The plan is to hold on to the property, rehab it, rent it, and then do a cash-out refinance. Not looking to do a flip here.

I'm a rookie too but for every estimate I've done and ran by the team that helped me secure my first property (just closed two days ago!), I was setting aside 5/5/5/10 for the place concerning vacancy, maintenance, PM, etc. and was told that's fairly accurate.

In my market that cash flow would be nice. Another wall I just hit that I'm navigating is I apparently underestimated Landlord insurance cost, which is biting into my bottom line.

Just considerations I'm finding! Good Luck!

Hi - Thanks for the reply - 

What does - 5/5/5/10 mean?

Expenses: 5% vacancy. 5% maintenance. 5% misc expenses. 10% property management.

Good luck! 

 Thank you very much for the information!

I spoke with several agents while going back to USAA if GCs and workers were covered on their Rental Property Insurance During Rehab and Remodeling and they assured me that it covers contractors on site while they are working on the home.

It is a vacant property so I don't have to worry about tenants luckily. Also to my knowledge and from the initial GC evaluation, there was no fire or water damage. 

I'm hoping it's enough. I also opted for $1m liability just in case anything goes awry.

Thank you so much for the information! I will keep these things in mind going forward as I deal with different types of distressed properties.

Update:

I massaged the numbers with USAA and by maxing the deductible ($10k) I was able to fall within my estimates for this property. I shopped around with several insurance brokers and none were able to match what USAA offered with that deductible and the benefits I received.

I use USAA for my own home and vehicles too so it was overall the best deal even if that was not a consideration!

Thank you everyone for the help and input. It's truly appreciated!

Quote from @Sharma Parth:

Hi guys - would love any feedback on the below numbers I am crunching on a potential BRRRR deal.

The plan is to hold on to the property, rehab it, rent it, and then do a cash-out refinance. Not looking to do a flip here.

I'm a rookie too but for every estimate I've done and ran by the team that helped me secure my first property (just closed two days ago!), I was setting aside 5/5/5/10 for the place concerning vacancy, maintenance, PM, etc. and was told that's fairly accurate.

In my market that cash flow would be nice. Another wall I just hit that I'm navigating is I apparently underestimated Landlord insurance cost, which is biting into my bottom line.

Just considerations I'm finding! Good Luck!

 Also... since I have 1-2 months of rehab on this property would builder's risk insurance be more apt than landlord until I get a tenant inside?

I am sorry but I did not know this was a thing until today.

Thank you!