All Forum Posts by: Casity Kao

@Brandon Jurczyszyn  Find the people you want to model yourself after and ask what they would do?  Considering that student loans are a tax writeoff, and so is investing in real estate, it does not make sense to give up any power you have of compounding and making your money work for you.  Millionaire real estate investors focus on leverage not debt payoff.  Unless your student loan interest rate is out of control that is only situation I'd consider, and if that were the case I would seek refinancing before considering paying it off.  With 16k left you can make that off of one flip.

@Shahdan Calcuttawalla You may as well just use Zillow. No computer can give you anything more than a high level calculated value based off of comps because they cannot factor in condition and things about the listing that are important to where it would sell. This can be a good reference point, but for example in my area there are a lot of homes with basements that are not finished that can be, so the websites may price the home at a 2/1 but by finishing the basement I could make it a 3/2 which completely alters the ARV. I am not sure what your purpose for wanting this type of site is, but your best bet is to have somebody actually see these properties and do comparables yourself based on like condition.

@Taylor Shapiro What documents have they provided to you on the expenses?  Did you get a trailing 13?  There is some skepticism on the return and a broker sending it to you because if you are not an experienced investor and this deal is as a good of a deal as you say it is, then how is it still even available.  Are you tight with the broker or are they newer? Fundamentally the deal sounds good, but I don't see anything that breaks down the expenses and your expense ratio seems on the lower side although could be right and that's what you really need to dive into.

@Cara Lonsdale You need to find a new carrier, because there are carriers that cover.  My broker set it up that way because he does 80 flips a year, so wanted to make sure for his own purposes it is covered.

@Brandon Mix Hard money loans give greatest consideration to the asset and the experience you have to develop the asset. If your credit is not great it may influence a little but they care mostly about your ability to flip, skin in the game, and the margin you have to make a profit and pay them back. I would personally suggest using a broker to facilitate your first hard money loan but find out how they are paid. Do they charge over and above for does the HML pay them. For example lendinghome and a lot of the major hard money lenders in the country will take discounted points if you use a broker to facilitate the loan but you will still end up paying more, because you want to make sure it goes through smoothly if you are on a tight time frame. If you are not on a tight time frame to close then I would not use a broker but considering most of time hard money loans are involved with cash offers I am making the assumption you probably have 2-3 weeks to close. To give you a specific example of hard money lender we used, lendinghome would have charged 3 points on the same deal, but because a broker we paid 4 points total, in which 1.5 went to broker and 2.5 went to lendinghome. Once you have done a deal with any of the HMLs your profile is loaded into their system and the underwriting process is cut by 5 days so you should be able to facilitate the deal yourself and you will also know the flow of what they will request. Another thing to consider is whether you want to use a HML in your time zone. If you working with a HML on the east cost that could make it easier because if they request information you need you could done before you go to work if you have a W2 job. If you are available at all times I would definitely go with an HML in your time zone as it also makes it easier working with the title company where everybody in on same business hours.

@Cara LonsdaleWe get around it because the offers are in my husband's name or in an LLC which is single member. Your answer does not apply to us;-) We did this a number of a years ago because it was easier to work with for DTI calculations. That allows my husband to buy property with just debt on his credit and not both of ours so we can individually max out the amount of debt we can take out and have independent exposure. Working in banking we had ran into all sorts of issues where our clients lost their home where both were on the mortgage and it was not necessary which made it nearly impossible for them to purchase a home. For example, we had a client that's home was on a ton of clay and during a drought the home literally split in half because the soil shrank and no insurance would cover it so the bank of course foreclosed. Had it been just in one of their names only one person's credit would be spared so we have always taken the same approach, we recommend to our clients. I can go into more detail but being a realtor I assume you know the advantage to this.

@Jason Waldo  If you are happy with 1800 a month of cash flow then pay them off but if that doesn't get you to your goals which I assume are much higher you have to be comfortable with debt to grow your business.  I would leverage to some degree and get more rental properties by cash out refinancing, or pay them off first and take out a line of credit so you have access to "cash-like" funds.

Have not heard this before but good question to ask.  I just verified this and ours are all covered.  All of our partners we work with our investor friendly.

@Catherine Brennan Referrals from people you don't know?  How is that a good referral?  A lot of people faking it on Bigger Pockets so if it was a referral from someone you are familiar with I could see that but you have to vet the person giving the referral then as well.

@Shawn Wade  I am assuming it varies a little bit by state but where I am at they can be considered the same thing and meet rental housing code as long as the passthrough door is steel and is a dual locking door meaning it is a key lock on both sides.  I would check with the city if you can convert a single family home into a duplex but in most cases there is no problem because 1-4 units is still considered residential.  At the same time you may want to see if you can create a new address for the extra unit you are creating.  The lease can be tricky because you likely do not have split utilities so I would probably just have a new meter put in or if they unit is very small I would include utilities.  You can try a prorated rent, but I've had mixed advice and results in regards to his.  You can also consider airbnb or home away rentals.