All Forum Posts by: Chris Barrett

It's a gamble, you're assuming that rents and property values will continue to appreciate. Will they? Most likely.  I haven't bought anything in the past 1.5 years because I haven't found anything that both cash flows now, and will continue to appreciate. I get 10% on my money private lending, so making less than 10% while also having the risk and work of owning a rental... doesn't make sense to me. 

So if I were in your shoes I would want to be really confident in the exit strategy. 1) confirm rent estimates 2) confirm ARV and the demand in that area to buy a house like that in the price range 3) are there banks willing to refinance at the LTV you want with the seasoning period you have.

40k for a house of that size that needs that work would be the cost of materials alone where we live in WI, so verify your estimates. However, if all else holds true and you can get it for 110k and costs are 40k besides holding costs - I'd go for it personally. 

@Roy Gottesdiener The way I see it if you don't want to sell, you have two options: wait for equity to grow and for your saved income to accumulate or use other people's money. Build relationships, meet other investors. Maybe find private lenders who would be willing to use one of your properties as collateral, since you have perhaps a 60% LTV with the bank, someone could lend on say 25% of that equity. I'm a private lender locally and I'll take on 2nd positions behind banks, as well as use other mortgage notes as collateral for my lending.

There's less people buying 2 flats, therefore there's not as much competition to buy. A comp based appraisal is going to be based on comparable sales, so yes. 

You can do all that before the tenant moves in?

Personally I would leave the 15k in the property and have more of a cashflow cushion while also having an infinite return on your money. 

How could you add a bedroom in 1 week?

I have a call with CAFIMO tomorrow, and while I'm not planning on doing a refinance based project right now, I'll ask about this and see what the broker has to say now. :) 

Don't Refi - at the very least get a 2nd mortgage and keep your cashflow closer to 350 a month to have a buffer for repairs and cap ex. Keep that 2.75 mortgage as long as you can. 

Technically in 2 years they will be selling the house to you, so it's not a HELOC or a cash out refi or anything else, it's a purchase where they are selling you the house for the price they paid 2 years ago and you need to finance it at at least that amount. That means you need to have the house be worth 20% more in 2 years than when they purchased it (unless this could be your first house, and you can get a 5% down loan, etc)