All Forum Posts by: Christopher Blanco

How much are you saving every month?

I would think a service like Thumbtack would be better than here. 

@Andrew Postell that's interesting because that is not what my mortgage bank told me on my personal residence. My personal residence's deed and mortgage is in my wife's name. She wants to put me on the deed, the mortgage company will ONLY consider that if the she is also on the deed. They said  her name had to be on the deed if its on the mortgage. 

Sorry @Karim Conway for hijacking your thread.,

@Jon Kaufman I would highly suggest you getting a W-2 job again AND doing real estate. Do you have a bucket of cash because without a job, you won't be qualifying for many loans. 

@Andrew Postell isn't the Due on Sale clause a problem when transferring names on a title? Also couldn't that technically be considered mortgage fraud?

I have been looking at doing just that and I am happy to share what I have found:

1. It is very possible, and can be very profitable to use HML with high leverage.
2. Call as many different lenders in your area and nationwide lenders and get a feel for who will finance into a LLC and what their seasoning period is.
3. Decide if this is an investment, or a business. If this is a business, don't let the high cost of a HML scare you, especially if you can get 90-100% financing for the deal. If your goal is to refinance as quickly as possible you will be able to buy more properties and have a higher cash flow with the higher leverage.

I have an HML that will lend 90% LTC, then refinance immediately at 80% LTC or 70% LTV after a year for 10,15,or 30 years. No loan floor. What that does for me is as follows:

Assume I have 50K cash to start with, also assume each property I buy for 45K and plan to put $5K into it to make it rent ready. Assume I want to leave 10K in cash for reserves, in year 1 I can purchase 5-7 properties and begin to rent them out. Lets also assume the ARV on each of these homes is 80K. After a 12 mos seasoning, I can refinance each of my 5-7 properties at 70% ARV. That will pull $56K out of each property, $6K (as much as 42K) in cash for each property comes to me. At the end of year two I can have 10-15 properties cashflowing.

Looking at traditional commercial loans (what you need to close in an LLC) they require 25% down at least and at most will only go 15 year notes at this low of a loan. So lets take the same assumptions (50K in cash to start, homes for 45K with 5K repairs, 10K in reserve), I can only buy 3 houses. At the end of year 1 I refinance each of my 3 properties pulling 55K in cash out of my 3 properties. But at the end of year 2 I only have at most 6 properties cash flowing, instead of 10-15.

So its a longer road with HML and more up front cost but play this scenario out (I have with some spread sheets) over 5-10 years and you be amazed what that leverage does for you.

If you want "guru" training, start networking in  your area. You will find all the advice you need. Work your relationships and get around people who are really doing what you want to do. These people won't be selling workshops, they will be buying/selling/renting houses. 

I had 90 minutes one on one with a guru yesterday. Cost me $36 at Cheesecake factory for lunch. I learned more in 90 minutes than I learned in 90 days, and actually may have gained a business partner. 

Depends on who you are marketing too. My absentee and "driving for dollars" letters are simple "I want to buy your house as is, call me". My letters to probate cases are longer and more gentle offering my services to help them. 

Buy a 4 plex, live in one and rent out the other 3. 

Its going to depend on the bank. I have talked about 6 or 8 lenders, every single one of them had different terms, different seasoning periods etc. I have one HML which has a great BRRRR product, but their seasoning period is 12mos. One bank has great rates, but their seasoning period is 2 years!