All Forum Posts by: Chris Tarpey

Seems to be that your partner is putting up more money/risk and handling renovations. Did you find a partner to agree to this already? If not, I would consider having a "silent" partner fund the acquisition and rehab, acting as your lender, and you manage the rehab of the property, working together with the. bank, since he holds the note.

Consider maybe a private lender (friend or family) member, who you can bring the deal with a thorough analysis on your numbers and plans for the property, showing that if you had the money, you would be able to execute this project.

Then simple offer them interest on their investment, setting up similar terms of a HML/bank without actually having to go to the bank, because your partner is acting as such.

Depends on the loan terms that the hard money lender is offering (downpayment, points, interest rate, misc fees and closing costs). A BRRRR HML may require 20-20% down, 10-13% interest and anywhere from 1-4 points. This can fluctuate based on experience, liquidity and credit worthiness.

Many HML will also base their lending off the ARV. For example, they may not lend beyond 70-75% of the LTV (loan-to-value).

$50k is a good sum to start with, however with a 20% DP you are looking $40k. After holding costs, closing costs, appraisals, rehab draws and other misc fees, that is extremely tight!

You may want to go after a property with a cheaper PP, or partner up with someone to bring additional funds (depending on the ARV).

If your goal is to just buy a few rentals and pay them off then buying cash may be the way to go, however if your looking to build a decent portfolio of SF/MF properties, then it is best to leverage your resources. Particularly when it comes to the owner-occupant loans available to you (if you have not used those yet).

A wise man once said: " If you owe the bank $1, that is your problem. If you owe the bank $1M, that's the banks problem...(something like that)

@Jaime

@Jaime Bisbey I would only be concerned renting to students in the current climate. Many schools are offering online class options due to COVID-19, and what would usually be a profitable option, now may be hit or miss depending on where you are looking to set up your student rental.

With the current funds available to you, depending on the market you are investing in, you could use the BRRRR strategy, combined with hard/private money to give you the momentum and cash flow to exponentially grow your portfolio!

At the end of the day, there are many options available to you, don't feel limited by your experience or liquidity, just approach the problem with "How can I get this done"!

My partner and I have a property in Jacksonville, NC right around the corner from Camp Lejeune that would make a great Airbnb. The property is a 3 bed 2 bath that would require around $25-$30k rehab. The purchase price for this property is $66k with an ARV of $125-$130k. We have sourced a HML but between downpayment and other fees, we would need private money assistance. We are also open to a private lender funding the entire project in place of the HML for a low double digit interest rate. This would be our 4th Airbnb rental, our experience and management/contractors are in place, we just recently simply had a funding shortfall. Looking for help!

The seller is definitely going to want more than 4% interest. Assume that as you ask questions on your end, they are also researching ways to get the best deal, so they may see that on loans like this 8-12% interest is not unusual. They would also want a much shorter loan than 15 years, I would expect that they would ask for a balloon payment in 5-7 years as Aaron mentioned.

Being that you don't have the downpayment isn't necessarily a means not to pursue a deal, but do you have a funding set aside as an emergency fund? Figure that when you walk in the door (any door) there will be things that need to be upgraded/replaced.