All Forum Posts by: Christopher Huber

@Rick Pozos Thanks! That's what I'm thinking. Just didn't want to get too excited and miss something. Feels too good almost

Hello, I purchased my home in 2021 for $38,000 and put about $40,000 I to renovating it. It is now worth around $165,000. I have a loan through a private lender for $70,000 at 7% over 15 years. I would like to get my private lender paid back sooner than later but was not able to get my house refinanced before interest rates shot up. My bank offers a program where they will give me 80% LTV at 4.5% variable rate interest. The interesting thing is that the 4.5% is locked in for 10 years.

I've always been told to avoid variable rates but if it's essentially a fixed rate for the first 10 years, is it a bad idea to go ahead and refinance with them and just expect to refinance again before the 10 years are up? Also, it's my personal home and I expect I'll probably sell it within 10 years and collect tax free gains (although anything can happen). I haven't decided yet if it's better to sell or refinance and hold but the point is that I have multiple exit strategies for this loan.

If it was fixed rate it would be a no brainer but I'm trying to figure out why I shouldn't get the variable rate loan and just plan to exit that loan before the 10 years is over.

I'm about to start my second year of investing full time and trying to learn as much as I can. Thank you for any advice or feedback you can give me!

Here's an update on this now that it has been completed. I ended up all in at ~$83,000 and my ARV is now $165,000. Unfortunately, I wasn't able to get a refinance before the interest rates shot up, but this is my personal home, so I plan to live in it a couple of years and sell it to collect the gains. If a good opportunity arises, I may still refinance so I can pay back my private lender, but he doesn't mind me just paying him monthly either.

Investment Info:

Single-family residence private money loan investment.

Purchase price: $38,000
Cash invested: $32,000

Bought this single family home intended as a live in BRRR. We plan to refinance it in the next month or two as the renovations are nearly complete.

What made you interested in investing in this type of deal?

Didn't qualify for conventional loan due to my student loans. I wanted a house I could add value to and found this. Then had to figure out how to finance it. Hadn't heard of Bigger Pockets until after this purchase.

How did you find this deal and how did you negotiate it?

It was off market. My brother told me he saw the for sale sign. Negotiated face to face with the home owner.

How did you finance this deal?

Private money 100% purchase and renovations

How did you add value to the deal?

Replaced rotten floor joists, brand new bathroom, new kitchen, new electrical, new plumbing, new paint.

Lessons learned? Challenges?

Lot of work to do myself. Would rather hire a contractor and get it done quicker.