All Forum Posts by: Dane Silchenstedt

I know very little so correct me if I’m wrong.

Hard money (HM) loan is usually 75% of ARV.

-so an ARV of 330k give us a HM loan of 247k if purchase price is 250k. Not enough to cover upgrades.

This is my struggle and why a proper ARV is so important. How do I get a strong ARV Prediction?

Traditional loan is 20% down and repairs out of pocket or some other form of home repair/HELOC loan.

-so 50k down and 20k repair, plus all the other fees associated with home purchase.

I’m trying to get through this in my head and see the right choice.

Is there a way to make this work. Facts: 3/2 layout, fiberglass pool, 1446sqft. Windows need replacement, upgrade flooring, upgrade kitchen, upgrade all fixtures and fans, and upgrade out side landscape

The home is listed and the agent called me because it’s been on the market for 90days, which is almost unheard of right now. She also knows the seller is personally distressed. She showed me the house and I went and looked it up to start understanding the property better. It won’t be a direct deal, the agent brought it to me. The agent knows it is severely overpriced but thinks the seller is in a position where she might take a big cut in her asking. A distressed seller with a cosmetically distressed property sounds like potential.

Question 1. An agent gave me an address of a potential deal. I am not looking to cut anyone out or be deceitful at all. I want to help this agent make money. Question, is it okay to contact the seller? I searched the address under tax appraisals and found the owner. A quick google search gave me her contact information. Just wondering about the etiquette of this? I'm building relationships right now and don't want to make any silly mistakes. I have learned this sellers husband recently died and they were retired.

Question 2. Do you guys have any tips on how to proceed through the agent and structure our approach knowing she was widowed in dec 2020? Her price is way high. I am going to cut her asking price in half. Her asking price is top price if everything was fixed and in top condition, it is not.

I've been setting things up to use hard money for a BRRRR project because they usually don't qualify for a traditional finance option. What if I got a good purchase price on a property that could qualify for a traditional loan? Any reason to continue with hard money over traditional? ARV 340K, purchase price 250, rehab to get it to 340k would be about 30k. I was thinking 20% down, rehab out of pocket and then finish out the BR,rent,refi,and move on. I actually haven't decided if I am going to flip or rent, rent would be about $2100/month. This deal with these numbers doesn't quite hit the 1% or the 75% to LTV rules. I haven't even put my offer in yet, just thinking it out in case they actually take the offer. The sellers are going through a divorce and have priced it like it is in mint condition.....so we will see.

@Jim Kalish Thank you this helps clear up BRRR vs flip. When I put you and Ashley's response together it makes a very clear picture.

@Ashley Cross Thank you very much for your reply. Very helpful.

Okay, so I found out who got the property under contract and it is an actual agent working with a realtor company. This place is too beat up for a normal realtor to want so I contacted them and asked what there plan was with the property. He said he wasn't sure and he'd get back to me. He said often times they sale to whole sellers or people wanting to fix/flip. Now I have a middle man to deal with but if he offers a good enough price I think it will still be worth it.

We have an LLC set up for properties but from reading books/BP site and listening to BP podcast, we were under the impression to purchase as individual outside of LLC and transfer into LLC once refi is done. We have a hard money lender in place now. We are starting to work with a title company for seller agreements and contracts. Any thoughts?

My wife and I are starting to purchase properties. We bought our personal residence with both of us on the loan. Now we are looking at buying our first rental/fix and I am wondering if we should both be on the loan or if it makes sense to only put one on the loan if finances allow? Since we are buying close to home I think our future loans will be labeled as investment properties. Does it matter at all if we are both on the loan or should it be just one? We want to expand fairly quickly over the next 5 years with BRRR and maybe some fix and flips. We both have great credit and decent 1099/W2 income.

I lost this opportunity. Another more prepared buyer stepped ahead of me. This was a good one lost but I learned a few things and will be more prepared next time. Thank you all for the recommendations. Very helpful.