All Forum Posts by: Daniel D.

If I remember correctly and @Andrew Postell is more knowledgeable on this than I am. When you refinance, it is either 70% of the purchase price, or 75% of the appraised value. Whichever is the lower price. So in your case would be the purchase price.

If that is the case then, how much would i be getting approx if i refinance? I would love to hear from @Andrew Postell

Thanks

0 Votes

I think i may have messed up the #'s here a bit :/. My main point when i was buying this house, was can i make a decent profit if i rent it out all out. That's all, i never thought about refinancing or any of that. These are the #'s:

House was appraised at 350K when i was buying it. I got it for 330K. I did all of the renovations and now the house is appraised at 390K.

I put 66K down payment, and about 10K for closing costs. Also another 9k for rehab. So that puts me at 85K of my own money spent.

Maybe im not understanding how the refinance works:

So as far as i understand, if the house is worth 390K, and i owe 264K on it the difference there is 126K.

Wouldn't i be getting 70% of the 126K which would put me at almost 90K?

Thanks

Originally posted by @Joseph Holliway:

Maybe I ran the numbers wrong which is very possible, but your numbers don’t make sense.

70% of the ARV (350) is $245,000

20% down of $245,000= $49,000

Closing cost-$9,000

Rehab- $9,000

Making your purchase price at $178,000 to meet the 70% rule.

Making tour new net worth at $212,000 if I ran the numbers right.

Why did you purchase the property for so much? I dont know your market obviously but the numbers don’t make sense to me, can you explain them so I can understand them better?

1 Vote

Originally posted by @Joseph Holliway:

Congrats on the remodel. What route did you take for financing both the remodel and the rehab?

Small Break Down:

House was appraised at 350K.

I purchased the house at 330K.

Put 20% down + Closing Fees 75K Total

The complete renovation for both the 2nd floor and the attic as you see in those pictures cost me about 9K in materials. The labor i'm not counting because i did it all myself.

The house now is worth about 390K.

It's currently making me about 2K a month in profit from renting it all out.

The down payment + renovation was all of my cash. So all in i probably spent about 85K + my time. When i refinance i will probably get about 90k to use to purchase another property and will have a property that is making me almost 2K in profit a month.

Let me know if you have any other questions.

Dan

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Hey Everyone.

So last year, around June i got into Real Estate Investing. As of today i have purchased my 2nd rental property. On this one I actually decided to take pictures of my renovation since the 2nd floor of the house that i got in Northern NJ was in very bad shape from the tenants that were there before.

I ended up renovating everything on the 2nd floor and attic by myself and a few friends. No contractors.

I want to save my money to continue buying real estate and since im pretty handy, i decided for the first few houses to do everything on my own. Yes it takes me 1-3 months to renovate it, but i save a ton of money.

BEFORE:

https://ibb.co/0mKzpW9

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https://ibb.co/MPLrrtS

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https://ibb.co/tKmPhXK

https://ibb.co/rbcgLSw

https://ibb.co/HPvYS1R