All Forum Posts by: Darrell Bratton

@Kerry Baird Thank you so much.

I am refinancing a portfolio and instead of a cash out refi, I am pulling a property out of the loan that equals the equity in the portfolio. My loan amount stays the same + plus closing costs and a higher interest rate, but I am getting better terms so the increase is not much. How best should I use the free and clear property to put a down payment on my next deal? Should I HELOC it or use it as collateral and put it in the loan with the next deal? I would like to keep the house as free and clear with some sort of HELOC so that I can sell it if I wish to as opposed to having it as part of a portfolio again. What are my best options?

The trend that I am seeing is that money is tightening up and banks are playing hard ball with lending money. Even with a prior relationship and documentation, the loans are hard to get.

Investment Info:

5 single family homes

Purchase price: $300,000.00

Cash invested: $42,000.00

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

I am growing my portfolio for retirement income, with the 5 year goal of 100 doors.

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

I found this deal through a new realtor that I recently met. She is helping me, in conjunction with the broker. I accepted the deal immediately and then figured out the financing. The portfolio appraised for 50K more than the sales price.

How did you finance this deal?

I used multiple lines of credit to get the 42K. I will use my teaching income and cashflow to pay off the lines of credit ASAP.

How will you add value to the deal?

Only one of the five needed some rehab and the other four have renters already.

What was the outcome?

I am at 26 doors as I have two other portfolio loans with the same community bank.

Lessons learned? Challenges?

My challenge is not having partners and trying to scale on my own, while keeping 30% equity. Also, prices are rising and so are interest rates. It may be time for me to do a 1031 exchange so that I can continue to scale. I have learned that I have to trust my team. My team is my, realtor, broker, banker, property manager, lawyer, and insurance company.

@Ramon Jenkins Thank you. I am getting base hits. I will settle for that. I am growing faster in the last 6 months than I have in the past 18 years. I have multiple phases of my strategy coming together.

@Greg Farabaugh I am going to sit down for a minute and use the cashflow to pay down the loan so that I reuse my equity to take down bigger and better deals. I am going to live off of my government pension and invest all cashflow to buy more real estate. I would be fine to pay off the 21 doors and live off of that, but I want to scale as quickly as possible and then start paying them off.

@Brian Garlington I was born in Richmond and grew up in San Mateo. My family is still in Richmond and Oakland. I would love to learn more about Multifamilies in Oakland. We are connected so I would love to email and set up a time to talk.