All Forum Posts by: David Koopman

@James Gardner @Franklin Fletcher thanks for the welcome. I'll check out the next AZREIA meeting. Hope to meet you. I'm just south of the texaco stop on Williamson valley also, we're neighbors! I'm looking to do some passive ri while maintaining the 9-5 job. I have some cash saved so doing a cash purchase, rehab, then hold and rent, then refinance, repeat, goal of 4 per year.

The firey hoop stinks. What I had to turn in for my latest primary res purchase was like an audit from hell. Finally worked, after w-2s, taxes, months of bank statements from every account, credit report, letters of intent, months of paystubs, p&i statements for llc, repeated inquiries about my full time jobs bonus structure, utter confusion over vested stock options, multiple statements from brokerage accounts, more paystubs from specific periods (to understand bonus vs option exercise). They way they kept asking for more and more and more, it seemed they didn't believe me and kept trying to catch me in a lie or something. It was obnoxious. I can only imagine it getting worse with partners and/or more income from investments. What made my case hard was big swings in income from year to year due to bonus and options. What made me mad was I should have qualified using the lowest amounts. It was like it was a major problem that I made more money one year. So, anyway, the point is, for the BRRRR strategy to work, need to refi... I hope Ross's experience on BRRRR refi and mine on primary resi isn't the norm. I'll be looking for a lender that will qualify my loan on some basics and not run me through the ringer.

I keep seeing articles about conventional loans for 5% down. Could this be an option for his rental?

FHA loan with 3.5% down? Or does that only work if it's your primary res?

All helps... My 2nd home (primary res), I had to sell fast. It was July 2014 in Phoenix and the market dipped right when I listed. Appraised at $440K and I sold for $335, after listing at $420, then dropping price drastically every week till it sold. I bought it in 2003 for $255 and only owed about $140, so I still walked away ahead... If I could have stuck it out and waited a month or two, I could have got $400K. The zestimate is now $422K, by the way. So, if at the time, $400K was the FMV, and I sold for $335K, that's about 85%.... So, yeah, you're right, 0.7 is too aggressive. At 0.85, someone will snatch it up fast. I like looking at the sales history of houses. If the seller has a ton of equity, they might be willing to sell for 0.85, easier than someone that must sell for full price just to break even. You never know who is motivated to sell, tho. I think I'll start making some 0.85 offers and see if I get a bite.

I like the (ARV * 0.7) - Rehab Expenses = purchase offer formula, thanks. If I can fund the project from purchase through rehab, then refi and be essentially even at that point, then I can rent for cash flow or sell for immediate profit. I like the idea of hold and rent for cash flow. If each one takes 3 months, theoretically, could own 4 homes in a year, bringing in conservatively $300/mo net cash flow / mo, would be looking at $900/mo in supplemental income with immediate and growing equity in the homes. Sounds great. The trick is finding the homes. I'll keep hunting until I find my first. Nothing in my area is listing at ARV*0.7-Rehab cost, so I'll need to start making some offers until one works.

Thank you

@Luis Roel, @David J., @Edward B., @Tony Gunter, @Chris Eaker for the responses.  The up to purchase amount might be of interest. I can self fund 1 purchase and rehab, but then all my cash is tied up. If I refi, then I have cash again. What might work is purchase and rehab 1 for cash, then refi for purchase amount and I'm only out the rehab costs, but then generating monthly income via rent, and more b/c I borrowed less.  Repeat, repeat, repeat and I'm on my way.

I'm new, have yet to do a deal, been studying the BRRRR strategy and have a newbie question: Why must I wait 1 year to refinance? Once the house is rehab'd, why can't I refinance right away? Does it make a difference if the original finance is hard money vs private lender vs my own cash?

Nathan Paisley wow, what a trip that must have been. Thanks for sharing. I attended yesterday's webinar and became a BP pro so I can do unlimited BRRRR calculator analysis.... I think I'll hunt down a BRRRR property for my first. The hardest part is finding the properties. I'm searching Zillow and realtor.com and craigslist and nothing looks great. I'm going to have to start seeing some properties, try and meet the owners and find out what's motivating them to sell and make some offers they're not going to like at first. If I pay asking price, I'll lose money. I'm aiming for 12% cash on cash. I have access to private lending at unbeatable rate - just have to find that first property to break the seal.

@Nathan Paisley - don't have one yet, I'm prepping the logistics (website, bank account, llc, etc) for rei. will be one of wholesale, rehab, or rental.  likely wholesale.  I was wondering what your first deal was like and what got you to go for it?