All Forum Posts by: Devin Williams

BG Peeps! 

👏🏾👏🏾👏🏾👏🏾👏🏾👏🏾Just had to share that we are under contract on our first property (single family, 3 bedrooms, 2 baths, basement and garage). 👏🏾👏🏾👏🏾👏🏾👏🏾👏🏾👏🏾

The details! (almost forgot to share) - note we have not closed yet so send all the good vibes this way.

COC (cash on cash return): 9.01%

Purchase cap rate: 8.19%

Monthly cash flow: $225

It is an estate sale that we plan to buy and hold and hold and hold. It is in fairly good condition in a decent neighborhood which also happens to be the childhood area for one of us. We'll need to build up equity for quite some time before we can consider refinancing. Was really hoping to BRRRR. In some ways we just really needed to get in the game and this is a low risk area of investment for us. Wondering if we should have held out of course for a better deal.... we will be out a down payment and rehab money at the end of this (~25k all cash). Considering getting a loan to finance the rehab if for no other reason to save cash.

Already thinking about our next opportunity but we won't have enough cash left to meet any funding requirements for downpayment regardless of the lender. The market out here has gotten crazy, multiple offers on homes in areas that would NEVER have been touched a year ago. It's unbelievable... Ideally we'd like to flip but those seem to be fewer and get sold over listing price now - even in C rated areas. It's madness out here. We don't have hundreds of thousands of dollars but thought we could get a couple properties underway with our initial cash, some financing and creative fundraising. It is proving to be a real challenge. Hard money lenders just don't seem to be an option here, can't find a reputable, responsive, nor available HML willing to fund our area and since we're so "new". We even went so far as to create an LLC a few months ago since that is a requirement with these lenders.

Going to finish reading, 'Raising Private Capital' but a lot of the ideas seems so far out of reach for us. Trying to read these books and listen to podcasts with an open mind but very aware of the level of "privilege" that is the undertone of many of these stories. Regardless going to try it all possibly coming up with our own formula by the end of it.

@Kaylee Pratt

Diligence by very definition this word means a  constant and earnest effort to accomplish what is undertaken. This is by far what we most value in all of the professionals that we work with. Having a diligent and conscientious realtor is second to none and very hard to find. this characteristic implies that they will be responsible, responsive, and do more than open doors. They will go the extra mile to ensure that their client is informed and protected about the real estate deal they are entering.

@Eudith Vacio house hacking is not something we think would work for our lifestyle. We are in our 40’s, 3 kids, 2 beagles, work from home, it’s complicated lol but if there is some luxury house hack we might be flexible there! Not really in the spot to live through another renovation in life.

Pretty sure we’ve built up some good equity on our primary residence though. Had we known about house hacking 10-15 years ago we’d have two properties already.

Hate to say no to any opportunity though so though it would be a hard stretch... maybe???

@Connor O'Brien attended our first meeting tonight! It was great.

@Jonathan Greene we’ve read otherwise

“That being said, it’s best to keep your interest rate shopping limited to a short window of time if your credit reports are being pulled as part of the process. There’s a chance that rate shopping could have a negative impact on your credit scores.” https://www.thesimpledollar.com/loans/personal/loan-shopping-heres-how-multiple-inquiries-impact-your-credit-score/

Credit rating actually is not that bad especially if the middle rate is the factor. However we weren't revelry turned down by a HML that loved the deal and led us on all the way to the paid preapproval (FidusFi) only to be told we didn't meet underwriting's criteria but they were not specific citing a list of possible reasons.

If we go the traditional route we will be very limited in what we can personally finance leaving us with only the rental option not flipping as we initially planned. There are deals to be made but getting fully funded seems impossible especially for a newbie. Many HML have also been hesitant about funding our first deal and requiring a lot of cash investment on our part like 50%!

So it is true they are telling us things we do not want to hear but many of these things seem quite unreasonable.

@Bob Okenwa well quite a few hard money lenders are not open to lending in my area (Gary/Merrillville). We ran into a few unreasonable conditions such as 54.19% LTV and 12% interest rate. Really thinking we need to work with a HML due to the need to fund the rehab for flipping but we may have to change strategy and go the more traditional route.

We are ready to go did the education (ongoing of course), saved a decent down payment, found a couple properties that make very good deals, but are stuck at financing.... so now we are back at the drawing board.

Reaching out to lenders, comparing rates and options - trying to do this without further negative impact to credit scores.

Saving more money as the reality is setting in that we may have to cash finance much more than initially thought.

Waiting for local meet up to meet other investors possibly find a partner with complimentary skills. Basically someone with experience and lender connections to include purchase and rehab.

Tapping fingers....

Hello - 

Can anyone share any experiences working with Neal Business Funding located in Chicago and/or New York?

Thank you in advance!

Thus far we have been turned down for financing based on a few factors (by hard money lenders):

1. Lack of experience (in other words this would be our first deal and we're not scared of a project but lenders are another story)

2. Low FICO score (significantly lower than scores reported by credit bureaus I might add - HATE FICO)

3. Location/Area - we don't invest in YOUR community

The hits keep coming.... 

We are not a young couple able to house hack (read 2.5 kids, 2 dogs, 20+ years of married family living) but we do have experience in rehabbing, know our area (one of us used to be a real estate agent turned software engineer loves analyzing a deal), and have a bit of cash reserves (not enough to not require financing). We know its just a matter of time but OHHHHHH the frustration. 

Considering partnering with someone with complimentary skill set sounds like the best option but there are so many scammers out there... also not quite privileged enough to have close relationships with those in a position to offer private investment opportunities at this time. That we know of... time to get creative.

<thank you for reading our vent>