All Forum Posts by: Devin Haertling

Daria B. My current residence that started it all has 90k due on the note and it appraised at 160k. The loan on my current residence and all the rentals are through the same lender and loan officer. They are a first lien holder against my residence.

Daria B. We are not paying back equity to our own home. Each house has its own mortgage but if we would default on a payment on a rental they could come after our primary residence.

Or bridging equity. This is an in house loan and it's awesome when you get to this point because this is what I have to do to get an approval letter I shoot an email to my banker that looks like this. Hey Kevin I found a house for 55k that I'm going to put an offer on. Thanks He follows that up with an email back with an attached letter of approved funds. We do have to have an updated appraisal on our current home if it hasn't been done in the last 12-18 months. We sign all the loan papers at closing. He usually asks if we need any extra for repairs and then we roll all the closing costs into the loan. Typically closing costs are 400 and appraisals are 350. Typically we are all in at 1000-1500 at closing.

My lender only called it bridging financing. He did not give it a specific name.

Daria B. I asked my banker that exact question and he stated it was not a HELOC. Each property has its own mortgage and I pay back each property with monthly payments. I asked him how to explain it to others and he stated " we are bridging equity". So according to him the more properties I buy and start to pay off the more purchasing power I have. One property I bought appraised at 20k more than purchase so he told me I could immediately buy another one.

I have been on BP for a little while now and I have not come across anyone financing the way I have or maybe I just haven't recognized it. To start I bought my current home I live in for 110k. I'm a DIYer and fixed it up myself for 25k. It appraised at 160k. At this point I was not interested in rental property. Fast-forward about two years and a house on my street became available. I contacted my lender for my loan on my current residence. Mind you this is a private small bank. I asked him what kind of financing we could do on this house. He told me I could bridge the equity on my personal residence to use as a down payment on rental property. I was hesitant at first but we jumped in. Since then we have bought 6 SFR ranging in price from 40k-55k over three years. Each deal is 4.5% amortized over 20 years with a balloon payment due at 5 years that will roll over into a new 5 year rate and so on until it's paid off. Since we started that rate has stayed steady at 4.5%. The bank has also let me roll the closing costs into the loan as well so I have bought 6 houses with only about 500-1000 out of pocket for simple repairs and the such. My 6 houses currently cash flow 3900 per month. I self manage and I am in a town of 3200 people. The rental market is crazy here for such a small town. My vacancy rate over 3 years is almost 0. I have only had turnover in 2 of the 6 houses. I think this is because most of the other landlords don't fix things when they break and are just bad land lords. It seems with every house I have I get 2-3 qualified applicants within 2-3 days. My banker says he can continue to do these deals and even expand into 4 unit multi families as long as the equity is there. Is anyone else out there doing this kind of financing? I know there are risks with this but I want feedback if I should continue to pursue this method or is there something I'm missing. I would love any comments you all would like to leave.

Shaun Downs I completely agree with you that multifamily are completely overpriced in that area right now. I don't know if there is a bubble coming but if it pops I'll be ready to scoop up what I can. Do you self manage or did you go with a PM?

So all here is the answer as to why no one wants this place and the ask is so low. The house is in a high crime area and this weekend a man was shot and killed three doors down. I talked with the local police and they told me to avoid the area. So there it will sit. It's out of mind.

Let's say I will be at the house between 1-2. I will tell the first person to be there at 1 and then the next at 1:10 and so on every 10 minutes. Then when they show up I let them know there are multiple people looking at the house.

I would charge an application fee only if they turn in a completed app. Completely agree though. Set up one time for an hour on a day that works for you. I tell potential tenants we are having an open house on x date from x to y time. I love when multiple people show up at the same time. Makes it seem like your place is super desirable. I have found that if people can't make it during that one time you set up they are people you don't want to rent to or they contact you again to set up another time to set up a viewing One day I had 10 renters that wanted to look at the house. In the hour I had available only 3 showed up and only one turned in application. The one I ended up renting to called me later that evening and apologized they missed the time. They had a work obligation and we set up a separate showing and she ended up being a very good tenant.