All Forum Posts by: Dmitri L.

@Hattie Dizmond  - thanks for the info!

Yes HML would be a very short term thing, just to complete the rehab. The property in question has some foundation work required, so would be difficult to go direct to a conventional loan.

Question for Texas investors (TX DFW Dallas):

If I have the cash to back an offer (can submit POF bank statement), but would like to use HML to close. Can I still submit the offer as cash? What if any paperwork would be required before closing assuming that the offer is accepted? And, has anyone had success with Fannie REOs with this approach?

Thanks in advance!

-Dmitri

Find a different realtor. You need someone who understands your situation and will help you along, not put up artificial roadblocks. They are providing a service and get a fat check for it at closing.

(On the flip side, we as investors should not waste agents' time either.. But this sounds like taking things too far).

Regarding the POA - I think I would be more comfortable personally, using a specific POA for the individual property - but this is only required to close, so you have plenty of time. Offers and such can be done via Docusign. I'm assuming a US based would have a notary service, if not definitely the consulate.

@Lance Borden 

Cap rate only takes into account the expenses required to operate a building. It's a number used to compare properties to each other, so whether you have to get a loan or pay cash, does not affect it. For more formal situations (commercial properties), there is a very specific list of what is and is not an operating expense (and should therefore be included in cap rate).

Your loan payment (cost of money), is going to influence your "cash on cash" return. I find it helpful to take into account both the cash only portion (ignoring loan paydown), as well as the "return" including loan paydown. But keep in mind that the second number is imaginary. Paraphrasing from one of the podcasts, "equity is just a number until somebody agrees to do something".

@Will Barnard  That's not how you do these things.

Purchase Price: 850,000

Rent: 345,000

ROI: 40.6% !

Can wholesale to one of my 2000 buyers in all 60 states!

@Jon Klaus  I need to see a pro-forma ;)

interesting topic! The reason that I would not expect them to focus on SFH is - they start with large amounts of capital and need to put it to work. Placing a few (dozen/hundred?) million into 100k SFH means literally hundreds of deals - each with its own due diligence that must be done. It's simply much less work to do 10 100-units than 1000 SFH. Work costs money because you have to pay people to do it, so they want to avoid the overhead which cuts into potential profit.

As to the question of why they actually are - my best guess is that it's difficult to put money to work in any other way at the moment. And they are paying retail due to either not being very familiar with the business model, or because they expect the market to keep going up (sound familiar)?

Just my 2c thoughts, so take it FWIW

Dmitri

If you com across any deals that don't quite work as flips, but might work as a fix and hold, please feel free to point them my direction

@Sid Siddiqui 

Regards,

-Dmitri

@Daniel Hadden

Welcome! Also from Japan, just starting out investing, and targeting Dallas TX. Feel free to ping me with any questions

-Dmitri

False alert, the UT-based company will assign someone local to do the appraisal. Makes more sense now..