All Forum Posts by: Elliot B.

@Ron S. Thank you for your colorful and thoughtful responses. I understand that a bank is going to get what a bank is owed.

In your last paragraph, you said "the lender did an appraisal and has factored in a certain percentage for deferred maintenance, carrying costs and disposition costs to be subtracted from the fair market value. THAT is what they will base their acceptable sales price on"

Could you elaborate on why they are subtracting the carrying costs? Do you mean the cost for the bank for continue to hold the property?

@Wayne Brooks I understand that the bank gives zero ***** about my desired profits. But there must be some recognition that the property is underwater and needs repairs.

Either way, going to make an offer and see what happens.

@Ron S. Why is the principal irrelevant? The bank has already been paid a lot of interest on the original $180k purchase.

The ARV is $190k+ but there are a lot of repairs to get it to that point.

What's you guess on the lowest they will go given the circumstances? There are plenty of comps from $158k - $230k.

Thanks for the advice, Andrew. It's a good exercise even if it doesn't get accepted, eh?

Thanks for the reply, Marc.

The outstanding principal is only $137k. $222k is the payoff amount. Of course the bank wants all of that money, but an offer of $117k is "only" a 15% discount on the principal. The property has been in non-payment for 5 years.

Hi all -

I'm evaluating a short sale with the intention to BRRRR it. I'm currently "house hacking" a 4-plex. This would be my first short sale and BRRRR. I could use some help checking my numbers / plan...

Property details:

SFR - 3br / 1ba

$196k ARV

$20k reno

$222k payoff quote from bank ($137k principal)

Could easily rent for $2,000/mo after basic reno

The owners are game for a shortsale, the bank is game for a shortsale. I need to put the deal together.

I'd like to find 100% private / hard money financing for the purchase + renovation.

The BRRRR strategy tells me that I should offer no more than ($196k * .7) - $20k = $117k

My gut tells me that the bank won't accept $117k on a $222k outstanding loan??? I don't get the impression that there are any other offers.

I'm assuming ~$5k in holding costs for a 4 month reno in a 10% private money loan. Plus $2,500 refinancing fees. Does this seem conservative enough?

If I can refi at 70% LTV / $196k ARV, I'm looking at a ~$960/mo PITI payment, which would be great cash flow after expenses at $2,000/mo rent.

How do I look for:

- private / hard money lender

- bank for refinancing with no seasoning / 6 mo seasoning

Thanks for your help!

I am also evaluating a property that I've confirmed is on the national historic registry and might qualify for the credit.

Can anyone give me an example of how this tax credit is applied? Is it 20% of the after-rehab value? Or 20% of qualifying rehab costs? An example purchase price + rehab costs scenario would be helpful.