All Forum Posts by: Erik Pedersen

Yes we told them we would do a personal guarantee. 

And our atty is a well known attorney we met and speaks at our REI club frequently. Not a guru.

Thanks for the reply @Account Closed 

Hey Everyone,

So we have a multi-family prop in Newark NJ that we are renting out. My partner used a home equity loan against her house and we paid for it in all cash. On the advice of a RE Atty that frequents our RE Investment Club we put the deed of our house in a Trust with our LLC as the beneficiary.

Now our problem arises every time we tell banks that we want to do a refinance because it seems that no one knows how to handle it through a trust.  Has anyone ever run into this problem?

Also, a lot of banks are saying we need 1 or 2 years 'seasoning' meaning showing positive rents before we can do anything.  On top of that, theyre saying we can only get 70% of the purchase price meanwhile we bought it at 95k and have put in 15k in repairs including a new roof.  Getting only ~70k is not what we are looking for.

Ive always thought that youre able to cash out refinance at least 70% of fmv / appraised value. Also the house is making $2200 a month in rent so thats about 3.5x what a 100k mortgage principle and interest would be.  This is a no brainer for lenders!  Also myself and my partner have great credit and plenty of income..

So my questions are - does anyone have experience refinancing with a house in a trust and do you have advice on where to go to get a 'real' cash out refinance.

Thanks all for any help!!

@Lawrence Good OHH you were looking for local pricing, comps, mls details for similar houses?  I didnt understand that is what you were looking for - so yes a Realtor is a great resource!  

The point of wholesaling is to not work with realtors my friend, usually.

You are essentially taking the place of a realtor.  Realtors require a percentage of selling price, you incorporate that into your assignment contract.

70 - 80% ARV minus repairs and maintenance/holding costs. Cant do any better for the sellers or else for you and your investor its not worth it!

Just put in the time, do due diligence, run the numbers, get a house under contract, find cash buyers, a deal is a deal is a deal for them.

@Lawrence Good

@Dylan Burnett Explain to them the facts about the area, the work that needs to be done to the house, comps, days on market for the area, everything that factors in.

Also, the most important thing is to find out the sellers situation. Majority of people that call you will be just looking to see/not really motivated to sell. Those will be wastes of time as you are in the business of helping motivated sellers, not being a realtor and listing their houses...

With my wholesale - I have only done 1 - I went to the person's house(not over the phone) printed out listings in the area most of them had DOM of 6+ months and were houses that were move in ready- their house needed 20k worth of work. Let them have the facts sink in then see if they want to play ball.

Good luck!

'...affordable multi-family unit in which I would take up residence in one of the units, a rehab, a flip.... I'm not entirely sure just yet. I will take the next year to learn as much as possible, network and make connections, improve my credit score and stash away cash for that first deal.'

Do that to start - It will familiarize yourself with mortgages, financing, becoming a landlord, fixing up(finding good handymen/contractors), taxes, insurance etc etc etc everything that will be part of your RE career. Thats how I started and it at least gets you in the game, then you go from there. Welcome!

Try to do 'Seller Concessions' with the seller -- that is -- you roll your closing costs into the mortgage. Ask your Realtor about this and do a little research first so you understand.

I did this with my 2 family and went to the closing table with ~$5k. I did $9k seller concessions so its in the same ballpark as the deal you are doing.

I had thoughts about rent control when I was buying my two fam in Newark. There is an ordinance for that city -- anyway I called rent control office and saw if my house was 'registered' with the rent control office(whatever that may mean.)

It wasnt - so I was able to charge market rent and do whatever I want.

However the house was delivered vacant and Im not sure what the law is regarding raising rents for existing tenants.

Sorry if this was no help at all but thats all I got LOL.

Cost of living is definitely the reason for leaving NY NJ. If I wasn't getting rent checks from my tenants I would move too - its also only getting worse!

If you have some sound general knowledge and have a positive attitude, an open mind, and willing to learn and listen to people who have done it before, age will not matter at all. I bought my house when I was 23.

How old was Mark Zuckerberg when he invented Facebook....?