All Forum Posts by: Freddy Hernandez

@Crystal Smith

Thank you for the response and tips. As far as “cash for keys” would you recommend incentivizing them - the faster they move out, the more ash they receive?

Hello BP!

I’m in the process of closing on a 2 flat + living space in a C-/D part of Chicago that is on the outskirts of a very up and coming neighborhood.

- Was on the market for $120k 3 months ago

- Dropped to $100k 1.5 months ago

- I offered $88k 21 days ago

- Negotiated to $72k if we close by the 30th and take on the current tenants (only 1 unit has tenants/other unit is vacant)

The property needs roughly $45k in work which would bring the property’s value to around $150k and would cash flow very nicely whether I go the conventional tenant way or section 8.

Ideally I want to rehab, rent, and refinance in no more than 2 months, but the eviction/tenant situation might slow this down. The seller is in a pinch and wants to sell ASAP and has lowered the price because of this so I would be stuck evicting the current tenants.

I am using a HELOC to finance this deal, but the longer I go without financing, the more I'd have to pay out of pocket to repay the HELOC on top of likely missed rent for the occupied unit.

Has anybody had experience taking on existing tenants and evicting them? Looking for tips, good and bad stories, and anything in between so I can be better equipped to reply to my lawyers.

Thanks in advance!!

Hello everyone, I have a few questions regarding the BRRRR strategy since I am in the beginning stages of executing my first purchase using said method. Once the property is rehabbed and rented, is there an amount of time I need to wait before financing the property? Also, I recently read that there is a limit of 4 mortgages. If I’m not mistaken this only applies to FreddieMac/FannieMae correct? This does not apply to small lender and credit unions does it? I plan to finance through a small lender where I am good friends with one of the brokers. Thank you all in advance!!

Hello everyone, I have a few questions regarding the BRRRR strategy since I am in the beginning stages of executing my first purchase using said method. Once the property is rehabbed and rented, is there an amount of time I need to wait before financing the property? Also, I recently read that there is a limit of 4 mortgages. If I’m not mistaken this only applies to FreddieMac/FannieMae correct? This does not apply to small lender and credit unions does it? I plan to finance through a small lender where I am good friends with one of the brokers. Thank you all in advance!!

@Andrew Postell Thank you Andrew! I'll make sure to read your article and get back with any questions.

@Wilson Lee That is a lot of great info!! Thank you!

Hey everyone, I wanted to get a little insight/pointers on the strategy I am thinking of taking on my next rental property purchase. Here is where I currently stand. I can take out a HELOC on my current owner-occupied rental and a close family member is willing to do the same on their property to lend me the rest of the cash needed. Once approved, I want to buy a property in full as foreclosed, bank owned, and/or auction property so I can buy cheap, rehab, and increase equity. I then plan on taking out a mortgage on the property and pay both HELOC’s in full. Obviously I will only do this if the cash flow is worth it. I want to see if anyone has used this strategy to further grow their property portfolio? Pros? Cons? Legalities? Thanks in advance!!

@Larry Turowski Thank you. It made sense to me, but wanted some affirmation from a more experience investor!

Hey guys, A few years ago I bought a foreclosed triplex for about $150k. After extensive rehab work, I moved in to one of the units and rented out the other two. Soon after I began the process of a cash out-refinance (new mortgage is $172k) so I could rebuild the garage and rent out parking spots for extra income; the property was now valued at $260k. Fast forward a few years to today where 2 friends and I are in early steps of creating an LLC. We have decided to go into commercial rental properties and have set a price limit for what we want to purchase. That being said, I am going to be about $10k short for my third of the cash. My estimate is that the my current property is now worth $275k because the garage was unusable during the cash out-refi appraisal. My credit score is over 740. Cash flow on the rental units is very good. Overall debt/income ratio is in great standing. All debts from rehab work are paid off. My partners and I want to purchase a property every 8-12 months for the next 3-4 years.  Would you recommend a HELOC for the amount I'm short? A little more since the commercial lenders want to see leftover cash after approval? or Should my HELOC amount be a larger portion of the equity I have so I am in good position for future purchases? Any advice is greatly appreciated!!

Hey guys,

A few years ago I bought a foreclosed triplex for about $150k. After extensive rehab work, I moved in to one of the units and rented out the other two. Soon after I began the process of a cash out-refinance (new mortgage is $172k) so I could rebuild the garage and rent out parking spots for extra income; the property was now valued at $260k.

Fast forward a few years to today where 2 friends and I are in early steps of creating an LLC. We have decided to go into commercial rental properties and have set a price limit for what we want to purchase. That being said, I am going to be about $10k short for my third of the cash.

My estimate is that the my current property is now worth $275k because the garage was unusable during the cash out-refi appraisal. My credit score is over 740. Cash flow on the rental units is very good. Overall debt/income ratio is in great standing. All debts from rehab work are paid off.

My partners and I want to purchase a property every 8-12 months for the next 3-4 years. 

Would you recommend a HELOC for the amount I'm short? A little more since the commercial lenders want to see leftover cash after approval?

or

Should my HELOC amount be a larger portion of the equity I have so I am in good position for future purchases?

Any advice is greatly appreciated!!