All Forum Posts by: Brian Garrett

@Brian Garrett They will give you a interest rate between 6%-8% based off your credit score. The high your credit score, the better rate you will get.

@Jeff Wallace You mentioned the importance of W-2 income, and I agree. On a related note I wanted to mention something I heard recently as it relates to self-employed individuals hoping to use the BRRR strategy. Generally self-employed people have a much harder time qualifying for financing, however someone recently mentioned the idea of structuring your business as an S-Corp and paying yourself a salary, thus W-2 income, and that this would make it easier to qualify for traditional financing even though you're still technically self-employed. Perhaps you've heard of this being done as well?

Brian Garrett I never thought of it like that, but yes! It's a slow BRRR!

these lenders I mentioned ARE HML s they will all have points up front.. banks have points up front.. and banks have a load of junk fees

at the end of the day any bank loan you will pay 4 to 6k out the door more than you borrow call it points call it junk fees

HML will be 2 to 4 points and usually some junk fees.

@Brian Garrett  rental business is a business's you must look at bottom line numbers.

and each market will dictate how much you can pay for capital.

in a market like Michealas were she can buy a sub 20k house and rent it for 800 bucks.

you can pay HUGE interest rate and still make good money

If your paying 400k for a property that brings in 2500 a month then interest rate is a critical component. you need to do the math

Maybe you should work with HMLs and flip ?  This could give you a bigger pile of cash.  Or wholesaling ?  

@Brian Garrett private and HML which are what these companies are do NO doc loans every day of the week. your not unique.. just call the few I mentioned ... you will get your answer in 5 minutes.

cost of capital is a number.. depending on your market it could be an irrelevant number.

like were @Michaela G. invests were property price to rent ratios are way out of kilter compared to other areas.. she can afford far more in interest rates than most and still make a great income property. you need to see the bottom line.

if you can borrow at 8 or 9 % and still make 300 a door.. what do you do.. NOT do it because you want to borrow at 5 or 6 and make 375 a door.. so you just sit on the side lines and watch the world go buy?

I have personally funded 4 different operators that have gone from zero to 100 to 200 doors in the last 3 years all with our private money. and we are not bank rates by anymeans but they make 200 to 300 a door so its not really about cost of capital its about scale... had a call with one yesterday by end of may they will be at 180 doors and 140k gross revenue.. and I funded each and every one of them