All Forum Posts by: Gabriel Green-Lemons

Hi Darcy! It has been a wild ride since I posted that, but it was all worth it. My wife and I have since put a pause on the single family BRRRRs and are considering buying an apartment building next. Thanks for taking the time to read about our journey. We wish you the best in your RE endeavors!

Hi @Oleg Enik,

Since I started this discussion a couple of years ago, I BRRR'd 3 single family houses in Indianapolis, IN while living in NJ. As it turned out, I really didn't need to know the ends and outs of how to rehab a house. I put together a team in Indianapolis, IN which included a good contractor and property manager. After reviewing scopes of work and talking with my contractor and property managers about potential rehabs, I learned a great deal. Each time I purchased a house, I was forced to learn a lot to have an understanding of what need to be done during the renovation phase. I made sure I was not afraid or embarrassed to ask questions.

@Mitch Messer and @Greg Kurzner thanks for the responses! Check you PMs.

I live in New Jersey, but I am about to start purchasing single family homes to rent out in the greater Atlanta, GA area. I'm putting together a team of boots on the ground, and I need a referral for a reputable property manager. Does anyone have experience dealing with a property manager they feel comfortable recommending? 

Hey  @James Lee I concur with everything @Alexander Felice said (super knowledgeable guy by the way). 

I just finished a BRRRR that took 111 days in Indianapolis. The bank I used refinanced against the ARV at 75 LTV (the lender is BMO Harris bank, and I believe they are regional). The product I used is called a "Refi Xpress" and the bank was willing to refinance against the ARV as soon as the renovations were complete (rehab took about 3 weeks). The one downside was they only allowed up to a 20 year amortization.

So yes, the scenario you are describing is absolutely possible. Don't be scared to call a bunch of local lenders to find the loan product you like the best. I called about 20 different institutions to find a few that would do a cash out refinance against the ARV without me being on title for 6 months. I narrowed it down to 5 that would and then went with the one that covered all of the closing costs.

Good luck and great question to pose to the BP community!

@Alexander Felice Thank you for the encouragement and offering some perspective! It's nice to get some insight into a bank's point of view from someone like yourself who is behind the curtain. I should have known it was too good to last forever. 

You're absolutely right. I need to create content so I can add value to others while building credibility. As you said, I may be able to attract others to me and create mutually beneficial relationships. I appreciate you weighing in!

@David Hall You make great points!  I certainly wouldn't want to lose out on a good cashflow opportunity  worrying about pennies along the way. I also need to find better deals as you have suggested. I may take a page out of your book and look into local credit unions while trying to build my private money contacts. 12% and 8% is definitely okay with me especially with no points (transfer fees I was paying with the 0% interest BTs). 

@Paul Beets I was glad to get that one deal done in Indy as well. Things have really been heating up in this market for SFH's, and I have had a bunch of offers not get accepted. In regard to your minimum loan limit issue, have you looked into BMO Harris bank? They are a regional bank in Indy and other parts of the midwest I believe, but I'm not sure about Michigan. I called around to a few banks before I started the BRRRR strategy and found a couple who mentioned they didn't have strict minimums on cashout refis. I can't remember the names off the top of my head, but I created a spreadsheet when I was doing my search and can probably send you over the names of the banks if you like. Just PM me.

Hey BP family! 

I've run into a bit of an issue. I bought & rehabbed a house from 1000 miles away using my personal credit line. Now there are no more 0% interest balance transfer offers available from one of my banks.

Earlier this year with the help of my “Core 4” team on the ground (see David Greene’s awesome book Long Distance Real Estate Investing), I bought a single family rental property in Indianapolis, IN while living in NJ. I had it rehabbed, rented and refinanced into a long term loan within just over 3.5 months. I was all set to knock down the 4th “R” in that all-time-great RE investing acronym, B.R.R.R.R. Essentially, I was ready to “repeat” the process for those unfamiliar with the term.

There was just one BIG problem that I hadn’t anticipated…

One of my banks, at which my personal unsecured credit line is 40k, suddenly was no longer offering the 0% interest balance transfer promotion! This was unexpected because, even after the initial introductory period was over back when I first obtained the credit line, the bank continued to offer the 0% promotions again and again for years. When I realized what happened, I called customer service and humbly inquired about whether they would be willing to extend the 0% interest promotion once more given my stellar payment history with the bank. I reasoned that since I have never made a late payment and the bank made good money every time I used the balance transfers, they would be happy to reconsider. Unfortunately, I was wrong. I call it being optimistic, but in hindsight maybe I was being a bit naïve. I was told I still had the option to initiate a transfer, however, I would have to pay the 3% transfer fee and pay the variable 14-24% interest rate while funds were in use…

Just like that, 40k of capital to go out and buy assets and get them to cashflow……gone.

As a value-add real estate entrepreneur, I understand with every challenge encountered, there is a lesson to be learned and an opportunity to evolve. Evidently it is time for a course correction. I CAN NO LONGER RELY ON MY PERSONAL CREDIT LINE to fund my BRRRR projects. I need to look into other sources of lending, namely, private money. I just finished listening to Matt Faircloth's Raising Private Capital on audible, but I will be re-listening and taking detailed notes. I am a little dismayed with the short-term setback, but I welcome the opportunity for growth.

Is anyone else going through a similar situation?

@Mario Ciccarelli glad you joined the discussion! I wish you success as you save up to get started soon.

@Raymond Y. I'm glad to have a team as well. Honestly, I would prefer to have started purchasing multifams, but after speaking with local PMs and investors, I discovered it was not going to be easy to find 2-4 unit properties in decent areas to buy and rehab within the price range of my credit line limit (less than 100k). I certainly would like to hear more about your experience as you scale. 

@Stephen Kunen congratulations on the purchase and getting the process of the BRRRR started! Thanks for the good luck wishes as well! BRRRR'ing multifams is the next step for me as I continue to increase my total credit line. I'm hoping to learn a great deal by the end of this first one I'm working on in Indy. I'd be glad to share my experience. I'm sure I can learn from yours as well.

@David Ribardo I agree. I wouldn't call myself a "successful investor" yet, but I'm certainly going to see this thing through. I have lost money in the past, but I am focused on my WHY and will continue learn lessons and adapt and improve. Congratulations to you and your partner on what sounds like a great win! You guys are where I would like to be. Thanks for the motivation. The 1031 exchange is such a powerful way to build wealth and graduate to larger properties. 

Hey @Steven O'Leary thanks for joining the conversation! I would definitely like to connect.