All Forum Posts by: Greg Henderson

It’s 100% worth the money for an inspection for me. I’m very capable and take on most of the work myself, but starting out I just didn’t know what I didn’t know. My inspector even gave me great contacts for licensed contractors in the area for items I needed to farm out.

@Ben Shaw

$5000 for 3 windows!? How large? How rotten are they? Unless there is extreme water damage under the casing, I can’t fathom that price. I installed some double pane 6’ wide monsters in my house with a transom for $650 each. Lowe’s will measure them if you buy through them. I wasn’t comfortable enough to do it myself since they were all custom sizes.

Get them set and then hire a finish carpenter to complete the mill work for a professional finish or hire out the work in two stages. One for install and one for finish. I’m assuming your contractor hates window installs.

@Bryan Potter

If you can live off of what you get paid to go to school, I would enroll ASAP. Read a ton of articles and books on rehab and house hacking. It sounds like you have a great base if you've already rehabbed two houses! Sell the long distance rental. It will only drain your time. Set back enough to keep your family alive for 6 months. Buy a fixer upper quad plex with the VA loan. Rehab it and move your family in. Rent out the other units. Buy more. Grab the dream and never stop moving forward. Life isn't going to give you anything without risk.

@Wesley B Williams

Congratulations! Sounds like we had a similar experience.

My first rehab, I walked in the house a week after work started and almost threw up. The scale and scope is mind numbing. I knew as close to nothing as is humanely possible. The only thing I did right was get a great deal in the beginning. Bad choice after bad choice… about 17 months later I finished the 2300 sq ft gut out and learned enough to write a book. Looking back, I wouldn’t change anything. I’m convinced now I can overcome any problem. Just have to put one foot in front of the other..

Current situation:

I owe: 317k

Appraised value: 576k

This includes 4 SFH rentals and my primary. The rentals are all portfolio loans from a local bank 15 years @ 5%. My primary is conventional 15 years at 2.1%.

My market is very cheap and 1%+ deals are everywhere. I manage my own property, do my own rehabs, and rent them in days after completion. The overall risk feels low. There are very few SF rentals available on the market so rent has exploded upward. I’m looking to scale up and Multi family is very inclusive and extremely competitive here. So I plan on sticking to what works.

My goal is to put my equity to work without going overboard on refinance costs since the equity is spread over 5 properties.

I'm considering a HELOC (85%? I've never had one) on my primary and some cash on hand to pay off 2 properties that I only owe about 30k each. Then pull a 12 month line of credit, an option from a local bank, using both properties as collateral that I can borrow 90% LTV. Giving me an open line of credit for 166.5k for 2k a year.

Which leaves me with 113k debt on the other two, with 112k trapped equity. I could refinance them to conventional mortgage with a much better rate @ 80% LTV giving me 67,000 cash out - 8,000 for the refi. Total cost would be 10k + cost of HELOC on my primary.

Any thoughts or better options? I’m new to financing and I’m sure there is a lot I don’t know I don’t know.

@Dareen Allie

My sister actually had her realtor call her and ask why was she selling her rental. She wasn’t. The tenant actually claimed to be the owner and actually listed the home he was renting from her, through an agent. The guy was clearly an idiot and his realtor was lazy. No idea what he thought would happen. Strange things do happen.

@Willie A. James III

Honestly I don’t 100% know. The loan starts as interest only for 6 months to a year. Then at completion and final inspection, it’s rolled into another loan on normal payments. I don’t quite know the difference. I’m assuming it isn’t conventional because the bank has not sold the loan like they did with my primary residence and I didn’t go through the mortgage department. Since it’s my brother in law, I trust him enough to just go with it. Though I don’t know if it’s the best option for me and my situation and I’ve learned nearly nothing along the way.

@Nathan G.

Thanks for the reply!

Long term goal isn’t well defined because I honestly don’t know what’s possible. Speaking to a local that owns 45 units, he said he wished he would have thought bigger earlier…

Going full time BRRR and building wealth is my ultimate goal. I'd like to transition into STR vacation homes and sell off the long term rentals eventually. Multi family if the pieces are in place and the opportunity arises. Short term goal of 5 years is 20 units.

I’m building sweaty equity because I started with nothing, but I don’t do it because I love the work necessarily. I’m nuts and bolts oriented. If I pay someone $5,000 to level a house, I want to know why and how it’s done right. So I’ve started with doing all of the work myself and saving the expenses.

Now I really need to learn more about the business and financial side. Is it possible to scale up while keeping it under 20 hours a week? What type of financing has favorable terms for BRRR?

I’m looking for guidance or opinions for the future. Currently I own my home and I make a decent salary for my area, Hattiesburg, MS. Housing is cheap. I bought the home I live in through a foreclosure and decided I would remodel it myself. I’ve never worked in any residential construction craft, but I just dove into it. From the outside looking in, it was a terrible idea but I’ve been lucky. I ripped this place apart to studs and concrete. I rebuilt it over a year and a half using my off time from the 9-5. It went better than expected, I suppose. The experience was priceless.

Fast forward a few years, I now own my primary residence and 5 rental properties. I buy distressed property and rehab myself. Some things I have to contract out for permitting purposes through the city of course, but I’m comfortable doing most work myself. YouTube and determination goes a long way.

My brother in law is in banking, but it's mostly large commercial loans. So he's guided me the best he can but the language he speaks is foreign and I need residential guidance I believe. My credit is over 800, and I've built up some cash reserves at this point. All but the unit I'm currently working on is rented. I've maxed out my loan capacity at his bank. So what's next? My returns on current property is at 2.2% monthly rent/ amount owed averaged over all rental property. They're all SFR and I'm around 240k in positive equity with a decent cash flow.

What would you do from here? Duplexes and larger appear to only sell off market from what I’ve seen in my market. I’ve mostly skirted around the swarm of investors and picked at what I could find myself through Zillow. I’ve gotten lucky up to this point and I understand I need to educate myself. Where do I start? I’ve basically nose dived into the unknown and come out on top somehow. All of my loans have been commercial. I get a loan based on the appraisal of the property subject to the work that will be completed. It’s interest only until its completed. Then I cash out refinance at the end and pull out the equity to roll into the next project. Do I have better or cheaper options? Banking fees are quite high and my interest rate is averaged around 5.5% for 15 years. Any advice is appreciated!