All Forum Posts by: Hayato Hori

Ecorse, MI

Hey guys,

I'm looking at a duplex in MI to BRRRR.

PP $80k

Rehab $5k

ARV $140k

Issue is because I can get it for a discount and there's very little rehab needed, I'm afraid that the lender won't appraise it for that amount. In that case do you guys know of any credit unions that do commercial loans for a duplex? 

I’m looking for a lender that can appraise the property before I purchase it.

For example, I am currently looking at a property that is worth about $80k and I have negotiated a price with a seller at $52k.

Since the bank only lends on the lesser of the purchase price or appraised value, I was going to purchase the property at $52k using hard money and cash out refinance with a bank with no seasoning period at $80k appraised value so that I can pull all my money out.

By being able to send the appraiser out before purchasing the property to confirm the value of the property it definitely mitigates my risk as well.

Are there any lenders that can help me do this?

Listened to a recent BiggerPockets podcast of Daniel Isles (I believe his name was) who was able to purchase a property and have a bank lend based on the appraised value of the property. And he would use the equity spread as a down payment and essentially he would be able to acquire the property with little to no money down.

Ex.

Appraised value of property: $110k

Purchase price of property: $80k

Bank lends on 80% of appraised value: $88k

Since purchase price is $80k he is left with $8k.

20% down payment for $110k home is $22k

So he comes up with $14k + closing costs to close the deal.

Are there any lenders who are able to do this?

@J. Mitchell Bernier understood, thank you!

@J. Mitchell Bernier would you be able to refer me to a lender that can do this?

I’ve called about 50 at this point and they’ve all told me that it’s not possible.

@Whitney Hutten got it, thanks for the advice Whitney!

Thanks Whitney and Matthew.

Yea I'll definitely calculate hold time and such as well. I can't take advantage of a 203k loan since the property is out of state, but that is something I was looking into!

How would you guys manage duplex renovations? Do you normally do one side first when it's vacant and the other when that tenant leaves? 

@Brent Coombs yea I’m not too worried about the refinancing at the moment.

Just trying to see what the best way to find the rehab would be since after the down payment I won’t have the money to renovate, although the property is in very good condition as is right now.

Any advise will be appreciated!

And yes I’ll keep you all updated!

Hey everyone!

So I’m looking to buy a duplex at a price of $118k. It’s a 6 bed 4 bath duplex and is 3 bed 2 bath each unit.

The ARV looks to be around $250k.

One unit is currently rented and the other is vacant.

My plan is to purchase using conventional lender and put 20% down and finance the rest. Once I have it under my name, I'm thinking of taking a HELOC and using that for my rehab on the vacant unit. Then once the lease is up on the other I'll do the same and rehab that.

And once they’re both tenanted I’ll go ahead and refi again.

What do you guys think? Are there better strategies on funding the rehab?

I honestly think though that at purchase the property will be worth about $200k already, but want to see what you guys think and suggest!