All Forum Posts by: Jacob Szeto

@Account Closed No the full 90K is not comprised of the "subject to" The lender is attempting to get the escrow hold-back for a smaller amount but isn't hopeful. I am owner occupying so I at least pass that criteria. I will be looking into the 203k rehab today and keep you guys updated.

@Ben Wilkins Haha I already beat the seller up on the price pretty good. Went from 300k to 260k. 

As for just adding another $10k to the rehab budget, it is an option. It just doesn't sit right that I am required to spend $100k. What happens if I come in under budget or find a few ways to save money? I guess if the deal still makes sense I will just have to find a way to be alright with it.

@Ben Wilkins Unfortunately negotiating a lower price to appraise is a no go according to the lender. The "Subject to's" for the rehab are firm points that have to be taken care of before the loan can go through.

I asked the lender about a rehab loan and she said I need to have at least $100k in rehab to qualify.

That being said I think she was looking at the bank's portfolio products not FHA products. I will certainly research this option more.

Thanks for the tip!

I have a triplex under contract that needs a lot of renovation, about $90k. The lender basically says I need to have these renovations done before I can get a loan based on the appraisal. 

The way I see it is I have a couple of options at this point.

1. Have the seller do the renovations with their own capital and raise the sale price. I don't think the seller will be up for it and probably does not have the cash.

2. Put money into escrow and have the seller do the repairs with my capital. This option seems risky to me since I will not have title.

3. Escrow hold-back. Have the lender do an escrow hold-back. This option would be ideal but I don't think the lender will be able to do such a large hold-back.

4. Some sort of seller financing. The issue here is the seller still holds a mortgage on the property. I guess I could be a second position on the property but I still feel like I have a lot of exposure in this situation. 

5. Go hard money to do the renovations and then cash out refi. Probably my fastest but most costly option. To that note any hard money lender recommendations would be appreciated.

Any comments or inputs are welcome and appreciated. I am basically just looking for some input from other who have been in a similar situation.

Thanks!

Jake

Hi Aaron,

I am having a similar issue with a triplex I have under contract in Milwaukie. I backed into an ARV using a 5.5 cap rate for a turnkey property on my forecasted NOI.

I then used some per door averages from some comps around the area as a sanity check.

Hope that helps.

-Jake

Hi Nick,

1. Go to the planning department and find out what the code is for a rental egress. Find out how much it will cost to bring the unit up to code, I doubt very much you will get a pass for no egress.

2. That is a pretty unique question that I couldn't opine on without know your full financial picture, not to mention seller financing will be unique in itself.

-Jake

Hi there,

First post. I am a new investor looking to absorb as much info as I can. I am offering my services to anyone that needs them in order to gain some insight into the business.

For my day job I do financial modeling and consulting for billion dollar companies which has turned me into an excel ninja. So break out your wish list and send your spreadsheets my way.

Thanks,

Jake