All Forum Posts by: Jalaj Punn

@George Chung Out of curiosity, how's your property doing now? It's been over 3 years lol ...hoping you're cashing flowing better!

Thanks for the reply! A few more questions... 

Based on the Bob example : 

1. Why can the original property loan be paid off? It seems kinda weird that the bank would allow Bob to take out a loan of 525k (0.75 * 700k) to pay his remaining loan on the original property off and then use the excess to finance another property. The part that's making cash out refinance unclear is this idea of getting another loan to pay the original loan off

2. How many times are we allowed to do this against a property? Hypothetically, if Bob does a cash out refinance right now and then 5 years later, his property is worth 900k allowing him to get a larger chunk of cash from the bank to finance something else. Could he do it again against the same property? 

Thoughts? @Kenton LeVay

I have a few questions about the BRRRR strategy.

Ex. Bob buys his home for 300k, down payment of 60k, and loan for 240k. He rehabs his place for 20k. The total investment is 80k (down payment + rehab). Bob refinances the property for an appraised value of 700k. The bank will allow him to take a loan up to 75% of the appraised value (0.75 * 700k = 525k).

He takes 525k loan and pays original loan back (525 - 240k) leaving him excess 285k. Now I have a few questions :

1. 1. If Bob originally bought his home as a primary residence, does he need to buy another primary residence and be forced to rent his original home or could he possibly use it as a 2nd home without needing to move from his place? (I know the point of BRRRR is to rent and get passive income)
2. 2. How synchronized does this process need be with finding another property? Like if Bob commits to the refinancing at the appraised amount, takes a loan of 75% of appraised value, pay off original loan, and realize he has excess capital - is there any time frame within that he needs to use the capital?
3. 3. How is that money used for the 2nd home down payment?

Please let me know if I’m missing something.

Thanks!

Thanks for the input @John C. and good idea on the 6 month lease! 

Recently, I was approached by someone who works for temporary housing about renting my property. The family he’s working with have experienced fire damage on their home and need a place to live. He wants a lease for a few months and then it would be month to month. The family’s insurance would be paying the rent and it is higher than our listed monthly rent.

I’m a new investor and have never heard of anything like this before. This seems too good to be true…

Questions
- Is this a scam?
- Why would they be open to paying more than listing?
- How can this become a bad situation?
- What type of deposit should be required if pets are involved?

My pros/cons list :

Pros
- Rent is guaranteed

Cons
- If we start a 4 month lease right now, then it would finish by December - could be hard to find someone to rent the place when it’s cold/rainy
- Damage could occur and would require fixing after this temporary housing is complete meaning more money

If someone has done this before, please share your experience!

@Brian Garlington I want to be with family for the next 6 months due to covid and wanted to explore the possible route of getting a 6 month tenant. Idea of advertising on CL for a seasonal worker is a good idea though!

Thank you for the information @Kyle J. , very helpful! I have a creative idea (still would need to check with an attorney), would it be possible to sign a tenant on a lease for only 25 days (less than the number of days before they have tenant rights) and do that for 6 months? @Calvin Kwan mentioned over 30 days would mean the tenant has rights. Each lease would be for 25 days and then at the end of the last 25 day lease, I would be able to move in? Unsure if this is feasible or even legal...just a thought!

@Katie P. Sorry, I didn't get you. Could you explain a bit more please? Thanks!

Thanks for the response @Calvin Kwan. Is there any way for me to rent my home for a short period of time and then move in? From what you said, it seems like if I rent my home then there's a chance I won't be able to live in the place ever :(

Hello! I want to write a 6 month lease to a tenant for my SFH in Oakland, CA. If I explicitly stated in the lease that it's a 6 month lease, will the tenant be required to move out after the lease ends?

I’m not sure if this is true or not, but from what I’ve heard the tenant falls in a month-to-month lease after the lease ends? If that is true, how would I be able enforce they leave after the 6 months? Mainly asking because I want to move in to the house after 6 months.