All Forum Posts by: Jamaal Johnson

@Michael Doherty it all depends on the ARV my friend. If you only have 5% equity in the property there is no lender or HML who will lend on it unless the improvements will increase value substantially. Even then they typically will only give 70-80% LTV. Example: 120K duplex with 30K reno needed.. ARV of 200k - They would provide up to 140k potentially. It would help out a lot if we had numbers for your property.

@Michael B. I'm here in the DSM area and have a connection at Luana savings in clive. They finance 80% of purchase and rehab and have no minimum PP. Another local investor I am about to partner with on a flip has quite a few connections for reno loans as well as he is in the multi space. It all comes down to asking the right questions I guess.

Good luck Michael!

@Michael B. That is incorrect. A lot of smaller credit unions offer commercial renovation loans on SFR 1-4 units and MFR with far more favorable terms than the typical HML. You just have to call around to a lot of lenders and have that discussion to see what they will be able to do for you.

@Michael Doherty Typically people use either HML/Bank financing or PML. Almost 100% of the time the whoever you use to fund your deals will want 1st Lien position and this is why you cant really get away with using both at the same time. My suggestion is educating a potential private money source on becoming a partner with you, utilize him to finance the downpayment/ renovation and then split profit after the sale.

Good morning BP family!

I have a few questions surrounding rehab process for first time investors that I am sure will be helpful for a lot of individuals across the site!

- If banks and majority of hard money lenders wont provide initial draw until after work starts how are you financing rehab work on properties post closing? (credit cards, cash, additional borrowed capital)

-What are the biggest mistakes you made when starting off in the fix & flip arena?

-What was the details of your first deal, and how did you scale up from that point on?

Feel free to drop some flipping questions here to be answered!

Ask questions & Share your experiences! Looking forward to reading them all.

Starting out in REI can be intimidating for those who have limited access to funds, or other things it may require to startup within their area. Tell us about how you leveraged partners to pick up the slack in areas you weren't so familiar with or strong in and how building those relationships set you up for further success moving forward!

Even one with a free membership has the opportunity of meeting up with partners and changing their life through real estate here on BP. the amount of free knowledge between podcasts, webinars and the forums is unrivaled anywhere else on the internet. that opinion can be slapped between two slices of rye with mayo cuz it's straight balogna man! Check into BP everyday, learn and execute.

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Seller financing works best if house is free and clear. There is always risk of acceleration being initiated from the lender but usually as long as you are making payments on time they don't care. Obtain written authorization to work with the lender to make payments and to obtain payoff quote for whenever you decide to refi down the road. Definitely work with an attorney if you are unsure of your ability to follow through with a deal like this.

@Anton Watt an example can he as such: Purchase Price:80k on 15 year amortization @ 5% with downpayments of 5k. Seller would carry remaining 75k back on a note. Rehab:20k After Repair Value: 125k You can live in it for a few years and turn around and resell it and pocket all proceeds tax free or just hold the home and rent at that point. the choice is yours. Title is power, lease options are good too though if you have a different end game such as assigning options etc.

@Anton Watt a lease option doesn't give you full title, it does however give you interest in the property in which yes as long as the contract contains correct verbiage you would be able to renovate home. The risk in doing this would be if you throw all your money into a home someone else has title to and breach your lease agreement you basically just fixed their house for free. There may be grants you can use towards property repairs depends on the home. Make sure you have your end in mind as far as how you will payoff what you owe after option time is up or just go the route of seller financing to gain title while seller carries note.