All Forum Posts by: James R Dean

Ok so why are you financing 53% and using over 600k in cash rather than 75% and using 350k in the down payment? The COCROI is too low for me at this point of my career, but some do it differently. It seems your appreciation is fairly high in your calculations. 

@ChristianWeber I see you have 3 choices: 

1-Accept as is and eat it(not recommended)

2-Walk away and learn to spot some of the issues before you pay for an inspection. 

3-Ask for cash back at closing to cover things in report, start around $15k-$17k looking at your numbers. You could use the money after closing to address the most pressing issues. I wouldn't go with less than $10k back at closing. 

Good luck!

@LuisCorona I think this is overpriced to start. Do you have any property management experience in or educated enough to handle that. Vacancy rates are higher in multifamily, so I would run at least 8 to 10% on that. Do you have a bank quote at 4.1% or should that be higher. How old is this property and what does the HOA cover in maintenance and capx expenses. 3% probably won't cut it. Minimum or 5, more like 8 to 10. What is the caprate for this area? You are looking at 5% here. Unless this is 15 years old or less, I don't think that will work. Need more information to critically analyze this.

I personally would pass on this deal. COCRoi is only 2% putting that much money into it. 

Your expenses for maintenance and capx seem low at 5% and 3% respectively. Unless this is only 5 years old or newer I would run at least 5% capx if not 8% for both. Otherwise it seems solid if rent is accurate. Depending on where you are in investing, look at a 20 year amortization also to pay it down faster, or if needing cashflow mainly, keep it at 30.

Arthur Cordoves

I have started, my original lender has a 6 month seasoning which is actually on thanksgiving. Another I talked with would only go 15 year amortization, which put my money too tight on this BRRRR.

@Ken Naim I have a private investor that is willing to put up the funds until I refinance my BRRRR. He said he wasn't comfortable at this time going in as an equity partner since he is new to real estate investing. I will talk with him again and see if I can change his mind. Thanks for your reply.

Hello Biggerpockets family,

I have a contract on a 4 plex, and just finished a BRRRR. I have one occupied property and my personal house currently.

I have talked with 3 banks and two of them basically told me that since I have no personal money going to be used in this deal( I have acquired a private loan for more than closing and down payment), then they didn't feel comfortable lending to me. I told them that I have about 25k rapped up in my BRRR, which is ready to be refinanced, and I would get back from 12k to 20k, depending on if it is 30% or 20% equity remaining in my property. I asked them to do both and refinance on my current BRRRR and put together another loan for this 4plex. One said they don't do refinancing, and the other would only do one at a time, meaning they would do the BRRRR but not the 4plex. The third bank would only entertain a 20 yr loan with commercial terms, 5 yr balloon, not even need to refinance BRRR yet, but the numbers won't work on that short a time, and I was actually approved on that. Go figure.

The numbers work, and will improve after I raise rents to market rate next Spring. Time is running out on my contract to purchase, and am surprised it hasn't already expired. Is there something else I can do to move forward or just wait until I refinance my BRRRR, then move forward with my properties? Thanks in advance.

Stumped in Central Illinois,

Jimmy Dean

@David Worker Thank you I will put that on my calendar but think I will be out of the state for the August meeting, but will be there as soon as I can.

What time is the meeting?