All Forum Posts by: Jay Lancaster

I'm working with a partner in an effort to acquire 8 properties to buy, fix and hold. When the same private lender is providing the funds for property acquisition and the estimated 3 to 4 months rehab costs what are the "customary" (If there is such a thing) percentages that would or should a person try to negotiate on repayment from an immediate cash out Refi? Should the Acquisition loan repayment be separate from the rehab loan?

Hi! Jay,
The percentages for repayment in a situation like yours can vary based on the terms you negotiate with your private lender. It's important to consider factors such as interest rates, loan terms, and the specific financial arrangement you have with your partner. Typically, acquisition loan repayment and rehab loan repayment can be separate, allowing for more flexibility in structuring the deal. It's advisable to consult with financial professionals to determine a repayment percentage that aligns with your projects financial projections and goals.

Let me know if you need more help.

Hey Ruby. thanks a lot. I appreciate it. What type of financial professionals are you referring to exactly?

Hi Jay,
I'm referring to financial professionals such as mortgage brokers, real estate attorneys or financial advisors who specialize in real estate transactions and can provide guidance on structuring loan agreements and negotiations.

Ahhh. Thank you so much, Ruby. I really appreciate the help.

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Detroit, Michigan

Quote from @Account Closed:

Quote from @Jay Lancaster:

Hey Ruby. thanks a lot. I appreciate it. What type of financial professionals are you referring to exactly?

1 Vote

Detroit, Michigan

Quote from @Travis Biziorek:

Quote from @Jay Lancaster:

Quote from @John Vietmeyer:

There is a cash buyer exemption to the conventional loan seasoning rules. Doing this now and getting 100% of the purchase price + closing costs back without waiting on seasoning. Educate your lenders on the rules.

Wow. Can you educate me just a little more on this? Looking to pick out 8 properties in Detroit all cash. Then to fix and rent after the Cash-out Refi. So, you're saying that if we chose to we'd be able to pull out 100% of the value? Is that appraised value or ARV? Would you mind sharing with me how you're getting back the whole purchase price plus closing costs? I'd really appreciate.

Hey Jay, I have 12-doors in Detroit. Happy to connect if you need help/advice.

What John is referencing here is delayed financing. Google it and you'll get a better overview than what folks are telling you here. I've used it a couple times but it's only best in specific situations.

Seasoning period has changed from 6 to 12 months but ONLY for properties purchased with a loan. If you're buying cash, the seasoning period is still just 6 months.

Delayed financing can be started immediately, but it only allows you to pull out UP TO your initial purchase price plus closing costs. So if you're planning to do any sort of rehab and force equity, delayed financing likely isn't the answer.

Hope that helps!

Hey Travis. Thanks a lot. I'd really appreciate that. Do you use go through Section 8 for any of your rentals?

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Quote from @Michael Smythe:

Conventional financing typically allows a lender to recognize all DOCUMENTED rehab costs that increase the value of the property.

Problem is you will NOT be able to get all this money back, only 70-75% of it.

Ok. So if I went Unconventional would I be able to get 90% or even 100% back? And if so, do you specific lenders that I'd be able to approach for that?

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Quote from @Sparkle Carlock:

Hi BP.! I'm trying to gain better understanding of how the money works when getting a HML for a flip. At this point, I've configured all the numbers and know that I'm able to get 100% rehab financed after my down payment. My questions here are:

1) how is the money from the loan held, handled and dispersed?

2) How do the GC/subs get the money needed to actually do the job? .

3) How does the seller get payment for the property I've been approved to purchase?

4) Do I have access or am I able to request the funds at some point?

I'd appreciate any advice or direction on how the process works immediately after purchasing the property has been accomplished :)

So how're things going on your project? Did you get started?

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Quote from @John Vietmeyer:

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Quote from @Chris Seveney:

Quote from @Jay Lancaster:

Quote from @Chris Seveney:

@Jay Lancaster

It can be one loan but in draws meaning you get funds for acquisition and then rehab as it progresses

This depends on your experience and how much money in the deal.

If you have no experience and no money I would do a Dutch loan at 15% and 5 points.

If you had experience and money it could go down to around 12% and 2 points.

Really depends on a lot of factors that were not listed or info included

So say it was 25k on the acquisition and 75k on the rehab where I put no in and this is my first deal. What exactly would the 15% and 5 points look like in repayment terms where we did a cash-out Refi upon project completion? In Detroit would I have to wait longer than they 3 months it would ideally take to complete the rehab?

Depends on who you use to refinance it out, but you would pay $20,000 in interest on the $100k.

Oh ok. So there's no rule that says I'd have to wait longer than 3 months to cash out Refi?

0 Votes

Detroit, Michigan

Quote from @Doug Smith:

Perhaps you can have an appraisal done or have an agreed-upon real estate agent (a good one) prepare a CMA, split the profit and have the one party that wants to keep it buy out the other by refinancing it on a longer term loan...whatever that form may take. I think that would be the simplest way to structure it.

What if both parties wanted to JV on the long-term rentals after the Cashout Refi to pay off the private lenders? What would that kind of contract look like between the parties and how would it differ from JV agreements if they were wholesaling?

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Has anyone ever done a JV between your company and another company on long-term buy, fix, and rent deals? If so, can you help me on what that contract looked like?

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Detroit, Michigan

Quote from @Account Closed:

Quote from @Jay Lancaster:

I really could use as much insight as you're ok with giving if you don't mind. My lender will definitely work with me.

0 Votes

Detroit, Michigan

All Forum Posts by: Jay Lancaster

Jay Lancaster has started 2 posts and replied 12 times.

Post: What are considered to be fair percentages to be paid on private money?

Post: What are considered to be fair percentages to be paid on private money?

Post: Cash Out Refi with a twist??

Post: Cash Out Refi with a twist??

Post: Looking for insight on flip financing. . .

Post: Cash Out Refi with a twist??

Post: What are considered to be fair percentages to be paid on private money?

Post: JV Setup for BRRR

Post: How to JV on a Fix & Rent

Post: What are considered to be fair percentages to be paid on private money?