All Forum Posts by: Jeffery Rayome

We are first time investors. We are trying to do everything without using personal capital. I’m trying to get recommendations on how you guys handle closing costs and other up front costs.

We have our first deal set up. 60 pp 30 rehab. 135 arv. We have a HML set up for 12% and 4 points but covering 100% pp/rehab at 70% arv. They also have refi availability at 75% arv. Our only catch is we will have to pay the 4 points and closing costs which I'm told will come to around 6k.

Can we get a separate loan for the 6k? Don't know how we build that into the BRRR strategy. Prob going to try to ask for seller to cover closing, but that still leaves us with closing at refi and point to pay out of pocket.

@Jim Pellerin

Craigslist is actually a great idea! Never would have thought of that. Thanks Jim!!

@Thor Sveinbjoernsson

This will Be very interesting to watch. I’m not sure panic selling would be a good move. If anything a market crash would be good for buy and hold investors. A market crash would flood the market with renters. People have to live somewhere. That would just be my humble assessment.

@Dave DeMarinis

Thank you that was very informative. I notice you said I can only have ten of the regular loans. If I want to carry say 40 properties how would I do so. After refinance do I sell the to my LLC?

@Sara Liskey

That is a really good idea and sounds beyond simple! Homage you found any draw backs with that method. I may be shifting my strategy now, thanks!!

@Yamundow Camara

I’m a newbie as well. In fact your steps ahead of me. I’m piggy backing off your post cause I have similar questions. The way I understand and plan to set up my accounts is:

Create an LLC for the properties(I plan on buy and hold). I was told that you should have a few properties inside an LLC but not put all properties in one LLC

Then the plan of action is to have one or two business accounts for each LLC. Prob only need one but I was thinking about two for each just to help divide money for management.

To the veterans does this sound accurate?

I'm not sure that you would need anything in each state, although I have read that does affect your taxes having a out of state business. I saw a video on how to avoid that by building an LLC inside of an LLC. So the way I understood it was you have an LLC under your name in your state, and the LLC owns your other LLC. I'm sure I got way to far down the rabbit hole watching that video. That rabbit hole sucks you in easy.

Great post!

@Nicholas L.

Thank you that does clarify a little better. Are there certain types of refinance options? I saw a post about refinancing your personal name rather than under your LLC. I know there are different types of mortgages, it would then follow logic there are different refinance options, or am I over thinking?

I am new to all of this. I have been researching for a few months now, but now I am trying to get into the details of everything. I know I want to use the brrr method to build my real estate investing portfolio. I plan on using some form of private money/ hard money to do the buying which seems pretty straight forward.

I am curious as how the refinance part of this works. From what I can tell that is the part that makes or breaks you. I have read that you need to have money down to refinance. My plan was to partner with a lender and limit my own money use. I am more interested in building the business rather than making money on it right away. While learning about the brrr method the refinance seemed like not a big deal as long as the numbers were right, but as I get into it the refinance seems like the hardest part. What am I missing or not understanding?

In my strategy I am building I don’t care about getting money upfront as I want to simply build an good collection of buy and holds. This will be more of a retirement plan as I don’t intend to touch any money in or around my real estate investing until I reach at least 30-40 properties.

@Joey Copper

This is my first post on BP so please be gentle. I have been researching for about six months, and am planning to take the plunge into buy and hold by June 2021. So admittedly I do not have hands on experience.

I found your article very interesting, and a counter to my own beliefs. I plan on creating my own management company to compliment my buy and hold company. I have decided to do this for one simple reason. Management companies in my experience suck. They are very limited at keeping tenants happy and don’t care about a thing other than collecting rent on time. I have been a renter for over 14 years now, and the story is the same with every management company I have dealt with. You can’t get a hold of them unless they are trying to collect rent. You email them it takes a week to get any response back. They flat out don’t care about you as a tenant. The only rental home I was happy with was one that I rented directly through the landlord. I can go on and on about the troubles I’ve had as a tenant with management companies.

So, due to our past experiences when my wife and I decided to go into this journey we knew that was something we wanted to change for other people. Call me green. Call me naive. I have however seen other people’s response to this post in the same way. A hired management company cares only about the numbers. I as a landlord care about my property and the numbers. Therefore I care about the tenants I put in my properties. No one else is more qualified to take care of your properties than the person that has all the risk, blood, sweat, and tears into them.

Who knows I may get five houses into my journey and discover that I am wrong. I do however love reading all the different view points on this subject! Thank you everyone for the insight.