All Forum Posts by: Jeremy England

My biggest issue in lending out construction money comes up when establishing my lien position. A higher interest rate compensates for the risk of being far down the line. How much interest is enough to make you comfortable with the loan? An important question would be, how much interest will you get paid, and how much return does that translate to over a given time period? If the numbers aren’t enough to justify the weak lien position, @Levi Rudder offered up a pretty decent solution with his notes investing strategy. Perhaps he is taking on new investors as clients.

Lending is ok, but requires a decent amount of legwork per transaction especially if the collateral is only the RE being rehabbed as in your describe transaction. In my opinion it would be better suited invested in something that will get you good returns without having to continually work to put your money out. With my smaller IRA accounts I will put them into residential notes that I get cashed out between 12-36 months and just rinse and repeat. That is also what we do with our non IRA money as well and we do it full time.

@Jeremy England - Congratulations on your deal. Going forward, is this the best you can expect to do in your market? If you can get a 100,000 Sofi loan, you must be doing very well personally. Try thinking outside the box in RE. My friend bought a 2000sf house in NJ for about 200k all-in near a college and gets $5000/mo (owner pays utilities) renting by the furnished bedroom to working professionals. borrowed 100% of the money at 7% from friends and family. So after taxes (600), utilities (900), and interest (1200), there’s still $2300/mo of cash to pay towards additional rehab / beautification and/or paying down the loan. Now this is more management (higher turnover) than a tenant who might stay in your house for the next 6 years, but could the cash flow be worth it?

@Jeremy England I just refinanced my rental. I also wanted to go with a local broker but their fees were high. I ended up going with Better.com, which partners with BP. Their fees are low and I believe you get a $500 credit through BP. The entire paperwork process was done online and was very smooth.

 A Community Bank in western NC. If you are interested in using his services, I could see if he will entertain out of state deals?

What type of returns are you looking for with your IRA?

Can you keep your money out 90% of the time with loans or transactional funding?

Ok. So seasoning only required if you don't want crummy commercial terms... Or using the delayed financing exception of less of PP or 70% of FMV.

The seasoning S should still be in the acronym. Many are surprised by the 6 month requirement to get conventional financing based on ARV.

Because BRRRR is a cute acronym that doesn't give the whole picture, another member has had to learn RO (Rip-Off fees) the hard way.

The other letter missing is the S for Seasoning. Lots of folks learn that one the hard way also!

Full proper acronym should be BRRSRORR, but it's not cute enough.   Spread the word.