All Forum Posts by: Jibu V.

 @Steve Lynch, agree 100%. This sounds like the right balance. 

 Thanks @Chris Seveney, that sounds like the right answer. What would be a diplomatic response to provide to the concerned neighbors in the adjoining unit?

Residents in one unit are on vacation and informed me ahead of time (as required by lease). A few weeks into the vacation, the residents in the other unit asked if their adjoining neighbors are on vacation. Is it okay to let them know that? Do I need to abide by any privacy or safety concerns before letting them know that? Do I need to get the permission of the vacationers? While these particular residents are fantastic and probably just asking out of concern from not seeing their neighbors in weeks, I am asking here so that I can understand what the standard practice is for others who have faced this. Thanks in advance.

I listen to the podcasts on Stitcher, but I can't seem to find the new 'On the Market' podcast there. Has anyone else found it on Stitcher or know if it will become available on Stitcher? Thanks.

Rather than refinancing your primary residence, a better option could be to pull out a HELOC on you primary. Usually little to no cost out of pocket for this option and you can get a a higher LTV. Also, it will only be accruing interest while you have it deployed. Lastly, doing a "cash out" refinance, like what you're considering, comes at a higher interest rate than doing a "rate and term" refinance (where you only refinance the current balance on your loan).

Interesting - what’s the logic behind this?

If you're refinancing at 75% of LTV, then your refinance loan will be $225K, assuming you pay for closing costs out of pocket (which will be a few thousand depending on your market). Assuming you still cash flow positive after this refinance, this would be considered a BRRRR with infinite returns. You would have nothing into the deal at the end (i.e. the equivalent of a free property), and in fact, have about $75K back to you at closing that you can use on another deal. Your equity is $75k, which is the difference between the value of the asset ($300k) and the liability ($225k).

In terms of profit, most people look at BRRRR from the cash flow perspective. You typically want minimum cash flow of $100, ideally at least $200, per unit. That is after expenses, including reserving for vacancies, maintenance, and property management.

Keep in mind that just because you can rehab and refinance all of your cash out, it doesn't mean it's a good BRRRR deal. If you have negative cash flow in the end because your rental income falls below your expenses, then a flip might be a better play for that deal.

Nice deal. Thanks for sharing. I couldn’t tell based on your post, but did you actually refinance the loan for the higher appraisal value? If you did refinance it, wouldn’t the cash flow have gone down (due to having a higher loan amount)?

Also, as @Maurice D. asked, how’d you find it off market? 

Lastly, could you break down what you spent the $25K of renovations on?

 What’s the solution for that if you’re investing at a distance?

 In terms of appraisals, it used to be that you could hire your own appraiser and use them for all of your transactions. With the changes in regulations, the lender has to use an appraisal management company which uses their own appraisers. You won’t know who the appraiser will be, so the intent is that there is less manipulation of appraisers.