All Forum Posts by: Job Hempy

@Alexander Felice

Thank you for the reply. This motivates me to find a different lender, as I have not accepted any terms yet. Again I have not received a settlement statement, but I believe I'd be walking away with less than 67k after close, still paying the 7.825% on the full 75k. Just seems like a lot of added risk/over leveraging for an additional 2.6% ROI to me.

I have completed the reno on my first BRRR. Numbers below:

2/bd 1/ba w/ higher end finishes. I self manage the property

Purchase price: 16k

Rehab/holding costs to date: 69k

Appraised: 97.9k

Rent: 1000/mo 

Vacancy: 50/mo

Repairs: 50/mo

Capex: 70/mo (new furnace, roof, appliances, plumbing, wiring, everything. expect little-no capex for awhile)

Taxes: 47.83/mo
Cash flow: 782/mo

ROI:13.2%

So far, I'm feeling alright. I don't think I knocked it out of the park, I learned a lot, and would do things differently (as far as rehab) now. I'm happy with a 13% ROI.

I just got a LOI from a private/hard money lender. I have not received any sort of settlement statement that shows disbursement amounts, which seems weird. I've gotten a loan on my primary residence before, never an investment, so I'm not sure if that's why I'm so blown away.

Details below:

75% LTV

7.825% Interest

4 points or 5k (whichever is GREATER)

$1,495 in processing and underwriting fees

I BELIEVE I'm still on the cuff for an appraisal and potential rental analysis. (650+)

After refi, numbers below:

Expenses: 759.03

Cashflow: 240.97

ROI: 15.8%

The numbers obviously make sense, and show improvement with refi. But that money seems really expensive. Can you guys share what you're paying for a similar loan? Who are you guys using for your No Doc/No DTI/Cash out refi loans? Unfortunately I just bought my primary, so my DTI is high making traditional financing not possible.

Thoughts?

I am finding some projects here and there. But we target value add and have some sweat equity in the properties as well, so that may account for my differences 

I currently operate my three rentals in C class neighborhoods.

I'm cash flowing between 350-450 per door. I do purchase cash and manage myself, so my only expenses are repairs, cap ex, and insurance. Tenants cover water and other utilities.

I've had one issue so far, where I had to get a tenant out due to non pay. We agreed she had two weeks to move and I wouldn't file eviction. She left, place was in solid shape. Had it occupied about 5-6 days later.

WHY I THINK IVE FOUND SUCCESS: I do not "over rehab" these properties.  I simply use higher end finishings to attract the higher end customer base in the low end neighborhood. I source my "higher end finishings" typically from Habitat for Humanity ReStore it, where I get discounted material.  There are definitely more bad tenants than there are good tenants in these neighborhoods, so I'm unsure how much I can scale this model, but its worked thus far.

I currently have two SFH rentals, and closing my third. These properties are distressed, and need serious rehab work. This will be the first time I have not had a realtor, title company, and atty involved in a purchase.

Here's where I'm at:

We've signed purchase agreement ($16k PP no EMD), and are ready to close. Waiving all finance/inspection/etc. contingencies. Seller is pushing to meet at bank and have Deed notarized, transfer funds same day and walking away. Doesn't the deed need to be recorded before I'm fully protected in the transaction? What other steps are there that I'm missing?

Seller seems 100% legit (I did my own title search, he has title. Taxes paid in advance actually, no liens could be found through recorder online), however you never know in this world. In the back of my head I feel like there's a loophole I'm missing and he's going to walk with my money.

Should I be paying the premium of having an attorney draft all documents and handle the transaction when the purchase price is so low in the first place? It's hard to justify $1000 to the atty, + title ins and all other fees associated with a typical close.

If you kept the asset* it would only take 8 months to also get that 50k+

I think it completely depends on your goals. Personally I would keep the cash flowing asset, especially at 7,000/month. If you did the 1031 and pocketed 50k, it would only take 8 months to also have that 50k in your account. My .02

Alex A. As far as starting a small loan business I can't speak as I have no experience there. I can however say that I would be willing to be a client. I've had a few lenders try to explain why they won't put two houses on one line and yet to hear a reason that makes sense to me. They've made it seem like it's an "unofficial industry standard" to only have 1 house on each line.

@David Antulis

Thanks for the lead. I contacted Huntington and their terms aren't bad at all. Minimum HELOC of 10k. The only issue was that they could do two lines on two separate properties, but one had to be primary, and the other could be an investment property. Both of mine are rentals, unfortunately. Another smaller downside was that they only go up to 70% LTV.

Anybody have a lead on a lender that might group or allow two lines on two separate investment properties?

I currently own two investment properties (a 3/1 and 2/1) free and clear for a little over a year now. I'd like to either take out a HELOC or home equity loan, however I'm running into a few roadblocks.

One issue is that I would like to group both properties together in one loan to avoid excessive closing costs and all around headache. A second reason for wanting to do this is that both properties value are relatively low (it seems a lot of banks have a minimum loan of 50-70k). I'm not sure what they would appraise at, but the county auditor has them at about 44k and 21k respectively. Both of those values have not been updated since I renovated the properties though.

Can anybody point me in the direction of a local lender that might work with these terms, or maybe what I'm looking for doesn't exist?