All Forum Posts by: Joe Jung

@Ryan Deasy can you please share?

@Eliott Elias can you please share?

Hello,

I was hoping to find some lenders that is willing to cash out refi with minimal seasoning.  Can anyone help me find them?

Thank you.

@Taylor L. Hi Taylor, that won't be a problem. What I'm worried about are my structures. I was told having them all in one LLC just creates issues because if that LLC is sued, all properties are part or the company. But creating LLC for each property is not only expensive, but time consuming as well.

How would you structure it? How many LLC or just one? That's kind of what I was hoping to figure out

@Zachary Jensen I'm almost there. I have my 8th home under contract and so I'm beginning my search. What I'm trying to do is find a reliable private or hard money lender that will do a cash out refi once I hit 11 properties

Quote from @Randall Alan:

Quote from @Joe Jung:

Hello everyone,

I'm a fairly new investor with 5 properties (1 Primary and 4 in Cleveland, OH) to my name and I'm starting to branch out.  I'll be purchasing a home a Kansas City as well as somewhere in TN and quickly approaching my 10 limit.  Until now, my goal has been simple, get to 10 properties using conventional loans using umbrella loan to mitigate my risk.  That's coming to an end now and it's forcing me to look at other avenues which I narrowed to portfolio lenders, commercial lenders, and hard money lenders. 

I've noticed that all hard money lenders are requiring an LLC (some requiring to be in Delaware) and obviously, commercial lenders will require some form of an entity as well. So my question is this - How have people scaled? Do you have all one-hundred properties in the same corp? Putting each home in a different LLC seems to be a massive headache, not to mention keeping track of all the EIN and entity. I feel like if I'm doing 100 units, those would be worth having in a different entity under a holding company. Not to mention, I primarily invest out of state and I have an LLC in Washington state then I registered it in Ohio when I got my first property and I can't imagine doing that in EVERY state.

So veterans, how have you done this when expanding out of state?  I know I'm barely going to hit 10 properties, but I want to expand and scale in a smart fashion.

Thank you in advance.

Several things to understand here… first, it's 10 properties in your name. If you are married, you can also put 10 in your wife's name. We still ran out, so did a commercial consolidation loan with a lender that held their own loans (portfolio lender)… merging 5 smaller loans into one commercial loan in an LLC name. Yes we had to personally guarantee, but this loan did not show up / get counted the next time we financed a property… but can't swear it was suppose to happen that way when I read the Fannie Mae guidelines.

Second… we have been employing a strategy of cash out refinancing our older properties (before the interest rate hiked) where we would be able to pull enough cash out due to appreciation to pay off other loans we had taken out previously.  It let us drop our interest rate and free up loan slots as well.  It might not work as well now with the rate environment, but you do what the market gives you at any given time. 

We have also sold off properties that haven’t worked well for us… neighborhood worse than expected, and problem properties… again freeing up loan slots and using accumulated equity to pay off other properties.  We have gone from 19 loans to 9 in the past 2 years… without sacrificing cash-flow!  (That’s the best part!)  The pay down of loans, and higher interest rates helped offset the loss of revenue from properties we sold.  

We have bought all our properties in our personal names, as you can't do a Fannie Mae loan (up front) in an LLC name on residential financing. We do have a big umbrella policy to offset some of the risk of taking that approach.

All the best!

randy 

Thanks Randy, I have definitely thought about it where I payoff loans before moving to the next deal, but right now that method doesn't make sense for me as I'm not as equity rich and the higher rate would kill my cashflow.  I do feel like the overall progress would be slowed for me as well, but defnitely appreciate the insight!

@Zachary Jensen you can't do cash out refi once you hit 10 properties or without 6 month seasoning

Hello everyone,

I'm a fairly new investor with 5 properties (1 Primary and 4 in Cleveland, OH) to my name and I'm starting to branch out.  I'll be purchasing a home a Kansas City as well as somewhere in TN and quickly approaching my 10 limit.  Until now, my goal has been simple, get to 10 properties using conventional loans using umbrella loan to mitigate my risk.  That's coming to an end now and it's forcing me to look at other avenues which I narrowed to portfolio lenders, commercial lenders, and hard money lenders. 

I've noticed that all hard money lenders are requiring an LLC (some requiring to be in Delaware) and obviously, commercial lenders will require some form of an entity as well. So my question is this - How have people scaled? Do you have all one-hundred properties in the same corp? Putting each home in a different LLC seems to be a massive headache, not to mention keeping track of all the EIN and entity. I feel like if I'm doing 100 units, those would be worth having in a different entity under a holding company. Not to mention, I primarily invest out of state and I have an LLC in Washington state then I registered it in Ohio when I got my first property and I can't imagine doing that in EVERY state.

So veterans, how have you done this when expanding out of state?  I know I'm barely going to hit 10 properties, but I want to expand and scale in a smart fashion.

Thank you in advance.

Quote from @Account Closed:

@Joe Jung Private lenders usually want to keep things under 12 months to keep their profits as high as possible. Sounds like if you got cash from HELOC, you don't need private lender and can go the conventional route

 Hi Zachary, sorry, I might not be explaining myself.  My goal is to buy something is cash, rehab it, rent it out, and then do a cashout refi on the property and add the cash I invested back out.  Once I hit the 10 financed property with fannie and freddie, I either have to go commercial loan or hard money lender from what I can understand.

@Joe Hammel hey Joe, I was thinking about expanding to Detroit. Care to connect?