All Forum Posts by: Joe Prew

@Chris Mason

i did not know that a 203K is a hard loan to pitch the seller.  you would agree that it takes a while to get the loan approved based on all the approvals, and extra paperwork required and that "extra time" is why the agent and seller may just disregard the deal.  is that correct? 

I assume that no one is "legally bound" to disregard a completely legitimate offer.  i think i hear a little sarcasm, which is fine.  I think your saying it may just be in the agent/sellers best interest to wait for quicker money.

thanks for the reply 

@Jaysen Medhurst 

technically i am not house hacking (or am i), because the 203k is like getting 2 loans (1 mortgage and 1 rehab). This FHA loan will require 3.5 % down with PMI. i would not move into my 1st multifamily house until the rehab is done, but i am going to live in the property once its completed. once the rehab is done, i will get it rented out, wait 6 months to 1 year and refinance my 1st house, (pull that money out and put it right back in), put 20% down on the house i am living in and that would seal the deal for my first multifamily deal. Next i find the next deal and get a 203k Loan for the 2nd multifamily house and repeat the process. Does that sound like i understand the process correctly?

i always though i would pull out the money and put that $ on my next house, but this way is a bit different.  i pull out the money and put in on that same property.  Technically, i would be taking out money i never really put into the deal.  All i will have in the deal is my 3.5%, since i am getting my rehab lumped into the loan.   

The 203k seems like it fits, but i can only have 1 FHA loan at a time (i think), which means i have to refinance and convert this 203k FHA to a conventional loan. I think this strategy will allow me to build my multifamily business, does that make sense?

The only thing is that when i refinance into conventional loans means i have to put 20% down, correct and have PMI? Isn't 20% to much to put down on a deal? this would allow me to work alone and not need any private money, for now.

@Jessica Zolotorofe

I want to pull my money out of the deal and refinance once i have tenants in, how would i ask the bank if i am a "good enough borrower" so i know i will be able to refinance.  I have been pre-approved for my first by, is that alone enough to know?  Would i simply ask the mortgage place if Refinance?   

Lastly, how would all the buying of properties and refinancing affect my credit or affect my ability to buy more properties?  Is that even a thing to worry about? 

3-part question:

1). Is the idea to pay back the hard money with the money we get back from the Refinance part of the deal? If not, how would we pay them back?

2). Can we refinance right away, is it generally 1 or two years out?

3). Lastly, what tools (documents/paperwork) should I use to have my strategy and numbers outlined so it looks and sounds professional when I'm sitting I'm pitching my ask for 80K to 100K.   

If I understand the BRRR method correctly, the first purchase will require a closing cost and then when we refinance the deal, we pay the closing cost again, is that correct? Or is it, that if we pay cash for the house the first time, there is no closing cost which means we only pay closing cost on the Refinance of the deal?

thanks Caleb, Greg, and Sam. That all makes a lot more sense now.

Gregory, I am looking to buy my first deal. I would like to see the numbers and the deal. after looking at the deal, I would know if its what I am looking for. I am looking at multi-families. Friend request me and lets chat. I need a wholesaler to work with in the are

The 2 Percent rule states that 100K homes should net around 2K per month, and the average house around here would be more like 250 for a 2 unit. There is no way I'm getting 5K for rents on a house that is 250K. Im more likely to get 800 to 1000 per month. Now at 1K a month rent that means I need to find a duplex or 2 plex at $50,000 and that seems fetched an impossible. Can someone help me better understand what I am missing.