All Forum Posts by: Joe Swanson

@Xavier G. very good points! The only reason I would not want to do a refi is because you've already paid nearly 1/3rd of the mortgage payments, only 11 years of a 15 yr mortgage left. Yes if you refi to a 30 year loan you will have lower payments, but for 19 additional years, and most likely at a higher APR for the longer loan.

There are some great ways to use HELOCs and Home equity loans to reduce the amount of interest you pay, aka more money to invest.  I found this article a while back and am still super intrigued by the idea.  I've just purchased my first investment property so haven't had a chance to use it yet.  https://www.listenmoneymatters.com/how-to-actually...

@Jeremy Paschedag You may want to consider not refinancing your first place to get the cash to start a BRRRR. That would make a whole new 15 yr mortgage and you'll be paying additional interest on it. Another option if you are short on cash would be to get a loan against the equity on the first house, or a home equity line of credit to finance a second property. And even another option is finding a hard money lender for the initial capital, but just make sure the numbers look right and that the short term loan is at least 12 months before the balloon payment AND you are sure that the refi is going to give you back enough cash to pay back the private lender.

Your timeframe of refinancing after a year is the right call.  Most lenders want you to hold the house for 1 year before refinancing it.  But this also gives you time to finish the repairs and get a tenant in there to start paying your mortgage.  Also once you refinance, you should have your cash back to start buying the next property and doing the same thing!

Hi Clay,

I am interested about this.  Can you PM me with more details?

Joe

Turned out there was an old bill due on the electric for that property.  They thought we may have been the previous owners trying to skip out on paying their final bills.  My Realtor was able to fax them over some paperwork and when we called back we had no issue getting the electric moved to our name and left on.

Finally some good news though, my contractor can start today as expected.

My parents live in Indy, I can them a POA to do it. I just thought what they're asking for is a bit above and beyond and was wondering if anyone else has gotten around this. I had 0 problems getting gas and water put in my name.

Should I word the POA to say my dad has permission to open an account at that specific address, or leave it generic for him to do it on my behalf at any address?

Hi BP.

I just closed on my first investment property Monday in Indianapolis. I'm having trouble getting the electric turned over and connected in my name. IPL (Indy Power & Light) is telling me that I need to go there in person, with the HUD to to prove that I own the place, there only other suggestion was getting someone a POA to do it for me. I'm in Texas and this is not possible for me to do. What can I do in order to get/keep the power turned on? I have a contractor starting there tomorrow, I'm guessing he'll need electricity.

Any help?

thanks,

Joe

Thanks @Andrew Postell that is super helpful.  Definitely better not to waste time then on getting that started.  My wife and I close on Monday, come Tuesday I'll call the bank to start it.

We already have an estimate of both loans drafted up, and the final one for the construction loan.  And "If the numbers work", in which case they do, we like it. (and if the appraisal comes in a bit higher or lower, I won't complain)  We just signed the final one today, making our closing date Monday.

 #InvestmentFirstHouse!!!!!!

Hello BP,

Has anyone used a bank for a mortgage loan and a construction loan? I am about to close on a property, doing a BRRRR strategy, and I'd like to know some people's experiences with it.

How mine is working...

-At Closing, I will get a loan for the cost of the purchase and the cost of rehab, the latter remaining at the bank.  This is a 6 Mo loan with a balloon payment of the full amount.

-My Contractor and I have written up a Draw Schedule of 4 payments that he will receive from the bank throughout the rehab process.  Rehab is 4-5 weeks estimated.   <-should I have been my own general contractor to receive the money myself to pay the contractor?

-Once the rehab is done it will get re-appraised and refinanced into the end loan (Mortgage loan)  which is a 30 yr fixed rate.

If all goes well, it'll be a very good little deal for us, if some things turn a bit, it'll still be worth it :)

What are your thoughts?  Experiences?

Joe

im currently working with Bloom Bank for financing.  I've also heard they do portfolio lending which would be helpful down the road.  I've been working with Dee.

@Fred Hardy

Hi Fred, welcome to BP.  I am in the same position you are just about.  I am from Indianapolis but now live in Austin.  My wife and I had an offer accepted last month at 15 N Colorado Avenue and are set to close in January.  Indianapolis is great market to invest in I think, especially for someone who isn't made of money.  It is super affordable to buy houses, and the house we got is simply enormous. @Morgan Nilsen is right about that sweet spot, we are buying the place for 40k and will be doing about 20-25k in rehab to it.  (all depending on these liens being taken care of before we will close).  Another great reason I'm investing in Indy is because of my contractor.  All I read about on here is people asking how they can find a good contractor, thankfully that is 1 thing I don't worry about.  My father has been doing contracting work and remodeling for 30+ years and does great work.  He doesn't do everything himself, he knows his limits, but has others that he trusts as well for different tasks; plumbing, electrical, etc.  I keep trying to get him on BP but he isn't too great with "the online".

I would love to find a good group on investors to really turn around a whole neighborhood with BRRRR properties with us. We are planning on buying 2 this year in that same neighborhood, maybe 3. I'm trying to stay away from hard money lending for now, I don't want to overextend myself before I have the process down pat.

PM me and we can chat.  I'm actually in Lebanon, IN with family until sunday.

Joe