All Forum Posts by: John Armando

@Mary Mitchell I agree with Mary. I pay for the garbage. It is easier for me to manage this rather than rely on a tenant to set this up and potentially result in garbage accumulation on the property. It’s a small expense, though may consider in the future upon the next turnover, charging this as an additional monthly expense as part of the rent.

@Wyatt Fisher am in the process of a similar approach. Purchasing a property that will cashflow $200/door with a $50,000 HELOC on my primary. It's about leverage, with current rates I can keep cash on hand, while paying very low interest, while leveraging my equity to buy a cashflowing property. I plan to pay down the HeLoC quickly, which increases my cashflow to about $350 per door. With the current rates, it is cheap money, and better to get a deal, than wait and save, or to have to leverage hard money at 12%. In an ideal scenario, would BRRRR and close that financing out, but In my area that is a challenge with the current market, tho always on the lookout!

@Lee Mast absolutely, as mentioned above call every bank you can in your area. And if one doesn't work on your first deal their terms and risk may change with time. Have 1 property with a portfolio Loan at 20% LTV, and they said they could do 2 for me total down the line. 3 months later for a second multi-family, they had changed their risk tolerance and could not do the 80% LTV, but I was readily able to go back to a different bank from my initial round of calls to get another 20% LTV loan, they are out there.

Hi All,

I've identified a property in my area that has been vacant for a number of years (previous owner passed away) and is currently owned free and clear by inheritance, based upon my research + local RE attorney. I am working to connect with the current owner to scope out the property and hope to use the BRRRR approach.

My question is, for the initial financing, I'm hoping to stay as liquid as possible to ensure sufficient cash on hand for the rehab. We have sufficient cash on hand + a HELOC on primary to probably buy with cash (depending on negotiated purchase price), but would then have to get creative for rehabbing, we also don't want to blow our safety net. Based on others experience (knowing cash is king), what are the pros and cons for each initial financing option and do you know of a resource that outlines some of these considerations?

As far as I can tell we have a few options for the initial purchase:

- conventional mortgage

- cash (cash, HELOC, 401k (definitely don't want to touch this, and/or other investments)

- HM/PM (could possibly work with some experienced partners to open up this line)

- seller financing

Estimated numbers:

ARV = ~$310k

Rehab: TBD, is a 1335 sq ft home, in a prime neighborhood, been vacant but exterior looks solid (once we tour the property with our GC, this will help us put hard numbers to the rehab)

Target Purchase: ~$110k and would be willing to go to $150k, such that we could at a minimum have ~$65k in rehab costs built in and still be under 70%ARV for the cash-out Refi. If we have to keep10-15k in the property I'd be ok with that.

Rental Rate: $1300-1600 per month

I'm very interested in going the Seller Financing route so would be interested to hear others thoughts on this approach with a BRRRR.

Kind regards!

Just thought I'd share this with the greater BP forum. I stumbled upon some Real Estate Openware courses on the MIT OpenCourseware system. Lots of interesting information. I plan to complete at least one course as part of my 2017 goals.!

https://ocw.mit.edu/courses/find-by-topic/#cat=business&subcat=realestate

Thank you @Josh Mitchell 

For the Refi out, in your experience would the lender then typically expect an LTV of <80%.

Also, we may plan to go non-FHA routes through local lenders that have other low-down programs.

Hello BP Team,

I'm trying to get a feel for what everyone's experience has been going from a low-down payment multi-family first time home buyer property to a single-family residence (would the single family residence still qualify for low-down options as it is essentially "trading up"). I know there are a lot of options, so looking for what other people's experiences have been.

In short, my fiancee and I are looking to buy a multi-family with low down to conserve our capital. We hope within a year (~ 1 year to meet owner-occupancy requirements) we would purchase a single family home to start our family. With this strategy, we would be able to house-hack for the first year, learn hands-on about being landlords, and be able to acquire a multi-family for little down.  

Is it possible, and what mechanisms from your experiences have worked, for using low-down options for both purchases? We have enough liquid to purchase one of the properties at 20-25% down if necessary, but would like to keep our liquid assets intact. 

Thank you for your guidance.

@Molly Armando @Brian P. We would definitely be interested in a SouthCoast REIA group. We are from Dartmouth, and looking for investments in NB/Fall River/Dartmouth/Fairhaven/Wareham locations.

I'd also be willing to help organize. 

@Breanne A.

Breanne, I would still account for property management regardless if you plan to use it now, or in 10 years. There will be a point, if you are looking to scale, in which you will need property management. If you go with a cashflowing deal including property management, you'd be in a great position when you someday need property management.

@Cassandra Staffieri

Welcome to BP Cassandra. There is a wealth of knowledge on the website about building wealth. BP is the leading community with incredibly intelligent, supportive, and caring individuals. I wish you the best of luck, and please reach out if you have any interest in chatting about the SouthCoast of MA.