All Forum Posts by: John Bongers

 Shiloh,

Thanks for the response. If I went forward with this, I'd only be taking out 80-85% equity because I found a decent deal and used the BRRRR method. Also, I do have some cash reserves and my W2 day job makes enough to cover any potential issues. The primary reason I might do this route is to begin a track record. I've got to stary somewhere and this potentially seems as safe as I can make it (for me and the potential investor).

  Does this sound reasonable for a beginner? In speaking with others I've also come to realize that I definitely need an attorney to draw up the documents. Additionally, is placing a 2nd lien on a property as simple as contacting a title company and doing it through them?

Thanks

John

 Looking a people's replies, I agreed that a lawyer needs to do this part for me.

Don,

Does that mean I'll get in legal trouble or does that mean I should have a real estate attorney draw up the documents.

Thanks

John

Kevin,

I'm looking at that route as well, but I just bought the property in September, so I won't be able to refi. Also, by the time I hit the 6-12 months where I can refi I'm worried that rates will be higher and that housing prices might start slipping down. I did a mini version of a BRRRR on the property right after I bought it and it was a decent deal, but I don't think a refi would get all my cash out. If this is the case, I won't be able to come up with a down payment for a 2nd property unless I get some creative financing.

I thought using my current cashflow and cashflow going forward as 2nd loan payments, I could get the money for my next down payment much earlier.

  I'm new to this stuff, so I'd really appreciate your thoughts.

Thanks

John

Hey,

Does anyone know how to write a promissory note and a 2nd lien on a rental property on Ohio. I'm looking for investors so I can scale up my rental portfolio. I currently have one unit, but I'd like to bring on an investor so I can get almost all my equity out and use it for a down payment on a 2nd property. Basically, I want to borrow 35K at 12% interest and pay it back over 6. This would bring my HELOC loan to about zero, so I'm liquid to put a down payment on a 2nd property. To pay off the 35K would require about 75% of my cash flow from my 1st rental, leaving 25% for wiggle room.

Please let me know what you think.

John Bongers

Hello,

I've just bought my first rental property and am treating it as a mini BRRRR where I'm hoping to get a decent amount of my money back when I refinance sometime down the road. To get the deal to go through I used a HELOC for the down payment which leaves cash strapped so I can't scale up at all. Once my place is rented it will cashflow well and I was thinking of looking for an unsecured loan where I basically set the term so that 90% of my cash flow over the next 6 years would pay off the loan. Also, when I do refinance, I could pay off the loan early. With the cashflow of this property it would be something like $40,000 over 6 years at 8%. Additionally, I would try to pay off the loan early using the refinance, but payback the entire 8% over 6 years. Basically, if I pay it off early, it would bump up the 8% to 9-10%.

  Does this sound like a real strategy, or am I way off? Also, would this limit my ability to get traditional financing on a second property? My goal (if this is even remotely possible) is to use this idea to scale up now so that I can pay off these unsecured loan and leave my W2 job by 2032.

Any advice would be greatly appreciated.

Thanks

John Bongers

@Mark Nickoson

Thanks for the feedback. I've noticed that the auctions have been fairly competitive the last few months. What I've also noticed is that since housing prices have risen so much in the last 12-24 months that the appraisal values used at auction are way below the actual potential values of the houses. I think this creates a situation where even with an expensive rehab, once the house is refinanced and 70% of the equity is take out, I'll still end up receiving a check from the refi.  I've also noticed that if I go this route, the properties cash flow might be an issue.

  I'd really like to know what you think, and how you went about your purchase at auction. Maybe I could grab you a coffee and we could talk about it.

John Bongers

@Chris Seveney

Thanks for the feedback. By saying the last few years have been slanted to a sellers' market, are you referring to low supply and high demand, which has driven housing prices up. Do I just keep looking and wait for a correction in housing prices before I dive in?

Thanks

John

@Chris Seveney

I had no idea that foreclosures might need that kind of budget to get them up and running. What would you suggest for a first time investor. Most other options don't seem to have a ROI that's very attractive.
any suggestions would be greatly appreciated. 
Thanks

John Bongers

Hello,

  I'm just getting my feet wet in real estate investing and am interested in foreclosures in the Dayton area. I may be new, but in looking at foreclosure prices it seems like there is some real potential for a buy and hold deal. I know the major pro is the price and the major con is that you can't see the inside. With that said, by doing some research and physically checking out the place as much as possible, I think opportunity is still there. 

 Is there anyone who specializes in buy and hold deals with foreclosures in Dayton? If so, I'd be more than happy to buy you a coffee if I can pick your brain for a bit if you have time.

Thanks

John Bongers