All Forum Posts by: Account Closed

Hello BP,

I currently have a house under contract. Here are the specs.

Purchase Price: 127,500

ARV: 240,000 - 260,000

Estimated Rehab: 50-80K

I will be using hard money to get this financed so there will be hefty holding costs for the interest only payments (~1100 / month). I plan to be in and out of the rehab in 6 months (fingers crossed).

I am still waiting on itemized bids from the GCs that walked the property. My mortgage contingency ends on 5/22. 

As of now, I have two options for financing. 

1. Lender A is providing me 65% LTC to fund the purchase price + rehab. 15% of the purchase price down payment. This will yield me about 52K for rehab budget. If the rehab budget is over this amount, that's just more down payment % I would need to fund the deal. Once I submit the renovation budget, their lending process will take about 2-3 weeks to complete, which will go past my contingency date. 

2. Lender B is providing me 70% LTC. 30% of the purchase price down payment. 100% of rehab provided. 5 - 7 days close. 

My questions are: 

Do I go with Lender A and ask for an extension on my mortgage contingency? I do like them better as a lender in general, but that would give the sellers to back out. What would be a good way to ask sellers for an extension? Or should I go with Lender B and pay a higher % down payment but have peace of mind knowing I close? If my itemized bids come back higher than what I estimated, I do want to be able to back out of the deal as mortgage will fall through. (ie: I can't afford the down payment of the new loan structure with higher rehab costs)

The ARV range is very accurate with recent sales of March - May 2023. I do worry about the appraisal coming in lower than my ARV in 6 months when it comes time to refinance (due to our high interest rate environment / more supply coming on the market = buyer's market and homes going under asking). Are there any ways to mitigate this? I was thinking of holding the hard money loan for as long as I can until the ARV comes out to what I need it to be, but this sounds risky.

If rehab budget does come out to be 80K, it would really be a deal killer. Would any of you guys still pursue the deal? I already fell in love with the property because of the location so I'm afraid I am too close to it to analyze this deal correctly. This location is very up and coming and I know appreciation will treat me nicely in the coming years if I hold long enough. Rents are strong too, so not worried about that either. 

Thank you all in advance!

@Erik Estrada @Eric Goldman

So for my project, I would need a hard money / bridge lender without prepayment penalty. And when I refinance, I just need to make sure I am adhering to the specific lender's seasoning period. Understood... thank you!!!

Can you guys refer me to a reputable hard money lender in PA?

Good Evening BP!

I was wondering if anyone had any insight on my current situation. I am looking to close on a property with my partner into our LLC. Is our only loan option the DSCR loan? Anyone have any experience utilizing a DSCR loan for a BRRRR deal? The property is NOT a full gut, but rather a cosmetic - moderate rehab.

I guess the other option would be hard money lending. If anyone has any lenders licensed in PA that work with BRRRR investors, please let me know!

Thank Yall in Advance!!

@Darin Moon @Jayson Cain @Gloria N Gear

Hello! I am also looking into the NW Corner of IN, more specifically Gary (Marquette Park). I am looking to set up a Short Term Rental there and was wondering if you could offer any insights on the neighborhood? IE: streets to avoid, STR regulation changes (if any), long term rental feasibility etc

I just stumbled upon this market today so I'm still in my research phase. Are there any other STR friendly areas yall would recommend? And if anyone has an STR in this area, how are you guys doing in comparison to last year?

Thank you in advance, can't to hear from yall!

@Nicholas Bosco THX for letting me use your post to connect with these awesome people :)

Forgot to include... I am renting 3 bedrooms in a SFH!

Hello BP World,

I am in the middle of acquiring tenants for my house hack. 

I have a standard template that I am currently editing.. Anyone have any suggestions on what I should definitely be including in my lease (in regards to house hacking)? 

Thanks in advance!

@Michael Duncan Yes, I am definitely working on a budget but would have more accurate numbers with potential rents coming in

@Rose White I am trying to stay away from townhouses etc.. don't want hoa fees affecting my potential cash flow haha. I will take your advice and hold off on lenders for now and focus my energy and finding that rockstar real estate agent!

@Kevin Zolea @Sarita Scherpereel I have been itching to go to a local meet up!! I definitely will attend as soon as they are being held again. 

Hello!

I am looking to purchase a home by January 2021. I am looking to house hack a SFH or duplex and I haven't started looking yet. Here's my to-do list so far.. can anyone add to this?

1. Get pre-approval letter / shop mortgage rates

2. Find a investor-friendly real estate agent

3. Open houses / drive around the neighborhood

Thanks in advance!

@Jonathan Bombaci That's a great idea. I should look into my lending options so I have an idea of how much I would need to save. That would help me make a better decision. Thank you!

@Frank Geiger Yes! Hopefully I can find a cash flowing property to do that. Any extra $ helps when paying off debt!

@Scott Passman You are completely correct. I shouldn't be worrying about what could happen. And if something does happen, which it probably will at some point, it will only help me be better prepared for my future endeavors. Thank you for the words of wisdom.

So the general consensus seems like a 4% interest on my loans isn't too bad. And the benefit of owning a MFH is a lot more worth it. I have made the decision to start saving up for a MFH. Since I have some time on my hands while I save money, I guess it's time for me to start looking at homes, analyzing deals, learning how to be a good landlord, financing options, etc. Thanks yall!

Hello All,

I am just getting started on my path to financial freedom through Real Estate. With my first post on BP, I would like to ask for any advice regarding my current situation.

I am a recent pharmacy school grad with about 85k student loans at around ~4% interest rate. 

I've been predominantly using my income to pay off this debt as fast as I can and am expecting to pay it off completely within 2.5 years.

My question is this: Rather than dumping the extra money into my student loans, should I save that money to invest it in a duplex? 

My thinking is this: If I can manage to find a duplex to house hack, I would be benefiting from

• 1. Saving money on rent. I pay about 1k in rent right now, so if I can pay anything less than that while living in the duplex.. win?
• 2. Appreciation in the value of my home
• 3. Building Equity in the home early (My plan is to take out a HELOC for my second investment, hopefully in the near future)
• 4. Tax deductions

The downsides:

1. 1. I would be paying more interest during the time I am saving up for this investment
   1. If my ROI is better than 4%, would I be offsetting this cost?

1. 2. What if my duplex turns out to be a nightmare (Unforeseen expenses and repairs, Bad Tenant, ETC)

Any insight on this is greatly appreciated! Anyone been in a similar situation? Am I missing any pros/cons? 

Best,

JYC