All Forum Posts by: Jordan Black

So I am very new to this and I am very interested in the BRRRR method. I have spoken to the bank, who carries my own mortgage, on what I can and cannot buy through them. They very clearly laid out that they will not fund very distressed properties. Now, I dive into Private lending research and see that you can borrow from other lenders outside of the bank and they can potentially Fund the purchase and the Reno. THIS IS GREAT, its not my money! I feel like I know some people who can probably help me out with Lending on my first deal, but I have some questions that I cannot seem to answer no matter how many podcast and forums I read.

Here it goes (hypothetical),

- I ask this lender to loan me $80,000. $50,000 to purchase the property and $30,000 to rehab the property. he/she has agreed to loan me the money with 10% interest. (question 1, do you begin paying Principal and interest on Month 1 unless otherwise negotiated?)

- After 2 Months, once its all together, we rent out the home to bring in some cash flow while still paying the Lender Principal and Interest.

- After 1 year we go to refinance and the Home appraises for $100,000. THIS IS WHERE I GET CONFUSED (question 2, is the lender making his money on the interest we paid him throughout the year only? and then we just give him his $80,000 back after we refinance? or do we pay the interest throughout the year and pay him 10% on the $80,000 resulting in an additional $8,000?

- Second Confusing Part for me, if the bank will only pay out a LTV of 70%, then I will have to pay he/she the remaining balance out of pocket?

PLEASE HELP! I AM READY TO JUMP IN ON MY FIRST DEAL BUT DO'NT FULLY UNDERSTAND PAYING A PRIVATE LENDER.

THANK YOU!!!

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Originally posted by @John Teachout:

I've run into a similar situation with an airplane hangar. Originally there was going to be a two acre piece deeded to a non-profit organization but then that amount was changed to one acre. On a subsequent survey (20+ years later) the hangar was centered on the two acre original planned site and the property line of the one acre piece actually deeded over was literally down the center. Fortunately, the original owner of the property still owned the surrounding property and was able to sort it all out.

My guess is that there is something similar going on with this property and that there can be a resolution. It would certainly be worth investigating. But note that the reduced value may be due to some other reason so don't get too distracted by the survey and miss other due diligence items. If there's a septic system or well, make sure that those wind up on the correct property too.

Thanks for the good info!

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Originally posted by @Wayne Brooks:

@Jordan Black Certainly not out of line at all. Research the deed to this house, from the seller. See Exactly how the legal description reads. The approach to neighbor would be something like “hey, about the house next door, I’m trying to figure this out, seems like somebody may have messed something up when you sold it. Any ideas what happened?” ...go from there .

Also, find out Exactly what the side yard requirements are from your county, if you could get the property lines redrawn.

Thanks for the tip! Definitely will look into this more.

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Originally posted by @Wayne Brooks:

Unless the next door owner 1) will sell you the property you need AND 2) there is enough room between the houses that Both would meet the side yard set back requirements...it’s a no go.

First investigate to see if the property is actually where you think it is. Talk to the seller about it, maybe there was some unrecorded deal, or a recorded deal you have missed, which may or may not solve the problem.

Thanks @WayneBrooks! from the county lines I have looked into it is definitely in the middle of the home. Is it out of line to personally reach out to the neighboring home owner to see if they are willing to sell a portion of their land? there is enough room for both homes to exist.

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Today while searching for new properties in my area I ran across a home that looked to be in the middle of a re-model. It was purchased a year prior at $85,000 and now listed for $34,000, so it grabbed my attention. It definitely needed some more work but comps in the area were a minimum of 135K. The more I dove into the property I found out the house was being sold as QCD and I assumed this was because the owner was in Foreclosure and possibly realized THE PROPERTY LINE WAS IN THE MIDDLE OF THE HOUSE. The home was encroaching the neighboring property lin by more than 28 feet.

Has anyone every experienced anything like this? if so, how would you go about approaching the property and possibly getting the property lines redrawn?

From what I have gathered, the encroached property owner had both pieces of land at some time or another...

any and all comments appreciated :)

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All Forum Posts by: Jordan Black

Jordan Black has started 2 posts and replied 5 times.

Post: Private Lending HELP

Post: Property Line in the middle of House

Post: Property Line in the middle of House

Post: Property Line in the middle of House

Post: Property Line in the middle of House