All Forum Posts by: Jordan Northrup

Hello Everyone, I have a deal that I need help with. Here's the situation:

I have an extended family member on my wife's side who has a property that she owns free and clear. The lady has no mind for business and is so risk adverse that often
makes her own situation worse by inaction. She owns about 5 properties and most of them are vacant. This particular one is in Northern Virginia. I would estimate that it
needs about $75k worth of work with an ARV of about $550,000. This is supported by multiple comps in the neighbor hood.

Rather than selling to a stranger, she'd like to sell to me and offer seller financing. She would sell me the house for a nominal amount so that I can get it deeded to my
LLC, then I would begin the renovations. After fixing it up, I can either flip or do a BRRRR cashout refi and get a tenant in there. If I can get it to appraise for
$550k, 75% would be $412,500, less $75k renovations, the amount to her would be $337,500.

The hangup will be in getting her to agree to the $337,500. In addition to risk aversion, she also has unrealistic expectations. She thinks the home is worth over $400k in
its present condition. There's no way.

Can you think of any traps that I'm not seeing? What do you think of the overall deal? Looking forward to hearing your feedback!

Thanks guys, I really appreciate the wisdom and advice!

Thanks Chris.  In this case, Lender A had done a lot of the work.  We stumbled across Lender B kind of by accident.  Had Lender A offered better terms, I would have stayed.  His literal quote was, "is saving $8,000 in equity worth hurting people and their families that have put work into this?"

That's a low blow if you ask me.  What about my family? What about my goals?  Those don't seem to matter to Lender A.

Hey Dennis, thanks for the reply.  I see your point and I do believe that relationships are important.  In this case, the first lender's whiny attitude and emotional appeal that I'm taking food out of his kids' mouths doesn't sit well with me at all. 

Hey guys, I need some quick advice on a home refi I'm doing.

I'm refinancing my primary home. The goal is to do a no-cashout refi to drop the PMI and get the payment as low as possible. This house will become a rental when I move in 9-12 months. I've been working with a smaller, regional bank. They gave me decent terms, but I had to buy the rate down and pay higher lender costs. However, I came across another lender who is a national lender and they offered much better terms. Same rate, no discount points, and $900 lender credit, and I'll save $6000 in equity.

Here's the dilemma.  I'm really close to closing with the first company and the loan officer is a commission based guy.  He's playing the emotional card like "I'm 100% commissioned, my family has to eat, are the better terms worth a few bucks a month to you?" Stuff like that.

Those kind of emotional pleas don't really sit well with me; like why didn't he give me better terms in the beginning?  So what is your advice?  Should cancel with him, save money, and burn a bridge?  Or should I take the lesser terms, lose the equity, and maintain a relationship?

Hey guys, newbie here joining the conversation...instead of HML, what about finding investors with HELOCs who have money that needs to go to work? What kind of a deal structure would that look like? Would the private lender charge points upfront and a higher interest rate?

Hey Gents, thanks for taking the time to critique this deal.  First of all, I just used the numbers that auto-populated in the rental calculators.  Your estimates sound much more realistic. 

Secondly, I see your point about buying the tenant risk.  This particular deal is a little unique.  The building is located in Quantico Town.  It's a civilian town inside of Marine Corps Base Quantico in Northern Virginia.  The current tenant is a small-time defense contractor.  Personally, I work in Marine Corps finance and know all too well how the defense contracting game works.  Contracts end on a whim.  This tenant could lose a contract and decide to break their lease.  Then I'd have to look for another defense contractor tenant.  

Thanks for helping me learn on this!

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*This link comes directly from our calculators, based on information input by the member who posted.

I came across this commercial investment opportunity in the next town over. There's a current tenant with 8 years left on a 10 year lease. I've never analyzed commercial before, so I'm sure I missed something. I'd love a seasoned investor's take on what's missing with my analysis.

I don't ask, "Can I afford this." I've learned to ask "How can I afford this?"

If the numbers are good, I'd like to partner with someone on this. I'd provide the deal and the hustle; I'd be looking for someone to help with the down payment.  The history shows that the property has been off and on the market for several years.  It was originally listed at $1.8M, now it's $1.5M.  I did the analysis with offering $1.2M

Thanks all!

Dave, thanks for the advice.  I'll look into other routes for raising enough capital to make a down payment.  Would you ever dip into your savings/emergency fund to get a down payment together?

Hey Everyone,

I'm an REI newbie looking for my first deal. My wife and I have excellent incomes, sizeable investments, and $30,000 saved up in our emergency fund. I want to start investing in real estate and exploring options to come up with a down payment big enough to get a good interest rate, get under 80% LTV, and have a decent cash flow.

Let's say I find a potential deal and the down payment was $50,000.  I have nearly $400,000 in investment accounts...would I be able to liquidate $50,000 and 1031 that money into the down payment and avoid the capital gains taxes?