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All Forum Posts by: James Calabrese

James Calabrese has started 4 posts and replied 8 times.

Thanks @Chris Viglietta. I do love @Chris Mason's recommendation to get the HML working directly with the traditional lender. Let the experts communicate directly and remove myself a bit from the middle of everything.

Chris M also mentioned "If you buy using hard money, and it's officially recorded with the county as a mortgage, you can start the process of rate/term refinance out of the hard money the day after closing using plain boring 30 year fixed Fannie financing (at least I can, I can't speak for what other lenders do). I have no idea if your DTI needs it, but the lesser of appraised market rents or current actual signed lease with an actual tenant will be used."

How is the 'appraised market rent' typically determined? Are there useful tools for me to get a sense of what market rents are, or should I just scroll through craigslist rentals, and contact local agents and management companies? 

Reread everyone's advice and researched delayed financing a touch. I want to ensure I'm understanding the impact of the below rules of delayed financing: 

1) The new loan size may not exceed the property's original purchase price

2) Mortgages via Delayed Financing are limited to 70% LTV

So with delayed financing I'll never recoup my entire cash payment+rehab costs. I'll be restricted to the lesser of the 2 rules above, which means the best I could do is recover the purchase price. Correct?

The advantage of seasoning for 6 months is that I can then do a traditional refi (not through BoA of course) and get a loan at 70% ARV. If I bought smart, then 70% ARV could be enough to recoup my entire purchase+rehab.

@Chris Mason don't hold back on BoA, tell me how you really feel. Seriously though, thank you everyone for the input here. I'm on the road right now so will need to reread tonight to fully digest but overall it is nice to know what I already suspected that major banks are not a great option, and that there are other ways to skin a cat here. Also great to know about pre-payment penalties from hard money. 

@Chris Viglietta small world! I'll shoot you a direct message to connect. Would love to pick your brain more and gossip about Michelle of course. 

Hey BP community,

How much seasoning (history of rental income) is needed when going to execute the ‘refinance' section of the BRRR strategy. I was speaking with Bank of America the other week and was told they'd need to see 2 years of rental income on investment property before they'd refinance. This is obviously problematic if I'm going to buy in cash with hard/private money which I'm aiming to pay back as quickly as possible.

I’m hoping smaller banks have flexibility to refinance more quickly after I occupy a unit with renters.

I’ll certainly be chatting with other banks, but wanted to see what has been other people’s experience? Was BoA an anomaly or the norm? Does it depend greatly on the property itself and my ability to build trust with the bank?

Thanks for your input here. 

Hey BP Community,

I own my primary residence and am working to buy my first investment property (currently looking in Long Beach, CA. I live in Santa Monica, CA). One thing I’m a little turned around on right now is weather I should be focusing on financing or finding a deal. I’m currently doing a bit of both in parallel.

On the financing front, I work a W2 job earning a solid wage and have a traditional loan through Bank of America on my primary residence. That mortgage along with a car payment is my only debt. I have about 30k of my own cash I’d be comfortable spending towards the investment if needed, and could get about another 40k via a home equity loan (this 40k # coming out of a conversation with Bank of America).

My initial thoughts on raising the funds needed for an investment are to speak with many large and local banks to explore my loan options, and to solicit friends and family who have raised interest in investing with me if I find a deal. I also may have a rout to access more significant capital via a partnership I’m exploring.

So where should my time be focused right now? The options for financing are numerous – do I need to lock down more clarity on where my money is coming from before I spin my wheels finding a deal? That way I’m ready to jump on a deal when I find it in an active LA market. Or can I not have a serious financing conversation until I have a deal to bring to the table? Can I be submitting offers on deals w/out my financing perfectly known, and then use the contingency period to lock down funds?

I want to be efficient and professional so as not to waste other people’s time and energy.

Thanks in advance for your help!

Thanks @Jean Bolger and @Brandon Hall. That is helpful input. 

To Jean's point that I need income to deduct expenses from - can that be my W-2 income which is unrelated to investing? 

To Brandon's comments - Good point that I can go remote with my CPA, but they should have California expertise right? In order to keep my deductions organized, would you recommend a credit card that is only used for business expenses? Should that likely be a small business card? Also, shout out to Washington DC! I grew up in Fairfax, VA and lived in Shaw Howard in DC for 4 years before moving out to Santa Monica.

Have been studying up for a bit, and it's time for me to get started as an investor. I read the other day that if I form a LLC I could be writing off A LOT of my daily expenses since my home is partially used as an office for my investing work and I may drive/fly to visit investment opportunities, etc etc. This seemed amazing to me, and I couldn't wait to form a LLC, get a credit card for business expenses, and feel smug come tax day.

Separately, I've read a lot of debates around buying investments under my personal name or under a LLC. Regardless of the right answer to that debate for me, why the heck don't a go ahead and form my LLC so I can write off all these business expenses (internet, gas, phone, flights, etc). Can I be doing these right offs under and LLC even if I end up buying my first investment in my own name?

I know the best answer is "talk to a local CPA who is familiar with real estate investing", but want to get the BP insights. Also, anyone know a great CPA familiar with real estate investing in the Santa Monica or Los Angeles area? 

Cheers!

Hello BP faithful,

I'm excited to introduce myself and go full throttle from here with everyone! My name is James Calabrese, and I relocated to Santa Monica, CA 1.5 years ago from Washington, DC. I tossed everything in my car and sprinted cross country to work on a tech startup in the real estate industry and I've been hooked on real estate ever since. 

Beyond my work, I cut my teeth with my first primary residence purchase in Dec of 2014, and now it's time to get a few more under my belt. In preparation I've been blasting the bigger pockets podcast constantly for a few months, reading the books you all evangelize, and am studying to become an Agent by the end of the year. 

I'm most excited to start meeting other investors in my area to learn a little bit about my market, get some guidance as I start, and see how I can help others with my skills and time. I've got a laundry list of questions ready (which I'll start tossing out on the forums?), and I few ideas I've been cooking up I think are pretty slick. 

So drop me a line if you'd like to chat. I'm pumped for the days/months/years ahead and wish you all the best. 

Cheers, James