All Forum Posts by: Justin Williams

Quote from @John Warren:

@Justin Williams I don't think you can purchase the property without taking care of the back taxes. Any time you close, you will have to take care of those before you get title to the property for sure. I would also be a bit nervous about the 35-40k estimate for gut rehabbing the property. I think you might be underestimating how much this project will cost to be honest. Do you have the capital to do the reno? Do you have a solid GC? 

He’s willing to quit claim deed the property over to me so I can do Reno without purchasing up front because of back owed taxes. Hes okay with getting his 7k after the property is sold/refinanced.Yes I have a 50k budget for renovations and No on the solid GC. It’s a 1200sq.ft house plus Roof and electric is fine. 

Hello BP Fam!

I recently found a property with about 43k in back taxes. Let’s say i rehab this property without paying the taxes first, will the taxes get payed off on the backend after  refinancing it? Will I be able to get financing (Heloc/cash out refi/dscr loan) on property that owes 43k in property tax? I want to use the forced equity after it’s rehabbed to pay the taxes off so I can keep the property for a rental and cash flow. Arv is about 130k and property is in need of gut rehab estimated to 35-40k. No mortgage liens (only property tax) and the current owner doesn’t care for it and is willing to sell for 7k! Thanks for the help BP family. I don’t want sell this beautiful deal!

Property taxes owed: ~43k

Rehab: ~40k

ARV: ~130-135k

Rent:~1600-1850(and going up)

Quote from @Dalton King:

Hey Justin, I read your post and all the responses. I have another idea that might work for you. I am using a Debt Service Coverage Ratio loan (DSCR) to buy a multifamily property because I have no income. The loan is based on the properties ability to pay the debt of the home. As long as the NOI is at least 10%-50% more than the annual expenses. You can qualify for the loan. (and credit score).

This way you wouldn't need a partner. 

Hope this helps!

Wow, nice one! Tomorrow I will begin to search for DSCR lenders doing business in/near Chicago. Most likely I'll end up taking this route to refinance! Just a couple questions,, Did your DSCR lender speak about a minimum loan amount for a refinance? And will DSCR lenders lend if title is in my LLC or does title have to be in my name? Also, I want to wish you the best on your investment journey as well.

This information helped tremendously!

Quote from @Tchaka Owen:

Quote from @Justin Williams:

1. Congrats! This seems like an awesome opportunity.

2. Based on what you've written, rehab and tax payments will set you back $50k. This means you'll have tons of equity.

3. Look at a non-QM lender that will focus on the property (instead of you). Yes, your rate will be a little higher, but so what? 

4. Worst case scenario in which you can't get your money out immediately, it's highly likely that you'll have significant positive cashflow that will keep you going until you reach the point where your other stuff is ironed out.

Good luck!

Tchaka, thanks for the insight and I appreciate the love! Definitely will be looking into non-QM lenders to use for the refinance and yes I have tons of equity(65k). Enough equity that a cash-out ReFi will almost double my cash invested in the property.

Thanks again! 

Quote from @Scott E.:

You're not going to be able to get a conventional cash out refi loan or a HELOC if you have no income.

How do you have no income to show? Sounds like you have a great deal in front of you so I'd hate to see you give up 50% of the cash flow just because you have no income right now. Once you're employed it will be much easier to secure financing for this place.

I have no proof of income due to legal issues that I just overcame late Jan 2022. Yes, it's a great deal with a nice buffer for the unexpected. I chose to go straight towards real estate because I have reserves and I didn't want to wait two years before starting my real estate journey. So what do you think about this scenario.. Putting the property in a partners name who wouldn't have a problem getting a HELOC/Cash-out ReFi.Then, after we get financing we deed the property into our partnership entity and split cash flow 50%.

Quote from @Mark Gallagher:

You're going to have a tough time, but not impossible time, getting a loan once the property is fixed up. There are some lenders out there who will do it. Depending on what the current numbers look like, it might make more sense to sell this one off, build some cash reserves. Or find a partner who is able to get loans a little easier and come up with a partnership to get the financing when completed.

The current ARV is 115k and the gut rehab ~35k. My credit is fair (680-690) and plus cash reserves in my bank. I could carry out the gut rehab alone and still have ~17k-18k still available. I do have a couple partners in circulation who can get financing and wouldn’t mind partnering this deal with me. But considering the partnership route how should we take title? Would my partner take title then after rehab and financing is done we put title in our partnership? Or just straight into the partnership entity? 

Thanks Mark G. for a quick response

A friend of the family owns, free and clear, an abandoned SFH (1200sqft 4bed/1bath) in need of gut rehab. Currently 5 years behind on taxes (~10k in taxes owed). He wants to give me title to the property. How can I to tap into the equity after the property is fixed up and rented out if I have no proof of income? Can I use a HELOC/Cash-out ReFi to pull out my cash invested in the deal without proof of income? Should I put the property in my name for loan purposes then transfer it to my llc after I tap into equity? A few reasons I don't plan to fix and flip is I'd rather the 1)Passive income 2)Appreciation (The Obama library will be ~7-10 minutes away from the property) and 3) The property is free and clear

This is my first deal and I’m really trying to figure out the best route to take before I commit fully.

Thanks in advance BP family!