All Forum Posts by: Kateva R.

Would love some wisdom on theft liability when remodeling and working with a contractor. We're under contract on a duplex and will be undergoing a 2-3 month remodel (all cosmetic/equipment repairs). We've been advised by our insurance agent that theft isn't covered on the builders risk policy, and every policy excludes theft during remodel or construction phase since it is too common and easy for fraud. Our contractor would like us to sign an agreement that in the event of theft, we will be responsible and cover his losses up to x amount. His concern is an active robbery while he/the team is working (not break ins overnight). Is an agreement like this normal? Thank you!

Thanks @Dustin Morris for the feedback! We want to build up to $10k monthly cash flow within the next five years. Our thinking is get our feet wet with single-family, and graduate to multi-family. Good point about being able to find enough deals to make it work and the capital requirements to do so. I think we need to keep our eye out for deals that will have higher cash-flow after the refi, so we can re-use the same cash. Or we could borrow a much larger sum and go straight to large multi-family that will cash flow much higher, however much larger risk given our rookie status. The 2% interest over 5 years expires in Dec, then the terms go back to 3% at 1-year increments.

My fiance and I have access to preferred lending terms and can take out a personal loan for a 5-year term at a 2% interest rate. We only pay interest during the term of the loan, and at the end of the term the loan is due in full. We also have 60k to invest in cash, and have a very aggressive 5-year goal to cash-flow 10k per month (we can do it!!!)

My question is - how do we best use this loan access without too much risk? Below is an example deal we are looking at for our first deal/loan:

Purchase Price: $140k (loan at 2%)

Rehab:45k (cash)

Total budget: $140k + $45k= $185k

ARV:$205k

Rent: $1550/mo

Costs used in analysis: 8% vacancy, 3% maintenance, 10% CapEx

After we rehab, do we do a cash-out refi at 4.5% interest, which would cash-flow $200/mo, and repeat a la BRRRR? Or, keep the money in the deal and cash flow $790+ a month (since we only pay interest on the personal loan), and repeat with a second personal loan?

Thank you in advance! This is my first post and super happy to be a part of the BP community :)