All Forum Posts by: Keith W.

Ok. She’s going to run my argument through underwriting. I’ll see what they say. 

My issue is that the property is still under construction and not a rental property. 

My insurance agent says because it's a commercial property not in my name, they need special permission to release information. It just seems like a whole lot of hassle to get a HELOC on a personal property that has nothing to do with the property in the LLC.

Thanks Kevin. This investment property in question is my first project and we haven't even filed taxes on it yet. There's nothing in my personal tax returns. According to what you're saying and what I believe, it is a commercial property and shouldn't be an issue. The reason why they even know about it is because the account for the LLC is held with them. I recently did a lower rate refinance on my primary and the other property wasn't even mentioned. Of course this was with a different bank. If they continue down this path, I'll just try a different bank.

If we can’t get passed this hurdle, I will go with another bank. 

To me it’s none of their business right? Did you end up providing the info? @Nicole Heasley

I have about $80K equity available in my primary residence. I also have an investment property that was purchased and held in an LLC.

The bank is requesting all kinds of documentation on the investment property including insurance docs, private loan docs, year-end statements, etc. ) 

I don't feel like this is necessary since the loan is against my primary residence and not the investment property. The investment property is not on my personal credit nor is it held in my personal name. 

Can anyone advise as to whether is normal procedure? 

A seasoned real estate investor mentioned this strategy he has used from time to time but didn't go into detail on how it works. Basically, he wholesaled a property from his homebuying LLC to his home development LLC. I'm trying to figure out the benefit of this and came up with a theory. I wanted to put it out there to see if it makes sense, doable, and legal. My overall objective is to purchase the property with a min $1000 out of pocket. Not including closing costs.

Let's say my homebuying LLC puts a property under contract to buy for $100K

I want to wholesale that contract to my home development LLC for $125K

My home development LLC approaches my HML for a loan of $100K as I know they will require a 20% downpayment which equals $25,000

In essence, that $25k is going to me so it's a wash and the seller will receive the $100,000 asking price. 

• Does this make sense?
• Would the closing attorney or lender take issue with me essentially selling to myself, therefore no real money exchange?
• Is it all legal?

Ok, that’s great to hear. I wasn’t as concerned about the 6 months ownership as I am about the 6 months in reserves. In your situation, working with the commercial loan, is this a requirement?

I've been researching the BRRR Strategy for about year now, in the meantime, I'm in the process of flipping a single family.

In all my research, a video I watched today was the first to mention that you will be required to have 6 months of mortgage payments as reserves in your bank account. The money has to be seasoned, in other words, recent large deposits are not allowed. 

Where I live, a typical 3 family could easily mortgage at $2500. So that’s $15,000 sitting in the bank. 

Can anyone confirm if this is the case? As a first time BRRR'er not knowing this before hand could be a huge obstacle and I've never heard of it before. If this is the case, then I think it should be more transparent.

View report

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

For this scenario, I'm looking to bring in 2 or 3 private money investors to cover the downpayment and closing costs for this property. 

I would be working with a lender to cover the balance of the purchase price and rehab costs. 

I will be paying 12% interest to both the private investors and the lender. 

The lender charges 2.5 points and require to pay interest only payments during the course of the rehab. 

In the section marked "Other Fees by Lender", I inputted $5K to account for the total amount of interest I should be paying the private investors over the course of 6 months. 

According to the calculator, the interest payment is just over $3K / month.

Does this plan seem feasible where at the end of the project and refinance, I walk away with no money in the deal and cash flowing property?