All Forum Posts by: Korie Apgar

@Mark Gallagher

Would you please PM me contractor info?  It's hard to come by dependable contractors these days.  

@Eric DeVito

Also, is your loan adjustable? Difference between a hel and HELOC. An adjustable interest rate is just one more reason to pay it down. Any profit from your rental could quickly be eaten by a rising heloc interest rate.

@Eric DeVito

Pay down your heloc.  That's your funding source.  It's also against your primary home.   Remember, you'll need $ for unexpected biggies!!!  Have some money available at all times.  

Be disciplined and don't spend your cash flow. Get the luxuries later in life vs now. You'll set yourself back and it'll take you longer to get where you want to be. I'm assuming this place will cash flow. I believe you mentioned it would but did you deduct from your gross operating income: vacancy (at least 5%), accounting, advertising, cleaning, insurance, lawn care/snow removal, legal, maintenance/repairs, management, cap expenses, taxes, utilities, c.o. fees, license? Taking this, your NOI, deduct your debt service (principal and interest). Now you are at your cash flow. The above expenses are not optional. Cap exp are real, very real!!!

As far as managing the property, you can't turn it over to a management company.  Only after you know how to manage your property will you ever be good at managing the manager, which you WILL have to do.  

I assume that when you hand in your offer it will be contingent upon the inspection, obtaining financing and that it can't exceed a certain percentage, AND that you have access to the current leases and rent roll.  A lease in place doesn't mean the tenants pay.  Get the rent roll.  You must do your due diligence or you will be on the outside looking in as far as being in the rental business.  I'm hoping the property is in a good location in the valley.  Have you calculated cap rate? Coc roi? Gross rent multiplier?  

PM me if you have any questions. 

Find another bank.  Keep it small and local, they can offer you more, are more flexible in terms.  Call and speak with someone in commercial lending dept, ask if they're portfolio lender.  I'm sure you just haven't found the good one yet.  Write all your questions down and start making phone calls.  Good luck!!

@Ramsey Blankenship

Appraisers do look at cap rate for the area as well as take a look at your leases.  When you're bringing in 700x5= $3500 month you could get more than 300000 appraised value.   Could be towards $350000.  But remember if you need to sell, no investor will pay that unless they are a full price paying investor, which wouldn't be an investor.  Helps for equity.  Keep your money snowballing!!! Oh, and your appraisal shouldn't be that much.  I wouldn't expect to pat more than $900, $1000 tops!!!!  Get quotes.  

Don't forget when you refinance you'll need to pay closing costs.  

@Ryan Keenan 

A small local bank that keeps their loans in-house are great for investors. Call a few and speak to their commercial lending dept.  these are banks that are typically located in a few counties in your area, for ex.  

an investor never wants to think this way but I'm going to say it.  If something should happen and you experience financial hardship, you have a person to go to and deal with at the bank.  Not a large bank where you're pushing buttons on the phone trying to get a human on the line and their headquarters are on the other side of the country. 

Small banks with in house loans are flexible and can offer investors a lot. My bank has no limits to the # of mortgages they'll give me. They look for a DTI ratio to be 1.3 but consider 1.25. They don't have different interest rates for their investment loans on a purchase and a refi. Typically a refi has a higher interest rate.

The relationship with your lender is priceless.  They might have a customer losing their home and give you a call to take it off their hands.  

@Cody Steck

Hello, paying 160000 would mean no refinance with cash out for you and Your goal is enough cash out for the next deal after paying off your first short term loan and accounting for repairs, closing, holding.   

240000 ARV x.70 =$168000 is what you could borrow @ 70%LTV. You said PP of 160000 and 25000 rehab. You're already up to 185000. This isn't including your closing costs and holding costs either. You wouldn't be able to refinance and all your money would be tied up in this property. Your first loan...if short term loan with high interest ie hard money lender...what's your exit strategy? Will the expenses be covered by renting it or dip into your pocket every month? If you sell then you're paying short term capital gains taxes. These are things to think about.

I hope this makes sense.   

@Seth Willis 

Example:90,000 ARV. Say bank lets you refinance and pull 80% LTV. (My bank does). You'd be at $72,000. Then subtract from that your closing costs, holding costs, repairs. You could cash out the difference between that number and your first loan amt. this is why it is crucial to pay low when doing BRRR method. don't forget you'll need closing costs for the next purchase. make sure the numbers all make sense. Will it run on its own when rented or cash flow in the negative? That's directly from your pocket every month. Lots to think about. Be conservative in all your numbers. Best wishes!

@Michael Rivera

Welcome!  I'm not too far from you.  If you ever want to reach out with questions feel free.  We have 2 multifamily properties.  2 in 2 years, working on 3rd.  Best of luck!!

@Steve 

@Steve S.   It depends on the lender as to seasoning requirements before they'll let you refinance.  My bank doesn't have a seasoning period and their commercial lending dept doesn't differentiate between a first purchase or refinance in regards to interest rate, it's the same.  Which is awesome!!  Not a higher refi rate. 

In regards to your BRRR scenario, if the ARV is $210,000, youd be able to pull out up to 80% which is $168,000 when you refinance. Subtract from that your repairs, closing costs, and holding costs, and whatever spread there is between $130,000 and this other number is your profit. Hope I didn't miss anything. Good luck!!