All Forum Posts by: Kristi Wolfe

I'm a newbie in the "learning and assembling me team" stage, and I found a lender who had a loan that was structured for BRRRR deals. Back in early March (pre Covid), details were:

Minimum downpayment: 10% of the total of purchase price + rehab budget

HML interest only-rate for an unseasoned investor: 11.5%

conversion to 30-year fixed rate: 6.75% (or could buy down the rate), and I can pull out a maximum of 80% of the ARV.

BUT NOW.....as of today, the new terms are:

Minimum downpayment: **25%**** of the total of purchase price + rehab budget!!!!!!

HML interest only-rate for an unseasoned investor: 12% (only a 1/2 percent increase - understandable)

conversion to 30-year fixed rate: 7-8%, (varies, based on debt service ratio) and I can pull out a maximum of 75% of the ARV.

In March, it looked fabulous. Now it looks totally unappealing. I haven't been following the market since the spring - is this how it looks everywhere these days, or do I need to start from scratch and try to find a new lender at this point? I can come up with a 25% downpayment, but it'll be hard (have to sell stocks to get it), but the worst part is the 8% APR on the fixed rate 30 year loan...that seems ridiculous to me!

@Pete Z. I had a long talk with my husband about this, and while Section 8 is guaranteed rent payments on time every month in an uncertain economy, we just cannot support a system in which 1 family is paying $1200 for a meager 2 bedroom in need of updates and busting their humps to scrape do it, and their neighbor is living in a renovated home and using taxpayer money to pay for it. I cannot stomach encouraging that system, so we’ve decided not to go section 8 for this property. If we had a lower end place that was fetching average or below average rent, maybe, but this system is not one I will contribute to.

@Pete Z. Unreal. Incentivizing living off of taxpayer money. Nice.

We’re looking for a new tenant. The place is upgraded (Completely renovated in 2016, hardwood floor, granite countertops, stainless steel appliances, etc. Avg rent for a 2 br 2 bath in our area is $1550. We’re asking $1700, and have prospective tenants who have section 8 vouchers for 2 br housing for $1700+. Does this bother anyone? Imo, Taxpayer dollars are paying for your housing, you should not be living in something that costs more than average.

Thanks everyone- my lended did say it was on a “reimbursement schedule” which I didn’t understand. Just spoke to him, and as you may know - it means I pay out of pocket for the rehab, and receive reimbursement....and there’s my explanation- I only have to pay for 1 draw IF I can fund the construction with my own capital.

I'm a newbie, and trying to make sure I know every penny of the costs associated with my future BRRRR. My lender just told me that construction draws cost $200, and require an inspection- SOP, it seems, but he said I can draw as often as I like. So- what if I just pull it all out right away to minimize paying the fees? I'm sure there's a drawback to that- but what?

My husband, brother, and I are in the beginning stages of BRRRRing. Assembling our team, getting preapproved, running numbers on deals, etc. it all sounds so wonderful! Tell us your BRRRR fail story. I want to learn what pitfalls to avoid. Thanks in advance!

I’m looking to assemble my team in the Lake County IL area. Step 1: rockstar agent who knows the investor mindset. Target: SF or small MF properties in far NW Chicago suburbs. Are you that agent? Do you know that agent? Thanks in advance!

@Bjorn Ahlblad Darn! I was hoping could squeeze a few more dollars in cash flow out of this! Well- at least the new exterior pictures in advertising for the property might help find a tenant quickly!

Cha-ching! We have a rental property- a townhome. We rehabbed the interior, and we just got a letter from the HOA indicating that we're getting a new roof and siding- paid for in full by insurance! Work is being done in late spring, current tenant is moving out in July. Can we expect to get more in rent with these exterior improvements? (We're pretty new at this still)

Thanks!