All Forum Posts by: Kyle McCorkel

@Ro B.

Multiple red flags:

ARV too low

You are out of state

You are a newbie

Rehab sounds too extensive (structural)

Rehab could be $70k so best case you break even, but more likely you will lose money

Maybe buy it from your family member and sell it to a local investor for a few thousand more.

Put it this way, there’s local, experienced investors who would probably pass on the deal.

@Ro B.

Are you under contract on the house yet?

Where is it? In the city? Or outskirts?

@Steven Hershey

PM me about the lender and wholesaler. Under $100k is not a problem.

@Brian Sinclair

I download public records for my area, and then I'm able to filter by property type/zoning.  It depends on the county what information is available.  Sometimes the info is not accurate but it's good enough.

Start by looking up *county name* property records and see what info is available online.

It can take some digging but once you find it it's like gold.  Not an easily obtained list which reduces competition.

@Jay Yoo

I live in a low priced market and I do BRRRR's full time.

BRRRR's are extremely difficult and complex to do even when you're local. I'll never tell anyone to never do anything, but I must stress an abundance of caution. There's 100's of things that can go wrong, which can be mitigated with experience and a good team, but for a newbie with no team, the chances of having a major issue are very high.

Some issues that could arise include:

- Buying too high because you overestimated ARV, because you don't know the market (or because you're relying on a "boots on the ground" "expert" who overinflates the numbers)

- Running out of rehab money because you underestimated rehab budget, and contractors don't care 

- The biggest/worst one: not being able to refi because you don't qualify, aren't local (local banks like to work with local residents) or getting a ridiculously low appraisal.  Now your money is tied up for months or longer.  Or worse, someone else's money is tied up, they want it back, and you have no way of getting it for them.

The coaching services will (probably) make all this sound easy and they'll make it seem like the numbers will all work. But I've seen a ton of people come into my local "low priced market" thinking "OMG real estate is so cheap! How can I go wrong?" and then they're selling the property at a loss 6-12 months later.

Maybe try doing it locally first before trying to go long distance? There's so much involved that you kind of need to do it to learn how to maneuver around all the obstacles.

Sorry to be a Debbie Downer, just trying to tell you like it is.

@Henry Lazerow

It would not bother me personally, but it absolutely, 100% would bother some people and lose you business.  I'm not saying it's right, but people are people, and some of them get offended.  Or worse, they'll be subconsciously influenced.

If you're already a top realtor I'm guessing you'll be fine.  Just be aware it will have a slight negative effect - perhaps it will be small enough that you won't even notice it.

@Shane Ward

Most (perhaps all?) conventional loans will only be given to individuals, not LLC's. My understanding is that some banks view LLC's as a risk for the very reason you mentioned - it offers protection to the borrower, which (supposedly) might make foreclosure more difficult.

It all depends on the lender and the loan product. Some loans/lenders require you to have an LLC. But conventional loans will offer better terms 99% of the time.

@Vinnie Gatti

Someone will lend on your investment property.  Yes, some banks won't lend, or they'll offer you terrible terms.  They will usually be bigger, more conservative banks that are better suited for cookie cutter owner occupied, primary residence, single family homes.

I've had to find a good cash out refi lender a few times.  BP is a great place to start, then start reaching out to other local investors.  Last year, I resigned to just cold calling/emailing about 30 different lenders until I found one that would suit my needs.

After typing this I see that you're in my area! If the property is in your personal name and not an LLC, I have a lender for you. Send me a PM and I'll hook you up.

Also, BP tip: for local questions (most questions) put some key words in your post.  I put terms like "Central PA", "Harrisburg, PA", etc.  Most BP veterans have keyword alerts setup, and you'll get tailored responses from locals.

Totally. Can't tell you how many deals I lose because newbie investors don't know how to properly analyze the deal.  They overpay, then complain/blame when they lose money on the deal.

Most of them burn out after one or two deals, but then they get replaced by the next wave of newbs.

I feel like the only thing that's going to break the cycle is if access to capital begins to dry up, but I see no sign of that coming anytime soon.  Lots of money floating around and it makes people get sloppy.

You found a portfolio lender who will not require a down payment? If so that's you're best option.  Option #2 because you have plenty of time to either sell or refinance before the rate starts adjusting.

Typically for owner occupied conventional is the way to go, but the terms you listed seem fantastic, almost unbelievable.