All Forum Posts by: Nathaniel Larrea

Love reading these stories.  Congrats on your hard earned success

I'm doing hard due diligence on a property that would be my 5th deal (2 Flips + 2 rentals).  Before I commit to a contract I am exploring both options of a conventional refi loan on an existing property i own out right since I have good credit and work a full time job OR...going hard money refi on it.

Reason why I'm having a hard time deciding is due to timing.  The conventional loan obviously has better rates which I qualify for but by the time I close on this existing property going conventional, the new property will already be at auction and lost.  However if I go hard money, I can refi my existing property sooner, pull the cash in less than 30 days in time to cover the 25% for the 5th deal (the other 75% will be  a different PML).

That said, should I wait to get approved on the conventional and risk losing this other deal or go hard money, get the 5th deal and deal with the higher interest on the hard money?  If I do hard money, does it make sense to conventional refi it say after a year or 2 and pay the prepayment penalty for the hard money loan just to have a better rate or keep the hard money loan until I decide to sell the property?

Here are the numbers

4th deal: $150,000 ARV x 75%=$112,500 loan x 8.5% on a 7/1 ARM= $1800 gross rent - mortgage - rehab/maintenance-taxes/insurance =$100+/- Net/month

5th Deal: $135,000 purchase + $15,000 rehab=$150,000 total investment (25% from the 4th deal, 75% from PML)= $2400 gross rent - PML Loan - rehab/maintenance-taxes/insurance =$900+/- Net/month FOR FIRST YEAR. After 1st year we would BRRRR it and have even more cash flow since we would go conventional Refi at that point.

Yes I know the numbers don't look sexy on the 4th deal as far as cash flow but its the difference of adding to my portfolio and getting this 5th deal that could make us a lot of money down the loan due to its location.

@Kasan Kelley My suggestion is to start off on a small single family property you can afford with savings and maybe rehab on credit.  Its not ideal but if you're priority is to get your portfolio started and making good cash flow is not, then you'll get to where you want to get to sooner vs. trying to find someone to loan you the money.  My biggest advice is to ask yourself the question, how bad do you want it?  If how bad you want it requires you buying something really cheap ($30k or less) that needs a lot of rehab and so you have to live in it while you do the work yourself to create sweat equity.  Will take a lot more time but the feeling at the end is priceless, knowing you did it all on your own.  People will see this and respect you more for it, subsequently they will loan you the money on the next deal because you demonstrated enough character that you were willing to grind it out.  

Hey @John S Lewis.   My wife and I invest up in Northern Jersey but are looking to expand outside our area a little.  Unfortunately we won't be able to look at this deal you have but we should definitely keep in touch as things will open up for us a few months down the road.  We're also always welcoming new people who want to explore our area.

@Justin Fraser I read your forum with your story and its quite inspiring.  Looking to take that leap ourselves and your story helps push us in that direction.  

The aforementioned hard money lenders, are those in NJ?  If so what are their rates?  I have one company right now approving me for my next deal but they're at 11% with 3 points but interest payments the month after closing which is throwing me off.  Any advice or input would be greatly appreciated

Hello BPers,

I'm working on purchasing my 5th deal now and having trouble deciding on how to finance.

I've been approved for a PML to purchase a property for around $100k but only at 65% ARV which doesn't leave me enough to rehab ($162,500 - $100,000). At which point I would have to come out of pocket ($18k additional for $80k total renovation) to succeed in renovating the property to its full appraisal potential. The terms also stipulate interest payments of 11% right away and 3 points which can be added to loan. At a ARV of $250,000 I would have to be making payments of $1,489 every month which seems like a lot of cash flow to tie up even before the property is refinanced.

I also have the option to partner (silent) in with someone who is willing to invest up to $100k for 50% of the deal which will basically just buy me the property, but i'd still have to come out of pocket for the reno.

Not sure if either sound appealing and wondering if anyone has a recommendation which might be the better choice if any at all.

Many thanks

Hey guys.  Would have loved to meet you all but just seeing this event today.  Been listening to BP podcasts for over a year but finally started my profile.  My wife and I just started with two SF properties in Northern Jersey and would love to meet up with local investors to share ideas and advice.  Feel free to contact me at anytime. 

Hey Daniel.  I just saw this post after searching "Greenwood lake".  My wife an I just started investing in Hewitt.  Would love to meet with local investors

@Justin Eaton  A+ info.  Thanks for sharing

What was the result of the return line mold?  Replacing the subfloor or applying some type of coating subsequent to cleaning?

Agree with @Noel Challenger. They're out there but you need to be persistent. My wife and I just leased a small 1bdr Single family in Hewitt, NJ and waiting a few months before we can BRRR it. Currently cash flowing $850/month while we only invested $55,000.