All Forum Posts by: Lee Cruz

Hi Bp

After months of researching im ready to dive in. I have the option to buy my own SFR to hopefully fix and refinance it or to partner up and get a couple multifamily deals. If i get the SFR id pull my equity out and roll into the next deal, but with a joint venture we'd likely leave our capital in as a rental property. What are the pros and cons of each? Thanks for reading.

I only have enough cash for a downpayment and rehab costs. About 50k total for the regular 100k to 150k properties around here.

Question 1:

Im still tryiing to understand the brrrr strategy. To refinance, arent i only allowed to take out what ive put in? If i put 50k in downpayment and rehab costs am i allowed to only take out 50k? OR If it appraises at 160k, ill leave in 25%=$40,000 and pull out 75% = $120,000 minus original loan and pull out my downpayment and rehab costs?

Question 2:

Do i need a private lender or HML if a credit union will help me bridge the purchase a conventional loan/refinance and bridge into a 25yr conventional loan. What im asking is do i need to purchase the house outright(i dont have the cash) or just a down payment plus rehab costs (50k total).

Im still looking for my first property. My mortgage broker says hes found a lender that would loan on 75% as long as i can put down 25% at 3% interest. Ill also put in my own rehab costs out of pocket. Once im done they'll appraise it and bridge it into a conventional loan back at 3%. Does this sound right? He says its better than a HML because im using the same credit union with lower interest.

example: from bp calculator

Acquisition:

Refinance:

Edit: i forgot to add, why would this property be selling so low? Without me actually looking at it, the appraisel value looks like it would be a 180k(if i was the one who rehabbed it). Another question i have is what scenarios are there for a beautiful newly rehabbed property to sell so low?

I ran across a listing that came pretty low for the typical B class area. Typical asking price for this area is usually 150k. This one came at 120k, but full rehab completed to floors, kitchen, island, washrooms, everything. The low asking price is attractive, but cosmetically i have nothing to improve it unless its a systems upgrade. Windows, maybe roof. How would you BRRRR this deal? What would you do with this type of scenario?

I ran across a listing going for 110k for a decent C class area. 800 sq/ft 2/1. Typical price would be around 150-160k. Looks like cosmetic was done, flooring, kitchen, washroom and appliances. But not system upgrades like furnace, roof, siding etc.

Have you guys ever purchased a cosmetic finished home, and only did mechanical/system upgrades for a higher ARV for a BRRRR strategy? I plan to do siding, furnace, hot water tank and electrical if needed. How much higher can it appraise if the appraiser comes in and sees a system upgrade only?

Do i have to disclose to my tenants that it was a former grow op?

I ran across a SFR in the mls that was price way under value. Then i noticed it was a former grow op. No wonder i thought. I was gonna move on, but it got me thinking. Is this something other investors would buy? It was a grow op in 1996. But the grow op stigma will always be disclosed from now on and would be difficult to sell. Is this something you wold have to disclose to your tenants as well?

@Andrew Acuna thanks for the response. Excuse my newbness, but what do you mean by systems in place?