All Forum Posts by: Lee Cruz

If any of you have been successful with your projects(hopefully you have). How many people that you knew personally became inspired to do what you are doing. Did anyone doubt you, or try to look out for your best interest by saying "its a big risk, you can drown in debt" etc. How many eyes have you opened by jumping into real estate investing?

On the flipside, was there anyone you know personally that inspired you? Did you have a friend/relative that was doing it and made you think of the possibilities? Thanks for reading

How quickly do you start looking to acquire your next property if you are using the BRRRR strategy? Do you wait until you have the property refinanced and go to the next? One by one? Im assuming you do this if your a newbie like myself.

But say you have 4 - 8 completed, do you already have a system in place? I ask because im going in with a partner. I have my own capitol and he has his own capitol. We were just gonna wait and see how the first 1 or 2 go, then hopefully develop a more sound system where during the rehab, hes already looking to make a deal. Would we be spreading ourselves too thin by trying to scale quickly? Thanks for reading.

Hello Bp

Looking around my area houses seem to go off the MLS listing pretty quick. Like a week. How many of you call your agent and make offers from just looking at the listing online? Do you make an offer "subject to inspection" etc? If i make a phone offer to my agent and put that clause in, can i retract my offer if i just dont like it? Even if there is nothing wrong with the inspection? Am i on the hook to purchase it if not?

Thank you for the thorough reply @Lee S.  You clarified most things in the back of my mind. So with your above examples. You got your money back and made a profit of 30k+ and 50k+? How quickly did you amass your portfolio? How many rentals do you got? If im being nosey, you dont have to answer im just trying to guage the possibilities.

Since im a stickler for details and making things simple

- search for distressed properties, so i have a valid reason to offer below market value

- try to get my seed money back with a bit of a profit

With distressed properties. Is there anything you wouldnt touch? Foundation? Smell? etc? Also for the BPO is that a paid inspection before i make my first offer? Thanks again

Thank you for the quick reply @Lee S.

*headslap* I totally forgot about ARV x .75 minus rehab costs. $185,000 x .75 = 138,750 - $8000(rehab) = 130k. Is this right?

How often do you get sellers to bite when you offer them 40k less from their purchase price? I mean wouldnt i have to lowball them EVEN LOWER just to get it at 40k less if we are trying to haggle? its not a total dump either, it looks decent for the most part. Should i be looking at more distressed properties instead of decent/ok properties? The big rehab costs of 50k+ intimidate me for my first rental. I kind of wanted to start slow with a minimal rehab just to kind of learn the whole process. Again thank you for clarifying my numbers. Ill rememer to apply the ARV X .75 rule from the start.

Hello all

im a bit stuck on the BRRRR strategy especially the refinance part when im trying to apply my numbers. Ill try to spell everything out as much as i can.

Purchase Price: $173,500 

Down payment 20% - $34,700

ARV: $185,000 (conservative)

Repairs: $80000

Closing Costs: $3000

Total: $45,700

Income: $1957

Expenses: $1529

monthly cashflow: $427

cash on cash roi: 12.39%

So at this point i would contact a hard money lender and get a loan of $185,000? Possibly at 10-12%? Refinance with a credit union a year later with the ARV of $185,000? 70% of that would be $129,500.

This is where im stuck. At this point what is the full figure i pay back the lender? How do i get my money back out to put into another rental? Are these numbers correct? How do i efficiently use that $129,500? Sorry i know im all over the place. Is there any PRO members here that i can send my calculations to go over? Thanks for reading my post.

Thanks for the reply @Patti Robertson

My rents would be $1950 total. So during the repair phase, you recommend a hard money loan for 3 months? Then refinance after that? I thought banks want a seasoning period of 12 months? 

I have a small contracting business which is Ltd. The business has the cashflow, i personally do not. I was thinking of purchasing rentals(duplexes) under my business. Is this a good idea? The big banks want 35% down instead of 20%. Big deal for me. Also refinancing is 65% for my business. What would you do?

I was looking at a duplex for $170,000. I have $80,000 to put in. I wanted to use the BRRRR strategy. Use a hard money lender, and refinance after a year. Hopefully do two next year.

The two parts where im stuck is:

1. Should i buy rental properties under my business? Is this now commercial lending? Should i transfer business profits to my personal account?

2. The hard money rental phase. 1st month to 12th month before refinance. Its like negative $300 every month. Do i take a hit, before the refinance? Should i leave all the equity in there and forget the refinance? Ive been trying to figure this out on my own, but i cant find similar posts about my particular situation. 

Any suggestions appreciated. Thanks bp!

Thanks for the reply @Jaysen Medhurst

I dunno! lol im still learning! I wanted to use my business because it has the cashflow to buy the rental properties. Possibly every year. On my personal side, i dont have the personal cashflow to purchase a rental year after year. I just wanted to get started.

I was under the impression duplexes are better than single family homes when it comes to cash flow no? What do you suggest? Im all ears!

I just finished talking to the bank. I was planning to use my business to purchase rental properties. I initially thought it would be 20%, but its 35% for businesses. Also its 65% to refinance after 6 months. I was looking at a $170,000 duplex. 35% = $51000 plus $10-20k for closing costs, rehab. So ill be into it for about $70,000. Is the BRRRR strategy still useful? How would you guys go about this situation?