All Forum Posts by: Landon Thomas

Has anyone recently/ever received a LOC against improved lots? How did you pitch the opportunity to the lenders?

We have 9 improved lots that are part of an existing subdivision near Kenosha, WI. They were purchased with cash 2 years ago for $114,000 and are now valued at $540,000. All utilities are stubbed, roads and curbs in place. New construction values in the area still don't support completing the development, so we are waiting the market out to see about building in 1-2 years. Values in the area are going up, city has nearby mix-use project draw up, reasons to believe market might support in 1-2 years.

I've talked with only a 2 lenders that weren't interested in commercial LOCs structured this way. I have a list of more local/regional banks/CUs to call, but being new to commercial lending, I think my stumbling along and lack of knowledge is hurting my chances.

We would really like to leverage what we have there on other opportunities. Any thoughts? Should I be looking at this another way?

In Illinois, are Sub2 agreements required to reported to the lender? I have a property under contract with a distressed owner. I sourced it off MLS, listed by an agent I worked with before. I made the offer 2nd day on the market. To which it was accepted 2 days later. I made a cash offer and I am utilizing approx 50% of my own capital (real cash + Heloc) + 50% private money. I still need time to negotiate the private and I don't want to rush the private money (first time working with them). We had a 60 day closing for the seller to find a downsized rental for himself. He found his rental less than a week after the accepted offer. The seller is now requested a 30 day closing. I asked my attorney to make mention of Sub to offer to the seller to see if it was something that would interest them for quicker close. He said he would not because it would be reported to the lender and likely have the loan called. I don't think my attorney knows for sure what he is saying, but I wanted to share my novice story to see what else I might be missing. Thanks in advance.

@Nick Versetto

Gut it!

@Brian Barfoot

Nice work! Did you look into Heloc vs. Cash-out? If so, what made you go with cash out?

I ended up in an accidental slow flip as well. I wouldn't label it "epic slow" like yours, but if I didn't have a baby on the way, I could see how it would have turned into an ESRRRR**.

**(Epic Slow Rehab Rent Refinance Repeat... @Brandon Turner can I also mint new and ridiculous acronyms for strategies?)

I just signed closing papers last night for my cash out to cover private money rehab costs ONLY. I chose my minimum 60% LTV cash out for the concerns that @Jay Hinrichs pointed out and then will have ~40k to use out of a heloc.

Brian, maybe its a matter of cash flow/portfolio potential? That is, in your area, you can cover two rehabs/rentals with your 58k. Whereas in my farm in Chicago suburbs I would cover only one. Meaning the equity gain of your two rehabs more expeditiously brings your overall portfolio leverage to a comfortable/conservative position. Thoughts?

@Nick Versetto

Nice work! You say "latest". How many have you done using Brrrr? All in the far SW side?

@MAHESH RAMACHANDRAN

Hey Mahesh,

Maybe @Aaron Mikottis would be kind enough to share his research with you. He is closing on his first 203k project in Joliet, he did a lot of research on neighborhoods. 

In fact Aaron and I are meeting tomorrow (Wednesday) at Noon Whistle Brewery in Lombard at 6:30pm. Stop by if you would like. Same goes to you all- @Nathan Waters@David Dachtera@Account Closed PM me if anyone is interested.

@Wayne Brooks@Charlie Fitzgerald

Thank you both for the reply. It seemed as though it would be sufficient for immediate purposes, but having never done it or read about it I couldn't be sure. I submitted the POF today. We'll see how it goes!

I plan on using cash + LOC for purchase and rehab. I plan on holding my SFRs for a few years, before selling. What's your thoughts on what refi lending to look for? The homes in my area are going to qualify for commercial lending, should I be looking toward the commercial/portfolio route at first or just go personal to start?

Does anyone have experience using a cash-out refi, clear to close letter as a POF? Is that even possible? Or since it's not actually in my account yet, will it be found as NOT acceptable?

I made offers on 3 short sales in my area. One came through accepted by the seller. I made 'cash' offers and as anticipated the bank is looking for POF.

The issue, this all happened quicker than I had anticipated and the refi on my live-in/long term flip isn't going to close for maybe another week or two. The loan officer indicated that the underwriters have everything they need and we will have the clear to close 'shortly'. 

Do I wait it out to see how it all falls together? Or is there something more I can do that I'm maybe not thinking of?

I have learned and now know the obvious answer for next time... wait to have the funds ready before making the cash offers. 

@Larry Turowski Agreed! I've found myself avoiding it, the same way I avoid "deal". I started typing B4R, ha! I like Rehab-Refi, but a little clunky still.

How about Rehabefi?

Hey @Toan Pham,

Welcome to BP! I successfully manage commercial construction projects from a distance all of the time. Investing will clearly have its difference, but if you make the calls, qualify and compensate well, your local team will theoretically keep your best interest in mind. 

Best of luck on your next moves!

How are you planning to remotely source in your target areas?