All Forum Posts by: Lynne Jacob

Yes, @Michael Dunn, that's how you calculate profit. Of course, one of the #s, above, isn't FOR SURE. Your calculations of $115K of ARV are an educated guess, right? Once the property is completely rehabbed the lender/bank will need an appraised value, likely from their own appraisal (who will go low). You will then get whatever the lender allows; ie. 70% or 80% of the "appraised" value (which, ideally, will be the ARV you came up with or even higher).

Your TRUE profit will be when the house sells, but if you're keeping it for yourselves or to rent out then what ever's left over from what you financed it for after you repaid yourself for everything; ie. closing costs; purchase price; rehabbing costs, etc. is your initial profit.  Then, of course, as time passes you'll earn rent and pay expenses for the upkeep of your new property.

Hope this helps. You're spot on, except for believing (if you were) that your ARV # is what the Bank will rely on. How we wish. :-)

Have FUN with it!

Regarding @Jay Hinrichs' "banking in Canada is quite a bit different than here in the states.. much better frankly.." ... we Canadians like to think so. :-)

That said, for real estate investing, you have more options/possibilities than we do up here.

The Universal Law of Polarity at work again. :-)

Thanks for your insight, @Jay Hinrichs.  Given I'm Canadian, my viewpoint can be different, that's for sure.  It's good for @Jayne Overbeck, from @Bryenne Korte's area, to weigh in, as well.

Gosh, how I love BiggerPockets. :-)

It's my pleasure, Bryenne.

I'm in Canada, @Bryenne Korte, and up here I always find it's best to work with a mortgage broker. You don't pay them; the lending institution who they find to give you the loan pays them -- up here at any rate.

I don't know what an HAVOC is. It's not in Canadian terminology -- or not in the East, at any rate.

But working with a mortgage broker, because they're independent of any one institution, they will help get what's best for you.  You are likely to need an appraisal, even for the bank, so I'd think the broker would get your property appraised to find out what it's worth and then (up here) you could borrow to 80% of the value of the house.  A broker may advise you that for what you want to do it's best to do it in 1 new 1st mortgage.  I'd follow their recommendation, if it resonates with you.  The thing there is that you will pay interest on that whole "extra" amount (ie. $50,000+) , even if you're not using it for a while. That said, it could be a considerably lower interest rate so pays off in the long run.  

Even when you're talking to your mortgage broker, I'd be happy to talk to you, if you'd like.

HAVE FUN with it!

Love @Mike Dittman 's suggestion.  Not to say I dislike the others but I like the "move-forward" approach and to do it rather inexpensively.  I would imagine that ANY city would prefer to have a house like that demolished to polish up the area.  And @Richard Capers Jr 's suggestion of checking out whether or not a duplex is allowed and do-able is another good one.  Thanks, guys, for showing me options ... for the future.

Oh yes!!! Absolutely, @Bryenne Korte .  Do it NOW.  I don't know about the U.S. Banks but in Canada they're slower than molasses in the middle of January!!  Just get a Home Equity Line of Credit.  You don't have to pay any interest on it until you draw money and you only pay interest on what you draw.  So GET AS MUCH AS YOU CAN. :-)  It's a cheap way to go because

1.  You only pay on what you owe ... and only when you owe it;

2.  You can make extra payments any day of the week (I'm imagining it's the same way as in Canada);

3. You NEVER have to ask permission from a banker AGAIN for as long as you have credit on your HELOC. YOU are in control; you're in the driver's seat.

So ... to answer your question:  When?  Now.  Best done in advance? Absolutely!

I not only helped home-owners et HELOCs for 1/4-century from my career in the legal field, but

I had a HELOC on my house in the '80s and '90s and it was heaven to NEVER again have to ask permission from a bank ... to buy a snowmobile; to buy a boat; to pave our laneway; to put in a new septic system (though that one they would have acted on right away to protect their collateral);

I got a HELOC on another home in 2009 to make a sizeable investment in my business ... and it took forever (exaggeration; it look way too long with aggravation);

Many of my clients are held back in their businesses because Banks keep taking months -- literally months -- to make lending decisions one way or the other.

Yes, it's a topic about which I'm passionate! :-)  Hope this has been helpful.

You've got it, @Simcha Davidman .  Both.  And, of course, send the letter to the owner's residence, as well.  Also google the owner's name and address and property and shoe size and everything else :-) and see if you can find a phone #.  Then call it.

And have FUN with it.

As with EVERY business it takes time to find clients/customers.  Once the flow starts you just have to keep it moving.

Nice to meet you, @David Tracht and @Jered Sturm.  I'm getting my feet wet going south of the Border (I'm Canadian, in Montreal) and chose Metro Atlanta for a place to start. My plan is to stick to wholesaling until I get the hang of it and the area and then I'm looking to fix and hold with lease options or not.

Wish you both great success!

Hi, everyone. Welcome, @Stephen Needham.  I've been investing in real estate for a # of years, but just now learning other strategies than buy & hold and rent-to-own.

Learning wholesaling and it's FUN.  It's a game. I surprised at how much I love it.

I happen to also be working in the Metro Atlanta area as well; then branching out to Florida or Detroit area next.  One area at time is good for me, for the moment.

If I could ever be of any assistance to anyone, in any way, it would be my pleasure.

Great success to everyone!

I'd say it's all about what you ENJOY doing, John. Which part of your REI business do you ENJOY the most ... and which are you REALLY GOOD at. Usually we're really good at what gives us the most pleasure.

Stick to that.  Pay for the rest.  Life's meant to be fun. And your business is, too.  :-) mljinternational .com