All Forum Posts by: Lynn Hill-Torres

 Hi Ned, the $655 is what the bank quoted as the quoted as the personal loan monthly repayment amount. As a personal loan, I only have three options for repayment, 60, 72 or 84 months. The 84 month loan (or 7 years) was a trigger 12% and $635/mon. 

I forgot to mention that. Does that make sense. After I refinance, the loan interest and repayment length should be better and I should have a lower monthly payment, right? 

Does the rest of this sound normal? 

Also, my mom is telling me that banks are shying away from refinancing rental properties and that I may have a hard time doing it. Has this been anyone's experience lately. She said it's because of the new federal laws about how many investment mortgages a bank can have on their books....or something like that.

Thoughts 

thank you @james wise 

Thank you so much for the advice! I'll check out the BWI meeting. I hadn't thought of that angle at all, so this is new. ...and kind of exciting. 

thanks Gabriel. Will check it out. Haven't met up with anyone yet. I think that needs to be our next step. We have my mother in my ear but I don't think she is the best source of information. Brandon Turner has been a wealth of good info. It's kind of like being on the Dave Ramsey  wagon, you have to be on the wagon too to understand the concept of it. BP is the same. 

Good Morning BP,

My husband and I are finally getting more than our toes into RE investing. We are looking to buy and hold.  We have a great team already. God has really been putting this on our hearts. My brother already rehabs for investors and my mom is a realtor and has an investment property, my brother is an electrician and my cousin a roofer. Ideally I'd like to supplement our contribution toward my daughters' education. We want to put them in private Christian school. In addition, my hope is to pay off our primary residence in the next 5 years or buy our next home cash...regardless, I want to be mortgage free so as to open a Christian Coffee Shop. My goal is 5 years.

My husband works on roofs as a solar installer and hopes to get off the roof and away from the long hours eventually. He says let's put this green energy money to some good use. We make a great team. I love him so much and if real estate is our path to financial freedom then amen. 

Good morning BP. 

My husband and I are new to investing and are making moves toward our first property in Baltimore Maryland. My brother does property management and rehabbing on the contractor end, my Mom has a rental in Belair-Edison, and they have been trying to get us to jump in for awhile. So as to not get as Brandon Turner says in his Investing Book, get all the knowledge and then burn out before you buy anything, we put in our first offer! 

It was turned down...

But we jumped. That was good. I learned I like HUD homes as there is already an appraisal done that mentions needed repairs. Since we are capable of doing nearly all the work ourselves except plumbing, we just needed to jumped.

As we search for another property, it started to dawn on me that we needed to be in two-unit homes because of costs. I need to make a certain amount of money. This is where knowing the numbers helped. But I am concerned about financing now and if what I am doing is normal:

We opted to get a personal loan which we asked & qualified for an unsecured 35k @ 10%. We are looking for a 20-25k rowhome with less than 10k in rehab. Note: I have my team, one brother is a carpenter/rehabber/pm who already does rehabbing for other investors  , another brother is an electrician, church friend is a plumber, mom's a realtor, dad a carpenter and my husband is fully capable to work with his hands, so labor costs are low. This range seems perfectly doable. But when the deal fell thru, and we started looking again, I was like Whoa, we need a two-unit just to pay the loan back. 

Here's my question, the plan is to BRRRR, but the loan payment is $655/mo. Thats before taxes and insurance and capX. That's almost the cost of one tenants rent. If we found a single home, the rent may run around $900-1100. A converted two-unit home, which are plentiful and capable in the Belair-Edison part of Baltimore, could give me around $1400/mo, (~700/800).

My personal loan seems less interest than hard money, but are these numbers sounding normal? If in 6mo to 1yr, we can refinance, does it sound right that we'd be only making like 50 bucks until then?

Here's what I'm looking at: 

$655 loan payback.

$200 in taxes, $2400 is normal

~$50 in landlord insurance 

$75 water (my mom's rental is about 200+ quarterly)

$180 for CapX.

That's $1160/mo and I haven't considered a PM. I think we assumed to use my brother to give business to him but after looking at these numbers, we need to collect ourselves which is probably good for experience purposes. 

This is why I've concluded we need a two-unit otherwise we wouldn't make any money until the refi. My brother also suggested renting rooms until the refi to max out on income. Would these numbers be about the same  the hard money or private lending route? I'm just seeing. Brandon Turner didn't mention personal loan as a way of financing, and I assumed private lending was through other means...like thru people and not banks. 

Are my numbers off? Does this sound normal using BRRRR? Has anyone had any issues refinancing with the new laws regarding financing rental properties? The bank I have with my primary isn't doing rental property loans at this time. Crazy.

Thoughts?