All Forum Posts by: Sean Macneir

All solid-solid points. #5 hits the most for me, as I've had and have many clients that either exit as a refi or a sale, but don't consider the future value/costs based on that true future value or completion timelines. Based on Micro and Macro local market and economics the ARV can be subject to many changes come time to get the appraisal for exit and many investors slip when it comes to margin to make the refi make sense. Carrying costs in purchase and or rehab is financed, cost of capital on refi, re-recording, title, updated insurance, etc. their are many costs at play after initial funding then to transition long term unless your straight cash on the front end. The. It's just refi capital. A lot of investors think they can pull cash out no matter the payoff the have in place and the generally 75% LTARV often saddens many. Having a good game plan as an investor is key, making wise purchases, accurate budgets, holding subs accountable and to also know, yes, this may be the current ARV at purchase, but how is this market trending and what's our timeline. Did we factor in for these adjustments and what will come of cost should we transition to a hold strategy at (x) less $s or (x) more $. All I can say is I've seen it time and time again, accuracy in your estimates, detail in your work, and anticipating future costs/market changes and building contingencies in your budgets may cost you some deals but will save your investments.

You sounds like a solid man Ricardo. It looks like you've made up your mind and my only thing to note is that the STR income is probably much greater than your LTR. FEMA Should help with the living expenses of your tenants if their employment was directly affected by a local disaster. As for the STR If you want to you can one month it to a local displaced family that may need it and label it listed for "transitioning" and hold onto your November booking if you want to possibly keep the income. If aren't by able to find a suitable means before month 1 ends and your booking cancelation timeline then maybe you let them stay, but seeking someone who understands that offer or it perfectly fits could be a win win for you and them. This would potentially allow you to still help, still capitalize and still stick to your investment goals and you consider your 4th rental.

Local FB investor group potentially.

Nope most lenders won’t care. As long as the property is claimed as self-managed you should be good. If the one lender won’t, the next one will just wake sure there is no deferred maintenance.

@Don Konipol yeah I've seen the misconception too. Mistaking gap lenders for HMLs. We don't fill the gap haha we create the "gap" aka normal money to close. The money people put down is equity, and it has protections in it for both the borrower and the lender but people really want to get in at no cost recently with FICO that could use some help. Anyways, even if a gap lender comes in, if it's even an allowable second position (A lot of lenders won't do that and Silent 2nds are a No-No) they add so much additional risk to the deal, potential legal ramifications and all around generally dangerous feet's. I've heard of their full recourse scenarios consisting of personal assets and even garnishing wages(I suppose it's contract dependent and how sharky they'd guys get). I haven't dealt with one on any of my deals while in my time lending but on the residential side gap funding comes up on a weekly basis. Even if the EMD is covered people use these loans, should consider what other costs there are and potential ramification. We just had a 100+ portfolio fall apart because of silent seconds upon refi to achieve a bail out. Depending on the endeavor, your still have potential origination, closing cost, reserves of different size(deal type dependent) and other applicable fees/costs. If that lender wasn't able to provide you with the necessary funds and isn't willing to add in a gap to the gap I just picture disaster.

@Stuart Udis hahaha 

I’m no attorney but this looks sound. Holding company over separate entities is what I see common with the investors I work with. LCC as a basic pass through and limited partnerships depending on equity arrangements and profit share of the parties add that extra level of flexibility and not needing to split potential individual partner costs or liabilities.  

(Proceeds to raise hand) Orlundo I got you. We operate nationally and I work with my clients in DWF out to Tyler and a bit in Houston. I’d be happy to have a conversation.

Do it frank! Get something that's short term rental viable. That way it can cover any mortgage, monetize and when you want to come down just remove the listing dates and enjoy. Short terms provide get ROI numbers and have that benefit that a simple vacation home doesn't. Depends if that's what you'd like but I've seen clients pulling in 3-10x depending on the STR build out. Remember if you do… The STRs that win are the ones unlike any in the local market and also give the extra bit more of appeal and experience. Might find a good deal after this storm too!

Keep that concrete finish on the large foundation! I love seeing crispy concrete with a slightly darker  exterior color. On the siding maybe do something like a desert tan with some red hue that’s a light warm and inviting design. Look up brick and large concrete foundation homes. They pop with the color contrast. Kitchen sounds solid and love white on black. Especially if it has eastern facing windows for great morning light. And make sure the floors have a nice contrast such as the middle ground flooring you touched on. That will make the whites of the exterior come together and white makes for a spacious appeal. Solid choices already, just my take.