All Forum Posts by: Marcus Holloway

@Darius Ogloza thanks. I’ve heard about them. I thought it was a tax deferment tool. I’ll need to do more research.

Thanks, Chris! And you're right, it was just fun to do. Learned a lot and I got to do it with a childhood friend. I forgot to mention we're cash flowing just over $200 per month. Icing on the cake. High cap rates usually mean sketchy areas, but we're confident in our knowledge of the area.

I thought I'd share the final numbers of my first brrrr. 

My partner and I decided to rehab a home in the neighborhood we grew up in. The home, in Gary, IN, had been in disrepair since we were in HS (we graduated in the late 90's). Obviously, our goal is to create wealth, but this deal had the added bonus of both working with a childhood friend and adding value to the community we grew up in. 

We were fortunate to have a great relationship with, in my opinion, one of the best GC's in NW Indiana. He (the contractor) is also from the neighborhood and the father of a mutual friend ours. The project was basically a full gut and could have been overwhelming with the wrong contractors. 

The house was a 3 bed, 1 bath (1000sqft) typical for the area. We purchased the home using cash, personal loans and CCs. Since we purchased the home in an LLC; we utilized a commercial loan for the cash out refi once the rehab was done.

Here are the numbers: 

Purchase price: $5,000

Rehab costs: $55,000 (roughly)

ARV: Appraised for $70K

75% LTV: 52,500

closing costs/banks fees: $4000

Cash out: $48,500

Fortunately, we got great tenant almost immediately after the rehab was done. We stole a tenant from a bad landlord who lived up the street lol. She saw the rehab in process and asked our GC if it was for rent. She's a nurse and signed a lease that started about 2 weeks after the final touches were put on the house. 

We transformed a home that been an eye soar for the past decade into one of the better homes on the block. 

We're satisfied with the final numbers. 

What do you think, BP?

@Joe Splitrock As long as get any of the paid subscriptions through Avail, your tenants don’t pay the $2.75.

Plans start at $9.99. I have the 24.99 plan that covers up to 5 units, 3 day ACH and some of features. It works for my budget.

I’m not sponsoring Avail. Just giving info.

Hope this helps everyone.

 I'm still satisfied with Avail. I've added another property since the thread started and they've given me no reason to change. As previously stated, I just wish the ACH payments were faster to hit my account. Other than that, it's been working great. 

@Joe Roberts Sure, we’re using Centier Bank in NW Indiana.

Thanks to everyone who provided insight. Just to update, we were approved for the loan and an appraisal has been ordered. 75% of the appraised value. Micheal Gilman, you're correct, verifying both owners and our LLC was a bit of a headache.

Thanks again.

@John Farley we reported a loss in 2019 because our only major transaction was the acquisition of the property. Our expenses for the rehab costs have all been very well documented.

@Fred Shatzoff thanks for the response! He told me to expect a 15 yr ARM. Is this because of tighter lending during covid or something to do with my personal credit as a guarantor?

Additional note: Our LLC is just over a year old and this will be it's first attempt at financing.