All Forum Posts by: Mario Casarez

Originally posted by @Andrew Postell:

@Mario Casarez sorry I am just now seeing this post but you mentioned something that is really important in your initial post - you want to use the HELOC for the down payment? Or a private lender for the down payment? Can we talk about this for a moment?

• Is this a property you are buying to "hold" (like with the BRRRR method) or is this a flip?
• Ideally, what is the ARV (or target price point) of your property?
• What is the percentage of the ARV that your HML is willing to lend you?

If you don't mind answering those questions I think we could provide some more concrete advice on this.

Hello there,

I wanted to use a Private Money lender for a down payment while I wait for my HELOC to go through the approval process (they told me about 45 days).

The property in question would be either for BRRRR or Fix and Flip. I still need help determining how to decide which method to go with. I have seen on Thach Nguyen's (BRRRR specialist) instagram page that he talks about having a 30%+ margin for a BRRRR. Flip would be a margin between 20-25% and wholesale would be 15% or less.

How do you calculate margin?

Anyways, I decided to just wait for my HELOC to get started. I don't want to be relying on Private Money Lenders to lend me money when I can just wait for my HELOC, but to answer your questions:

The property in question is priced at 600k. After walking through the property, i determined that the property is not worth 600k as is. I am guessing the most i could offer is 395K. I estimate the property is in need of a complete gut rehab. I also estimated about 130K for the price. The ARV is at least $750k. The HML will loan me 80% of the purchase price and fund 100% of the rehab.

I'm new and have never done a deal, so any guidance is appreciated.

Thank you,

Mario

Originally posted by @Morgan McRae:

	1500 or less SF	1500 - 2500 SF	2500 - 3500 SF	3500 - 5000 SF	5000 or more SF
Light (Carpet, Paint)	$10,000	$15,000	$25,000	$30,000	$40,000
Average (Carpet, Paint, Kitchen, Baths)	$25,000	$35,000	$45,000	$55,000	$70,000
Heavy (Gut Job, Everything Brand New)	$50,000	$75,000	$90,000	$100,000	$120,000

so a complete gut job on a 1644 sq ft home located in Southern California would only be around 75k??  This seems kinda low.  Would this include new roof, new electrical and new plumbing?

@Roger Devore

Yes. Hard money lender offers 80% of purchase with 20% down if I'm only needing purchase funds. If I want to also fund rehab, they can offer 85%/15% down with 100% funding of rehab.

I will have reserves of my own plus whatever I have in my HELOC, which is gonna be about 140k.

Basically, use HML for purchase and rehab. Then the plan is to rent, refinance and repeat.

BRRRR!

@Michael Ablan this would be a loan just until I get my HELOC money. And it would just be a one time deal. For example, if I ask my dad or a relative or friend for this one-time loan, I'd want to offer them something in return for their help.

Originally posted by@Kerry Baird:

I pay 6% interest-only and would make the note longer than you think, such as for 2 years.

How exactly would that look like? Say you loan me 65K. How much would i pay you once I get my HELOC in 45 days?

If you look at my previous posts, you'll see that I'm new to all this and i'm ready (or not) to look at my first property. I plan on using my HELOC to fund the 15-20% down payment required when using a Hard Money Lender (HML), the thing is I just discovered that it takes about 45 days for the HELOC to get processed.

So here's my question.  Suppose I use friends/family money (Private Money Lender) to loan me 45-65K with the condition that I will pay them from the HELOC once I get it, how much interest is considered reasonable to pay them if I pay them back in 30-45 days?  

Been doing lots of reading and almost ready to begin my BRRRR journey, but I came across the Homestyle Renovation loan option while reading up on Hard Money Lenders.  As a complete newb, would the HomeStyle Renovation be a recommended path to take considering I would only need 3% down and low interest rates?  As stated, I'm new and have never completed a real estate investment purchase.  I'm a high school teacher who would like to use BRRRR to help me reach financial freedom.  I prefer to work with an agent as I learn the process of BRRRR, so from what I've read on the Homestyle Renovation loan, it looks like a nice option for completely new investors like myself?  Is working with an agent also advisable. 

Also, please don't message me privately unless you leave a comment below first.  I am new to Bigger Pockets and I tend to thing people who message me privately are scammers.

I'm currently reading books to get in the real estate investment world and as a socal resident, I'm hoping I could start buying single family residences to get started, but it appears laws in California are in favor of the tenants, specifically when it comes to evictions for non-paying tenants.

How have you California landlords dealt with non-paying tenants this past year?

Newsom came up with a solution to pay the rent of all unpaid rents. Does that give you a sigh of relief?

As a complete newbie, I wouldn't even know what to think if I was in a situation where I got my first investment and my tenants stopped paying and I couldn't evict.

How do you go about asking tenants to leave once you've purchased a property with renters living there?  I was reading through a post where a user said:

Originally posted by @Luan Oliveira:

@Abraham B. Are you looking at small multis or 5+ units?

I've purchased three 3-fam properties in the last three years all off the MLS ...

...Don't always rely on the existing rents either. You have to be ready to ask the tenants to leave, then spruce up the units to get top rents (fresh paint and floors will make a world of difference). Alternatively, be ready to raise rents on existing tenants.

So my question is, how do you go about asking tenants to leave once you purchase a property with tenants already living there in order to spruce up the place to be able to ask for higher rent?  Has anyone been able to do that successfully without paying them to leave?  If so, how?

So I'm sure most of us have an instagram (or FB) account and have come across coaches like Thach Nguyen and Jake Leicht showing how they used real estate methods (flipping, brrrrr, etc) to make loads of money and promising to show you all their tricks if you just pay them $5000+ for their content. 

I have listened in on their free consultations just to get an idea of what they offer and what I discovered is that they teach the same things found in books you can find on Amazon written by Brandon Turner or J Scott.  Books we can get for under $20 each.  HOWEVER, what they do offer that can't be found within the books, is a network of like-minded people all in one place.  Although a book can't offer that live-networking aspect, i feel Bigger Pockets offers that.

So my question is, what is the sentiment around here on paying $5K+ to avoid having to search for all your networking needs.  Would the $5k+ be considered an investment on yourself?  Or is that considered a waste of money when you can have it all for less (or free?) here on Bigger Pockets?  Is this a case of "you get what you pay for?" or are those just "get rich quick money scams"?

Thank you,

Mario