All Forum Posts by: Matt Hurley

When you're qualifying for loans, they're not really looking for how much cash you have in the bank, they're looking at what your DTI (debt to income) ratio is. So using your available cash to purchase a new roof won't really effect what you get approved for with a loan. Buying a new roof with your HELOC will as it would then be considered debt.

That being said, a roof is arguably the most important repair to NOT delay on a house. Water ingress = many many other problems you'll have to fix down the road and more money you'll waste. If I was in your situation, I'd use my cash on a new roof (assuming you have all the cash for this and won't need to finance?) which will slightly increase the value on the house and potentially increase your HELOC as well. Then, use the HELOC to invest.

If you also need more help from the forum, it's best to post as many numbers as possible. Do you know how much your new roof will cost? How much cash you have? How much equity in the house you currently have for a HELOC? stuff like that gives us a more accurate picture to respond to :)

The HM loan for my first BRRRR was done with Patch of Land out in California (found them through BP too!). They loan up to a 75% LTV of the ARV, and required that I get a "rehab coordinator" since it was my first flip. I would recommend them!

I can’t speak to #2, but for #1 your best approach may be find a local partner. Best place I know to find them is via the “Metro Detroit Real Estate Investors Group” on Facebook. Lots of local investors there looking for international finders, and several people who’s business centers around exactly that. 

Vet the people, vet the business, not everyone is experienced. Make sure they actually have a company. Good luck! 

I can’t speak to the other questions, but they definitely could be taxable events but not in the way you may think. 

In my area, taxes for a home are unlocked for the first year of new ownership which brings them up to current market value, then locked after that first year. After which, they can only raise a specified percentage. Transferring via quit claim opens me up to unlocking my property taxes for another year. 

Best advice I could give, call your local tax assessor and ask them what happens when a property is QCD-ed. Only they are going to have those answers, as it’s a county by county law and could change if you go 10 miles to the east (so to speak)

The cool thing about private money is that it’s 100% up to you and the individual giving you money. Don’t think about “what’s common”, start thinking about what your private lender needs. Do they have a kid going to college in a year and they want tuition for the first couple years? Do they just want some extra mailbox money each month so they can go live in Hawaii? Are they looking to be an actual partner in your deal? Many approaches but it all comes down to the individual’s needs!

In my experience that's a hard combo to find. A construction loan/HM loan by definition has to be on an investment property, to most HM lenders a property is no longer considered an "investment property" if it's owner occupied. My first property is an owner occupied BRRRR that I bought with a HM loan, I can't occupy now but as soon as I refi in the next couple months I'll be able to occupy under a trad mortgage.

Private lenders is completely up to the lender, and your negotiating skills. So if this is the best solution for your situation then I'd head more down that path than hard money. 

Tenant laws vary greatly by state, where is the property located? 

If they’re being a pain about showings, your only option may be to have them move out first. If I was in your shoes, I’d send a notice to quit (whether or not my state required it) and make it clear that they need to be out by Aug 31. Worst case scenario, you eat a month in holding costs after they move out as a buffer between renting and sale. 

Closing with a hard money lender isn't too different than closing with a traditional mortgage, it's just done in a much shorter time than a trad mortgage. I bought my first property (a bank owned foreclosure) with hard money, closed in about 26 days. 80% of the asking price was put into escrow from my HM lender, I put in the remaining 20% + closing fees. All was then transferred to the bank on closing day. 

An auction however is a different story. If it's a sheriff's sale, then you need to have money orders there in hand in the exact amount of your offer in order to close on the property. It really depends on how your area organizes auctions. From what it sounds, your situation is more straight auction than a bank owned foreclosure so you may not be able to use HM in this case as there is never "cash on hand", you would need to schedule a closing date. 

@Antonio Malachi  is that a yearly fee or is it related to the amount of credit you received? 

This sounds like a spam ad. Time to approval? Amount they were able to provide? Stipulations? Positives & negatives? if you’re going to make a forum post about it, gotta leave more than a yelp review :)