All Forum Posts by: Jeremy Holcomb

I’m with @Frank Procopio I would rather have section 8 tenants so I don’t have to chase rent payments. Get your inspection list from the managing authority and complete it before accepting a section 8 tenant and when the inspector comes out it will be done. No issues that way and you get immediate approval. 

The best way to protect yourself is make them carry a 1 million dollar insurance policy with a million in aggregate. Essentially providing 2 million in coverage and have you named as additional insured. Also, have your lawyer provide you with hold harmless letter stating that you will not be held responsible for any injury or liability of any kind. 

Ok so this is what I am up against. I typically purchase properties that need major rehab. After purchase and rehab I am typically at 65% of ARV. I then usually take a cash out refi at max available. I then take that money and buy a few properties I can rehab over time for cash in order to have some free and clear. Currently have two projects underway. My current lender loans me a 100% of 65-70%LTV ARV. My problem is he only does smaller deals under 250K and doesn't usually have more than a few loans out at a time. I am looking to go into large acquisitions mode. Purchasing larger multi family properties using the same methods. What would you do in my situation? I've talked to a few lenders today that said they could do something with 10-20% down. Anyway to do with less down payment? Just by the time appraisals, inspections, closing costs, & prorated taxes we typically already have 10% or more into the deal. Thoughts? Also, I am a buy and hold type and most properties I buy are for section 8 or affordable housing contracts. I would also like to keep everything under My LLC.

If you register the deed it could trigger a due on sale clause within their mortgage. I would not do that unless you can finance it on your own right now. A good real estate attorney should be able to get a contract done to protect both of your interests. 

If you were to do this deal do it as a lease to own and pay the back taxes and any mortgage payments that are behind directly to eliminate any outstanding issues. Also, have them add you as an authorized person on the mortgage to speak with them or as a power of attorney over the home. I prefer the irrevocable power of attorney in this situation.

@Account Closed typically with mezzanine you can arrange no payments until project is complete and sometimes a private bridge loan lender will do the same. I always tell people that you can always find a lender whose ideas align with yours, it just takes a little more work to persevere. That’s what I would look for in your case is a lender who loves the tiny living movement and is willing to help support it. Have you approached any of the finance companies for tiny houses about your concept/development. The person who runs one of those companies would be my first call. If they won’t do it they may connect you with someone who will. 250K is quite a bit of skin in the game as they say. 

@Account Closed, so take your numbers to mezzanine financiers and also look into getting a bridge loan. Take the money you have and either use as a down payment for the land or funds to use as you develop the property. It all depends on what the lenders require to help you complete the deal. Once you complete one development successfully then use that to showcase to start building other developments. Also to calculate a GDV is figure out your costs and  add your conservative profits figure together to get a ball park figure of the total value of the development.

@Account Closed, You would probably need to look at either bridge loans or mezzanine financing. However, you will need to look at what your total cost of development will be. What is required by the state, city, & county for this type of development? If using municipal utilities what the cost to hookup and run all the lines will be. Are there impact fees associated with each buildout? Permitting fees required at each level. Fire department requirements for hydrants and what the cost is. Cost for roads and drainage within the development. This is just a few of the items required to look into to get your total cost of development. You may be best served by going to seek the advice of a developer or builders association in your area to find out what is required in your area.

Bank Statement or Letter of Credit from their bank.

Ask if he will owner finance and put contingencies in for completion dates with extensions available in case you run into issues.