All Forum Posts by: Michael Ealy

Hello all,

I am a local investor and Realtor® in Dallas, with my first ever post!  With any luck there are some local owner financing experts that don't mind giving me some pro tips.

I have a new property that I could flip profitably, but am thinking it is a great candidate for owner financing. I purchased for under $100k, and it would probably fetch $130k-$140k on MLS. Based on this, I am thinking asking $150k from someone who potentially wouldn't qualify otherwise isn't unfair.

The main topics I am hoping to learn more about are:

• Rate (to charge buyer) - I am thinking 10% is fair, but want to hear other opinions
• Legal (to protect myself) - I am not a lender and want to make sure I am within guidelines of not acting like a lender
• Financing and Arbitrage (to leverage) - What type of agreement can I use to take a loan out on this property, and still owner finance to the end buyer
• Terms and Reselling the Note (tax benefit and reinvestment) - Amortizing based on a 30 year note with a balloon payment at year 3-5 or so sounds ideal (based on my initial basic modeling), but not sure that would make sense to a buyer.  Also am wondering if anyone has experience helping someone build credit in hopes to sell the note to another party.  I know some private lenders that would likely speculate on this sort of deal, but wanted to hear other input.

Looking forward to learning and networking!

All the best,

David

@Michael Ealy Congratulations ! Great story to read about your MF investment success. Just curious, did you have a good PROPERTY INSPECTOR prior to purchase?  Just wondering if that would have alleviated some of the later rehab burdens you ran into as well.  Nice job, thank you for sharing!

Good evening BP,

I'm taking notes on the basics of REI so that I can build a personal strategy book and this may help the newbies like myself. Here are my questions:

• What is needed to apply and to be approved for a HELOC?
• Can you use a HELOC on a seller finance deal?
• What does a hard money lender require?
• What are common terms and is a down payment needed for HML financing?
• What combinations of creative financing do you use and why?

Thanks!

Hi All!

I'm having some issues figuring out the best way to run my BRRRR deals. My goal is to run 5 a day which I've been doing but I can never paint a true picture with the numbers because I never know the rehab costs. I just received J scotts updated version on estimating rehab costs which I'm reading as fast as I can but still-- it seems hard to estimate costs with just pictures. I've been getting my practice deals from the MLS as well zillow/realtor.com. Any advice on best practices so I can start to run my deals without feeling like I'm missing something?

Hi, This is my first post so hopefully it is not the wrong place or out of place. I suspect this question has been asked many times and depends on specifics. In my current situation I don't think either method (flip or BRRRR) is a bad idea, which is why I am unsure what to do. As a first point please note that this is in the UK, just outside London, where the average price is about £300k and up for single family three bedroom houses.

The house I purchased is in a row of streets with terraced houses that are all constructed in the same way, some have sold for £300-350k, the average price is £250k however because many of the houses are in need of modernisation. They were built in 1910 and have high ceilings, brick and tile roof construction.

I purchased the property for £252k with 5% down, in the UK we have first time buyer mortgage with a 5% deposit option and tax exempt for under £500k purchase price. Due to this it made sense to me to not buy a flat (apartment) and wait for it to appreciate but rather buy a house and try capture some value out of the "first time buyer" opportunity. The mortgage is for £240k with £12k down. I planned initially to spend about £25-35k for the renovations. So total cost would be £287k. I underestimated how much things would cost and I will end up spending £45k, this includes £10k on new windows and doors which I didn't plan on spending right away but ended up needing doing due to the state of the windows. 

This is my main residence and i currently rent a low quality two bedroom flat for £895 per month. The mortgage costs £950 per month and the loans for the renovations costs £620 per month. They are over 7 years and the mortgage is a 2 year fixed for 35 years. I can afford the loans and mortgage as I have a decent day job, ideally I would not have the loans of course. 

What I wanted to do was the BRRRR strategy and refinance for hopefully £325k at 10%. This should enabled me to get back £52500. Obviously that depends on getting the after reno valuation of £325k. Then I could either try and cash flow that first property with the loans by renting out rooms at £600 per month, in total I could get 3x600 or £1800 per month (if the downstairs living room was "converted" to a third bedroom (something that is common around london) , then use the £52500 as a deposit on a second property, in the UK a second property requires 20% deposit and at £250k that would be £50k, plus I would need to save up renovation costs if I wanted to do that strategy again and it would be difficult to capture the same level of money out at 20% refinance or 80% LTV. The other benefit is that I get to live in the property and even for a year or two i could have two tenants at £1000-1200 that could assist with paying off the loans. The other option is to pay off half of the loans at £25k and then save up for a longer period for a second property deposit living with lodgers while doing so. 

Now the other option is to just sell it after renovating for £325k. That would be a profit of £28k excluding buying and selling costs. The downside is that I would be without a house and If that is my plan I might as well not leave my rental property, where I would have to add in the cost of the property until it sells. 

I lean towards the BRRR method because it seems the only way that I can save up £50k necessary for a deposit in order to build a portfolio of properties.

Thanks. 

Hi everyone, what's your thoughts/opinions concerning buying and selling on terms in the Columbus, Ohio area?  

Thanks for your time, 

Matt

Hi all hope everyone is doing great.

Your thoughts:

I’m a commercial realtor and General Contractor in Knoxville TN. I specialize in multi family. Over the past 6 yrs between importing materials and rehabs I’ve been involved in over 3,000 units value adds across the south east for others.

I want to start value adding my own deals but don’t have the funds for the size deals I want to go after. I do have the resources to value add though.

Should I find joint ventures, syndicate or just start small and work my way up to bigger deals.

Thanks all for your time.

Happy investing.