All Forum Posts by: Mike Dodd

Hey there everyone. I'm getting ready for my buy my first rental, that's if I can find a way to do it where the numbers make sense. 

I currently work as a general contractor in Houston, TX. One of my best and long time customers is a lady who is in a tight spot. She was taken advantage of after suffering home damage during Hurricane Harvey (2017) and lost almost all of her savings. That's when I met her. I came in and finished putting her house back together and she's continued calling for little odd jobs here and there over the years. She's also a nurse and was making good income, except she was forced to stay home toward the beginning of 2020 because of her age, therefore she's eaten through the rest of her savings. She's been in contact wanting me to fix some things with the house so she can sell it, however she's had to put all the fixes on hold because she has no money. Her goal is to fix up the house, sell it and retire near her son in Arkansas. 

Her home is estimated to be around $240k and she owes $37k.

I'm estimating repairs to be around $10k and I currently have $50k available

I am trying to think of a way that makes sense for me to purchase the house and take care of the repairs so she doesn't have to worry about coming up with any other money, while at the same time not tying up all my money for a long period of time. I was thinking about looking into owner financing, however I'm not sure if thats an option since she still owes on the house. If owner financing is not an option, I'm trying to figure out other possible options to finance the purchase of the house. 

Thank you for any advice you can give,

Mike

I'm wanting to buy my first rental property this year. I'm about a month out from finishing renovations on my personal residence. My plan was to in a way to do a BRRRR except that I would continue to live in the property. I bought the house over 2 years ago for $142,000 and currently owe about $124,000. When I'm done renovating I believe the ARV to be around $180-190,000. My plan was to do a cash out refinance, then get a hard money loan and buy my first rental to BRRR.

My question is would it be better to do a cash out refinance or to take out a Home equity line of credit to put towards the rental?