All Forum Posts by: Scott Hollister

Hello @Victor N. and @Dan Leyden,

I have worked with a local credit union in obtaining a HELOC above 80% LTV. So they might be able to take on more risk then your typical bank like TD.

Please email jgonzalez at finexcu.org at FINEX Credit Union (East Hartford CT) Im not sure if they will loan on a non-owner or above your house limit but it doesn't hurt to ask. 

Good thing you have an investor friendly banker in CT! (Who is also extremely helpful and knowledgable) @Bill Couture might have a product that works like a HELOC but it is for investors!

Also, if you're looking for a cash out refinance talk to @Kit Crowne! (website) These are great individuals that come to our local meet ups every month in Manchester CT! 

Hello @Ryan Kennedy,

Have you shopped around for other hard money lenders? 

*Be careful when you use the word safe in Real Estate:) Just like you I was a newbie this summer when I sat down with a VP in lending at RCN Captial. Before that I was just a BP podcast junkie.

• I had no prior flipping experience, only a house hack 3 years ago. (Just closed on 4th house last week, A-properties in great neighborhoods, purchase price 100k+) Just shows you that YOU CAN do it. Have confidence. 
• Present yourself by: Showing up early, being prepared with notes and quality questions, listen more speak less, interview them, ask how you can add value to their goals/mission, negotiate the terms after you shop around (Important to know what others are offering), firm handshake and eye contact. 
• Get an introduction! Find someone here on BP that has used that specific hard money lender before, an introduction doesn't just make you an applicant anymore. I have found this to be extremely useful in banking as well. 
• USE THE BP calculators! I cannot stress this enough. I handed it to the loan officer with all costs included in the income/expenses, pro forma cap rate, NOI, Cash on Cash return, financial projections, 50% cash rules, analysis over time, IT IS great stuff!

So here is the exact terms from RCN 5 months ago as a first time hard money loan. Remember, I had an introduction. Typically they like to see 4 deals under your belt. 

• 12 month term
• 12% interest with 1% each month
• 10% down, rehab costs covered as draws (My rehab was small at 6-7k)
• Points: Typically 3-4 depending on how many you have done. Gets cheaper and easier with more experience. 
• Not sure what the administration fee is for that you listed above? 

Just shop around, ask for Chris at RCN and see if he can offer you better terms.

(Disclaimer: I don't get paid or get anything in return for recommending them. I have used them once and had a great and fast experience) 

Good luck Ryan, you are at the best place for Real Estate investing! 

Hello @Sean Autry,

Congrats on the first rental property! 

I had the same issue/realization that it takes a long time to build a portfolio that way. 

So like you, I have realized that adding value and forcing appreciation go a long way in getting houses for "free". I have focused my business on the BRRRR strategy. (In my farm area with me doing the majority of the work, paying myself on the refinance)

If I were to do it from afar I would need boots on the ground. A team in place that I could trust to stay under the 75%-80% LTV during repairs. That way when you refinance you don't have to come out of pocket with money.

I think the other strategy that might be helpful is the partner deal. A bank loans 80%, partner 20%, you split profits (you manage) and pay the partner off from profits. (You are still working for the money, but you don't come out of pocket)

Important bullet points for your next investment property:

• Purchase a wise investment in an area that you know well enough. 
• Pick a creative strategy that works (Remember the possibilities are endless) 
• Use other peoples money, see here!

I stole one of my most recent goals from Grant Cardone after listening to his audio book (10x)

"I have no debt except that which is paid by others"

So choose wisely and remember you can do anything you put your mind to! 

Hello @Joshua Martin, 

I have two quotes in front of my desk that I look at from time to time that might help you answer this question. 

• Two Rules for Making Money
  • Rule #1 Never be Emotional 
  • Rule #2 The greatest opportunity for gain or loss come when other people forget rule #1

• True Wealth is turning $1 dollar into $2 dollars 

Before I can answer that question you must know my background. I have done a house hack, a BRRRR, and I am now working on a flip. So I have to make my decision based of the knowledge I currently have at hand. (Like you said, investor preference) 

I would buy 5 REO properties in my area at 100k each and leverage that money. I would partner with a hard money lender at 90% of purchase price and have them cover rehab costs. Once done, rent out the houses and have the tenants pay the interest to the hard money lender. Refinance out at 80% LTV and hopefully make some money.

$$$ Now you have 5 Cash flowing properties in 6 months and over 100k in the bank. $$$

• Is it high risk? Yes. (Better have some reserves) 
• Can a normal person or newbie handle 5 houses at once? Ehhhh better to start with 1-2
• Do you need connections? Absolutely
• Are people going to tell you it can't be done? YES, but screw them. If you're passionate enough and you want it bad. ANYTHING is POSSIBLE 

Keep building your cash reserves and then move it into large multis down the road! 

Hello @Zach Hoskins,

Can you put it together in the rental property calculator? 

In order to give you more feedback I need to know: 

• Taxes
• Vacancy rate for your area
• Property Management % (Even if you're are doing this yourself it is still good to add it in just in case you decide to scale up or you might not be able to do it some day)
• Capital Expenditures. Big purchases like roof, HVAC, etc. 
• Water/Sewer prices
• Factor in PMI?

At 140k the P&I is $625, are you planning on paying out of pocket for the renovation? 

With closing costs you are right at the value of the home, is there any other deals on the market where you can add value? And get a house cheaper?

For instance I would look for that same house around 90k, add 20k in repairs, 115k with closing costs. 115k/155k= .74% LTV. Do cash out refinance, no pmi, get all your money back out. (Rinse and repeat!)

Hello @Ryan Battista, 

There are some good ones in CT. 

RCN Capital is a nationwide lender and I have closed one loan with them this year, they move fast. 

Also, Sachem Captial is another good one. They focus in New England, not sure if they would go to NJ. It doesn't hurt to ask! 

Good luck! 

Welcome @Adam Yunker,

Its great to hear that you are investing in your future! Is your agent an investor herself? Has she worked with investors before? 

Questions for you: 

• Have you chosen a farm area yet? This is the town that you want to invest in. Have you looked at every house that comes onto the market? Have you run numbers on those properties? (BP has great calculators that look professional) 
• Do you have your financing in order? (When you find a deal you don't want to lose it because of financing) 
• Every house that you buy will most likely require work, even if it is painting the house over to get new tenants. Don't be afraid of TLC (Look for mostly cosmetic so you don't get over your head) These are great deals to value add and force appreciation. 
• Add to your list a wise investment. That is the ultimate goal, in my area if the numbers work and I can see myself living there then its a good deal, no magic. Focus on a great area with good school systems and job growth. 
• Have you gone to your local BP meet ups? 

Best of luck Adam!  

@Steve Sapowsky that is your best option. Force appreciation with the repairs so when you do refinance out you can stay under a certain LTV (Some local banks do 90% with no PMI) and avoid paying that PMI. Typically it is 80% LTV.

Hard money lender is the only lending that might do a deal that quick, unless you have family or friends with deep pockets. 

My advice: I like your guts in trying to get the deal under contract, good for you. You will be rewarded for your action but make sure its a wise action. (That is line up your financing first because you don't want to miss good deals)

Since you said you can get in under contract for 55k cash, and you now have it under contract? I would go to a hard money lender and give them first position on the loan. Use your friends money for the rehab and carrying costs while you finish it. 

Put a call into Chris Dorin at RCN Captial. They are a nationwide lender and they will get back to you within the day, they closed my last loan quick. 

@Steve Sapowsky Awesome. My first deal was two houses on the same lot. 

After repairs, will you be able to do a cash out refinance on the property to pay off that line of credit? Are the current terms favorable?