All Forum Posts by: Naema N.

Hi Everyone, looking for some advice. I still consider myself a rookie, so looking for advice from you experienced investors.

We are using the BRRRR method in attempting to build up our portfolio. We have 2 properties that were refinance almost a year ago, both have ppp but the value on both have increased over the last year. We are ready to refi a third property and was considering a portfolio loan to get more out of the properties to use for a fourth property we are about to close on in a few weeks. My hesitation is the ppp, it's giving away money.

What do you guys think? Should I just refi the 3rd property into a single rental loan or do the portfolio loan with all 3 properties in an effort to get more money for other deals?

Any advice would be greatly appreciated.

Thanks

I don't visit BP as often as I should but I've gain a lot from going through these forums! We've officially completed our first BRRRR and I owe a lot to what I've learned from visiting these forums. I learned many lessons through this first one, so figured I shared for others to see it's worth working through the process and sticking with it. Here are the details about this deal...

Got property through Auction.com, entered into contract Nov 2019, for some reason the REO lender had not recorded the foreclosure deed prior to putting the property up for sale (lesson # 1, check recorder site before bidding on auction property, this could cause a delay). We were supposed to close Dec 2019, we are newbie investors but we were able to find a HML willing to do this deal without interior access to the property. We had pre-approvals and were ready to for a December or January close. After several months of being promised the deed was going to be registered only to find out it hadn't been, March rolls around and COVID happened, and the lender backed out. Now we had to go on a mad scramble to find another lending willing to do this for newbies without interior access. Luckily we found one through a podcast I was on, but by April we still hadn't closed so we were ready to give up. The issue was we had funds we knew we needed for closing that we couldn't use to get other properties b/c we didn't know when this closing would happen. We considered backing of the deal a few times but I knew this was a good deal so we stuck with it. Eventually July 1st 2020 we were able to close, we started rehabbing right away, the property didn't need a lot, we were able to get it done by mid September, it could have been faster had we been working with an experienced GC (lesson # 2, don't always go with the cheapest option, they're cheap for a reason). But we were able to get it done with some pushing and threats. Got the property listed for rent, it was pretty high rent for the area but the property was worth it, of course received tons of applications with many issues one way or another. Then we received an offer from an insurance company to place a tenant on a short term basis with a premium on the rent. And with COVID going on we would as at least be guaranteed premium rent for 6 months. All in all it was a worthwhile experience and journey. We officially closed on the refinance yesterday.

Deal Specifics:

Purchase price - $142,350 (initially won auction at $150K, but asked seller to reduce price due to delay and they agreed).

Rehab - Approximately $30K

All in (including purchase, interest on purchase and rehab costs, closing costs on purchase and refi, down payment, misc holding costs) approximately $190K 

ARV - $275K (per appraisal)

Refi loan $206,250

That's it's. What a ride...looking forward to more!

Another option is using the business credit to fund the rehab, once you have completed the project and refi pay them off. That's what we are doing.

@Jesse Kindra sorry for the late response, my property is located in Calumet City, which is pretty close to Hazel Crest. Basically all of the south suburbs have halted inspections, even move in inspections where landlords have tenants ready to move in. I have a friend with a property in the same town and she has a tenant ready to move in but the village won't do the move in inspection. 

As it relates to the market in the South Suburbs I am fairly new to the game but I do watch those areas for rentals and the rentals do seem to move pretty fast, especially if you have a decent property. Hope that helps. I've sent you a connection, feel free to inbox me with any other questions. Good luck with your rental!

@Frederick Holloway...actually I am a licensed realtor, but not really interested in assigning the property to someone else, besides not really sure if that would work or if it's even possible, we bought this property on auction.com. I've sent you a connection, would like to chat to share my numbers with you so see if you can help.

Anyone know of any HMLs that are still lending to newbie investors during this time? We went under contract on a property on 3/11 with a HML. Unfortunately just as the everything started to happen of course they backed out and changed many of their requirements. We've tried calling around and many of the HMLs that are still lending are now asking for experience. Starting to wonder if we should just walk away from this deal. The initial closing was supposed to happen 5/1, we have just received the request to extend the contract but worried we may not find the financing in time, considering not resigning the contract.

Where's the help for newbies during this time? How do you get pass being a newbie if the lenders aren't willing to give you a chance? Any advice?

@Kenneth Garrett

Were your properties in Cook County? I am under contract on a property in the South Suburbs of Chicago and was told week before last that the County has closed down completely and will not be doing any inspections in March or April, which means we can't close until after they re-open. Are you not running into these issues? 

Thanks

Naema

@Mark Beekman, I know it has been 5 years since this post but I would really like to know what happened? Did you end up closing on the property?

I am currently in the exact situation, I am coming up on the 3rd extension now. Trying to decide if I should move on or continue waiting.

I am considering purchasing a multifamily using an FHA loan putting 3.5% down, using whatever funds I have saved and making improvements to increase the value. I will be living in one unit and renting out the others. How difficult is it to move the property out of my name and into an LLC for asset protection, since of course the property will still have a mortgage? I'd like to hear how others have handled this situation?

Has anyone had any experience using New City Financial as a lender?