All Forum Posts by: Nathaniel Birdsong

aacidental duplicate

Hey Curt, I sent you a message to discuss. 

Good afternoon! I have been visiting the site and researching for a while now and am just getting going with my investing. I recently bought 4 homes using a HELOC. 2 of the homes I am planning to flip (one will be ready for market next week) and two I am planning to hold.

The two flips will do well enough to pay off the HELOC so I get the rentals for free basically and leave a little bit left over. I'm pretty happy with the expected result so far.

The 2 rentals I am holding are the ones I need help with. One is fixed up and rented for $650 per month and is probably worth around $55k. The other is almost ready for rent, should rent at $550 per month, and is worth around $45k. I want to cash out the equity and use that for my next purchase instead of dipping into the HELOC again (or maybe to add to the HELOC so I can buy more). I am having trouble finding financing options since they are lower value properties. A lot of $75k loan limits and things like that.

Any advice on some good places to look? Did I go too low with these rentals to really apply the BRRRR method?

Thanks!

I guess I need to keep looking then. 

Yes, the origination fee is for the line of credit so if you got a 500k line you pay $5,000 up front to establish it.

I'm going to go through the list here on BP and talk to some of those lenders. Thanks for the feedback. 

500k line of credit. 1% origination fee to set up the line. Then 2 points when you draw for the loan. Up to 90% LTV or 70% ARV. Between 8.49% and 13% interest depending on how much you put down on each deal (Affecting the up front LTV).

I like having the line of credit so I can make offers quickly. Would like to hear better options if anyone has had experience with one.

TIA!

Has anyone dealt with Direct Lending Partner? Talked to them today about their program. They offer lines of credit so you can move quickly and have a less detailed process to get funds each deal. They do have some setup fees to open the line of credit but, once that is done, the origination fees and interest are good compared to other hard money sources I have seen. 

Any feedback on them?

I have worked in real estate for many years. Specific Performance is exceptionally rare. If you are buying a primary residence, are in a moving truck, have sold or otherwise vacated where you were... Then it can certainly happen. Otherwise, most contract or agreements already have penalties for breach laid out and they are almost always monetary. Without seeing the agreement in detail I would bet you have a good argument to sue for any costs you incurred in your due diligence but that will probably be the limit of it. Especially if you intended to buy as an investment instead of a primary residence. 

@Melvin List, thanks for the advice. I never considered looking it up on public record:

So on December 13th, 2012 the mortgage company recorded a demand for sale by public trustee (Trust Deed state I guess). Then on Jan 8th, 2013 the same company recorded a withdrawal of notice of election....

I was behind in 2012 on purpose because I was advised to pursue a program to reduce my monthly payments on the house using a government program. In order to qualify I needed to stop paying. Never got an official notice of foreclosure or anything like that though. Only the late notices. 

I sold the home in April of 2014 and have the HUD showing principle balance paid in full and the check I received for leftover equity (a little over $10k). The foreclosure was recorded on my credit in April 2014.

Thanks for the reply. That is along the lines of what I have heard. The 'foreclosure' was on a conventional loan so the 7 year rule seems to apply.

Anyone in my situation or something similar been able to do buy and holds without those traditional bank options available?

:edit obviously owner-financing is an option if the terms ad up.

Thanks @Greg Fitch, I will definitely start connecting more seriously with the local banks.