All Forum Posts by: Nick Militello

Ryan

Thank you. Im set for this project but I will keep this conversation current for future deals.

Nick

 Erik

I was corrected earlier and I am securing a private loan and moving over to a standard bank loan once I refinance the rehabbed property.

Thank you

 Jack

I actually have explored using a cosigner. My sister was willing to assist with this aspect of the process as well. I spoke with my mortgage broker and after multiple conversations, I deemed it easiest to start with a private loan and refinance once the units are rented. If I manage my BRRRR properly I should be able to recoup all of my debt and pull enough cash out to create a 12 month reserve for this property. The numbers also look as if I could earn as much as $800 per month after expenses as well. All of this promising but dependant on my rehab management. It can very easily go over budget if I don't have clear plan. I'm cautiously optimistic.

 Beth and 

Thank you for your advice. In January 2017 I used a private loan from my Mother and I had done all of your suggested safety measures. It worked out just fine and this upcoming venture will be my third time using money borrowed from friends and family. I have secured a lawyer who will setup the contracts and record the mortgage when settlement comes. I asked the lawyer to help create a document that I can return  back to for future private investors in my future and reduce ongoing legal expenses. The legal fee for his work will be $1750 in the greater Philadelphia area. 

Getting the lenders was easier than I thought. I was literally talking through my development ideas with my RE Agent and she offered to be an investor. The second time she suggested participating, I engaged her more fully and she has become my primary investor with my most recent project. In truth, she wasn't my RE agent at first, I was the housekeeper that she hired to clean out rental units that belonged to her clients. She grew to like me and impressed I seemed to know what I was talking about. Now I just have to prove her right!

Andrew, Thank you for the offer and I will keep you in mind for the next project. I have two cash lenders that like the deals I have found and trust my business sense to fully finance my first BRRRR. This first project could potentially be a Home Run with my first time at bat. I am making sure I keep the whole process well documented to share with the community the steps I took. Having looked at other peoples first deals has inspired me and I hope to inspire others. Or at the very least educate them on my missteps.

I've moved past this deal. It was on the MLS as zoned residential but when I called the borough they informed me it was not zoned as such. So I moved on. It's a shame, I believe the renovation 1887 warehouse would have made amazing apartments.

View report

*This link comes directly from our calculators, based on information input by the member who posted.

The numbers are based on post rehab for evaluation purposes. Purchase target is $200K with a $150K rehab cost for two nearly identical buildings. THe inside is mostly gutted with a fair amount of building materials (windows, cabinets and some flooring) left behind. 

My 2020 returns were poor because of covid and lack of work. My 2019 and 2021 returns were both good, but my bank only cares about previous two years. I have a credit score that bounces between upper 700's and 802 as my highest and have owned my small business for 20 years. I have $40K in the bank and owe $118K on a $500K personal house. However my debt to income ratio because of my 2020 returns are holding things up. I will be working with my family to borrow money for 12 months to purchase and rent stabilize my target property. Once the 12 months of income is shown, I should be in a different situation.

is there a bank/lender that allows for one year of tax returns. for a HELOC? I have $225K+ equity in my home, at least and the ability to pay off the added debt. My 2020 tax returns during covid do not reflect this but my 2021 returns do. I am starting to reach out for Hard Money lenders within my own contacts now, but prefer to use a HELOC if I can as a first option.

I am looking to ask family for a hard money loan for a property. My self employed status and 2020 tax return are making a conventional loan difficult. Is the a template document available to use as a contract? If not, what steps should I take to help create a secure contract with the hard money family member?