All Forum Posts by: Peter Siler

@Mike Rice if you are planning to purchase a "fixer upper" and are going to be forcing appreciation on the property via renovation. Hard Money Loans (HML) are a good option. They typically do not look at your income statements in order to lend on a property. Once you have renovated the property you can either sell it or refinance into a 30 year fixed in order to pay back the HML. If you go refinance route it sounds like you will need a unconventional/non-conforming loan, that does not conform to Fannie Mae/ Freddie Mac requirements. This will be at a slightly higher interest rate, but still doable. (I use these types of loans since I invest under my LLC)

A note is that you may have to own the property for 6 months prior to refinancing into a 30 year fixed. (This was the case this fall) If any lenders allow refinancing prior to a 6 month "seasoning period" I would love for them to comment on this thread / reach out to me directly. 

Happy to connect and discuss further. I am local to the NOVA area. 

@Brian Beck Nice deal sir! A very quick turn around as well! 

Quick math tells me you probably net between 40K and 60K on this one. 

I am interested to know the exact address of the property.  I will PM you if you do not mind sharing. 

By the looks of it, it looks like Lake Jackson area if I had to guess. 

@Keith Long I am familiar with the HML -> renovation - > Cash Out Refi process. I am also interested in STR's in VA. I will PM you my number so we can discuss.

Hi @Tom Brayden, 

From my point of view it depends on a few variables on the short term front and long term front. As a general note, I would suggest not waiting on the litigation, this would take the decision out of your hands and like you said who knows how long it will take to settle. That leaves continuing on with the current private money loan or using the HELOC as your options.

Regarding the short term;
Private Money - what is the term length?  What is your cash flow? 
HELOC - What are the fees associated with this? Do you need the extra liquid capital from this to fund your next deal?  What is your timeline for your next deal? : 

On the long term front;
Private Money - 4.5% is not a bad interest rate on fixed rate loan (A business loan under my LLC is 4.25%) As long as you cash flow is good and you don't need the extra liquid capital you are not hurting yourself staying put.
HELOC - Obviously 3.5% is better than 4.5%, but how long would you need to have the property in the HELOC at the lower interest rate to recoup the fees associated with the HELOC.

This how I would talk myself through the situation.  I hope it helps! 

-Peter-

Investment Info:

Small multi-family (2-4 units) buy & hold investment in Portsmouth.

Purchase price: $155,000
Cash invested: $15,000

Contributors:
Sean Rooks

Detached duplex BRRRR

What made you interested in investing in this type of deal?

Acquiring a cash flowing asset with no capital left in the property.

How did you find this deal and how did you negotiate it?

MLS - Via a investor friendly agent (Sean Rooks)

How did you finance this deal?

Hard Money + Private Money + 15K of own money

How did you add value to the deal?

Renovation, including full kitchen upgrade + raising rents to market rate

What was the outcome?

Successful BRRRR

Lessons learned? Challenges?

Add an additional 10-15% to your rehab budget.
Don't rely on tenants staying after change of ownership.
Add an additional 50% amount of time to your renovation period.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Yes, an agent - Sean Rooks
Yes, a property manager - Keffer Realty

@Rachel Michalove

John V. Malatesta from Property Management INC. of Fairfax.

@Alison Ruotolo

Haha sorry I guess my post was misleading. I invest in the greater Hampton Roads area.

Although I live in Manassas VA, so I invest remotely.

@Justin Jones

I’m an investor in the area, I am happy to connect!

@Sean Rooks is an investor friendly agent in the area and an investor himself.

@Joaquin Camarasa

That is a great question. I have not looked into section 8 housing in Manassas specifically. When I looked into section 8 housing in Gainesville VA, about 15 minutes away, section 8 housing was below market rent as you would expect.

Feel free to connect and PM me, I would be happy to discuss further.