All Forum Posts by: Paul Haviland

Most lenders, not all, will only provide a heloc on primary residence. Standardly, if you don't want to use the purchase price as the value of the home they make you wait 6 months.

I'll assume as a realtor, you know this is a good price for the property/area. Option 1: would be to put it under contract now, but defer closing. Also, I don't believe it is truly two years you need to wait, but rather have two years of taxes filed. Thus you may be eligible for the loan you want in January (depending on when you are able to file taxes - likely still February). Option 2: Seller wants to sell and back away now. You could construct seller financing so it works for both of you. He is currently (if numbers are accurate, note you don't have anything for cap ex or standard maintenance), receiving $16,766 per year. That is $1,397.17 per month. If he wants to continue making the same amount until you pay him off, I would suggest making the mortgage for 12 months, just in case you have problems, but here are some example terms. Amount: $140,000 Payment: $1,397.17 Interest: 4% With that information, you could calculate the amortization/future value at any time. It turns out with that info, you would be on a 122 month amortization schedule. Some people would say that you can't obtain seller financing at that rate. I've done it several times. The key is to ask. If you have to pay more, that is also fine because it is a reasonably short duration. Note: by definition of providing him the NOI, you will not receive any cashflow while paying down this note

The closing documents are the ones that truly matter. That being said, it does create a possible "out" for them depending on the ownership. If it is in an LLC and they both have signing rights, then you should be fine. If it is in both of their names as Tenants in Common, then it would be advisable to get both to sign.

I would try to get a part time job in property management. You would learn a lot, make some money, and add to your credibility when you are ready to jump in. Also, as others stated, keep learning. Read books, stay engaged here on BP, go to local meet-ups/REIA meetings. Good luck!

Colton Sibley I'm not sure I'm able to follow the numbers you have provided nor your sellers goal. Please provide the following. -Gross rents (monthly) -Total expenses (monthly) Note: It may be better to break this down into each category of expenses for the BP folks to provide even greater feedback. - The monthly payment the seller wants (this is possibly what you are asking for.) Then also expand on what the sellers/your goals are. With that we should be able to help more.

Adam Meadows how did the test run go? Were you pleased with the results?

You point out the obvious, the lower your debt on the property, the greater your cashflow (all else equal). If you are strictly looking at cashflow per door as your metric, your best option would be to pay cash for your properties. This is why a lot of people look at cash-on-cash return because it takes into account the financing you are able to attach to a given deal. I also live in a reasonably expensive market, and if I could finance 100%, break even (after my very conservative underwriting), I would likely purchase the property. Good luck!

Assuming you only have a few properties and the subject property is 4 units or less, you should be able to use conventional residential financing. This usually offers the most attractive terms. Note, it will likely cost a few thousand to close (appraisal, title insurance, underwriting fees, etc). Good luck!

Your refinance options (out of hard money) will likely be the same as your purchase options (after 10 properties). As others have pointed out, you will likely be utilizing in-house loans, or commercial loans. Also, don't assume because it is "private money", that it is worse terms than conventional or commercial loans. I have many "private" loans with terms equal to or better than the conventional market.

Your assumption is sound (he is dragging his feet to find an exchange property), but it sounds like it is still an assumption. I've found, meeting in person is a wonderful way to break down barriers and make great progress on drafting/signing the offer. Have you delivered a fully written, signed offer for him to counter sign yet? If not, I would do that, provide all your pre-approvals, and hand it to him in a face-to-face meeting. Good luck!