All Forum Posts by: Rashad Luckett

@JD Martin

I am no lawyer/lender or law expert but I have done this twice in the last 2 months or so. It's certainly legal ( I am assuming that my lawyer and the bank doing the refi wouldn't do it if it wasn't) and yes it is a loophole around the seasoning requirement. The fact is when it comes to refinances banks treat purchases done with cash differently than they do purchases done with mortgages. The mere fact that a mortgage is used to make the purchase makes all the difference. I know it seems weird but when written as a mortgage the refinancing bank really doesn't care how the original lender got the money. Think about it.....If you got a hard money loan and then went to refi, does the hard money lender have to show your new lender where they got the capital from? No. If you get a private loan from a seller that owns a property free/clear and then need to refi does that seller have to show your new lender where the money comes from? No. 

@Neil Sinha

My experience has been that they do not care as long as....

1. The note was used to purchase the property

2. It is properly recorded at the courthouse

3. You have made the necessary payments

4. The appraisal supports the LTV

It may seem odd but when you think about it, they do this refinancing hard money rehab loans all the time. 

@Naveen Kumar

I typically refi in 30-60 days max. Writing the note from my LLC that way accomplishes a few things....

1. Gives me as much time as I need for unforeseen items

2. Most hard money loans are written this way so banks are used to seeing it so it should not draw any extra scrutiny. (purely my opinion only)

@Naveen Kumar@Neil Sinha

This is the strategy I used on my last 3 properties. Although I have not seen any 80% LTV on investment properties only 75%. I make sure that my purchase + rehab is 75% or less of ARV and that is what I have as a private mortgage from my LLC. As long as the appraisal comes back solid, I can get all or most of "my" cash out then do it again. Here is an example of my latest one......

Purchase Price: 45k

Rehab: 22K

Mortgage from LLC: $67k

($500/mth interest only for 11 month with 67k due on 12th month, and yes I actually make the payments to my LLC and provide the canceled checks to the bank. Most times that is only one check because I generally don't take on rehabs that I cannot finish in 30-45 days. I also factor these payments into the rehab cost along with other estimated closing costs to ensure I get it all returned)

Appraisal: $90k

New Mortgage: $67k with traditional lender (check for $67k to my LLC at second closing to pay off initial mortgage)

@Tom Gimer @Vaughn Smith Thanks!

Hi BP Family, 

I am working on Buy and Hold #7. All of my deals have come from the MLS thus far. This is the first time I will be meeting with a seller directly. I am scheduled to meet with the seller tomorrow. My question is, once I see the home, should I have an agreement on hand in case I like it, make an offer, and we come to an agreement or is that to pushy? Would it be better to just come to a more informal agreement and follow up with written a day or to later.

The seller is an older woman and I just don't want to do anything that would come off as pushy or would turn her off. I can tell she has already been stressed with the process as her first words were "Are you a flipper? I won't sell to a flipper!".

What are your thoughts or what do you normally do?

Banks that want too much for their foreclosures. LOL

@Eric Backer is spot on with his analysis of the downtown area. I have rentals mostly on the east side and south side (close to GSU-Armstrong campus) of the city. Portions of the east side are going through revitalization efforts and those are the areas I am in. If you are not careful, there are still some areas that suffer from a lot of crime on that side of town. However, things are changing fast. I grew up in a rough area on the east side and it is barely recognizable to me now in a good way. 

I am consistently renting 3BR for $1075-$1150 and 2BR for $950+. My typical all in for my properties ranges from 65k-95k after purchase+reno. That is my current comfort level for price range. You will not likely be able to do that in the downtown area though. :)

I would add that we also have two large hospitals (I work for one of them) that are major employers and the overall employment picture here is pretty good in my opinion.

I have done this. Not a bad idea at all in my opinion. Watch out for the fees. in my case it was just a one time processing fee of less than $100. There will be interest but it goes back into your account since its your money anyway. Be sure to use a loan though and not a withdrawal.

Hi BP Family!

I am finishing up buy/hold rental #6 and it will be listed for rent this week.

2 bed 1 bath 900 sq ft 

Purchase Price 45k 

Repairs 20k 

ARV 90k (appraisal pending)

Rent: 950/mth

Repair overview and photos here.....

Repair/Photos