All Forum Posts by: Ryan Stevens

@Wayne Brooks my understanding was that you only pay interest based on the number of days the principal balance is left unpaid for that payment period. 

Are you saying the period instantly resets as soon as I make a payment and interest charges start to add up each day again?

Hey Wayne,

I hope this doesn't come across the wrong way, not trying to sound like know-it-all... but could you take a look at the finance code for me and double check? I does say the following, "(b) The true daily earnings method is a method to compute an interest charge by applying a daily rate to the unpaid balance of the principal amount. The earned finance charge is computed by multiplying the daily rate by the number of days the principal balance is outstanding."

That part definitely sounds to me like the only interest that could be charged using that computation method (true daily earnings method), is 1/365th of the total interest since the balance for that month was only unpaid for 1 day. In my specific auto-loan contract it states that the true daily earnings method can be used. Maybe I'm still reading it wrong.

Hey guys,

I have been looking everywhere for info on how a simple interest loan could be used as a supercharger on rental property cashflow by paying for literally ONE DAY OF SIMPLE INTEREST PER MONTH IN TX.

A couple months ago I bought a truck. When I sat down with the finance guy we got to talking and he started to explain how I could take advantage of a simple interest loan, specifically in the state of TX because of a "loophole" in the TX finance code. He claimed that his family in Louisiana would buy cars in TX to take advantage of this. Here is a link to the finance code... https://statutes.capitol.texas.gov/Docs/FI/htm/FI.342.htm

Basically, if you make your first payment, then immediately set autopay to make your second payment on the first day of the 2nd payment period, you will only need to pay for the 1 day of accrued interest since the balance was only left unpaid for that 1 day. It obviously sounds too good to be true and I was HIGHLY skeptical about it until I pulled up the finance code in his office. 

My mother and father-in-law (she is an office admin at a RE brokerage and a Realtor) just refinanced their home using a simple interest mortgage. They brought the idea to a lender after I explained it to them and he confirmed that it would work the same way on a mortgage. Again, seems WAYYYY too good to be true. 

Imagine paying literally a couple bucks of interest a month on your deals in TX. I'm seriously looking for my first deal right now and would like to take advantage of this if it is legit. It seems to be working on my truck. The in-laws still have their first payment due in May so we will see how it works out when the second payment comes up in June. 

Very exciting stuff if it works out. Seems like it would be a major game changer. I'm going to call the lender that did their refinance tomorrow and see if there is any sort of catch, especially on investment properties.

Even if this crazy method doesn't work, wouldn't a simple interest mortgage be a big deal for rentals? Pay hundreds less in interest and get the home paid off early to avoid paying the higher amount of interest towards the end of the loan term since it doesn't go down like a traditional mortgage?

Why would banks even allow this to be a thing? Why can't I find literally any info sources on this online other than the finance code itself? Did the financing guy at Dodge just scam me and I should file a lawsuit against them? Lol

Thanks and looking forward to your thoughts and comments.

Hey Everyone,

My dad and I are interested in purchasing a 20+ acre piece of land in North Texas and are having issues with financing for the $250k sale price. We're cash poor at the moment and don't have the money to buy it right now.

All together, we own roughly $4M in properties outright. Some is land, some is my Dad's home, and a few other single family homes we are flipping. We have a $700k flip coming up for sale next week, which once it sells we could easily allow us to purchase the land with cash proceeds. 

However, we are currently under contract on the 20+ acre property, contingent on my Dad obtaining a refinance on his home. He has been semi retired for the last 4 years and it is not looking good on the refi right now due to his heavy income drop.

What suggestions/referrals do you guys have for this situation? We're open to any options that would net us the $250k needed to buy the land. We would prefer to have this deal closed before the $700k flip house is sold. We're nervous that the deal could fall through and have to walk away if we don't get financing soon. 

Thanks in advance for any advice!

My dad and I have partnered on two flips and one single family rental over about two years. We purchased each deal with cash and had the properties in our LLC so we both had part ownership of each property.

We would like to start leveraging the properties we buy and start using the BRRRR method. How does this work if an LLC can not typically qualify for the refinancing of the property? Are their lenders out there that work better with corporations and LLC's? Is there some way it can work where we both still have ownership of the property, can refinance the property, and still protect our assets?

My worries are:

1. Dealing with the due on sale clause (I realize it is rare to be called on it, but we want to be safe)

2. How could we split the cashflow and profit at the time of sale if the property is only purchased under one name?

3. If the property is titled under both of our names would that complicate things on the financing end? He would definitely qualify for significantly more than me.

4. We both have assets that need to be protected.

Any suggestions would be very much appreciated! I'm sure there are others out there wanting to partner up with friends/family wondering the same thing. Thanks!

About Me

I decided to get my real estate license when I turned 18. I began taking classes my junior year in high school while juggling school and varsity soccer.

I sold my first house for $580,000 just a month after graduating high school at 18 years old. Since then I have held a couple different part time gigs while continuing to work as a Realtor.

I have worked under a luxury custom home builder since 2013 learning what it takes to build homes in the booming DFW market. I have also operated my own small real estate photography company and I manage social media/web marketing for the same custom home builder.

In 2016 my dad and I joined together to purchase our first rental property and our first flip (paid 100% cash for both...). Both projects were successful and we are just about to list our second flip next month.

I am wanting to turn my focus towards purchasing small multi-family units through financing so I can start building up my own real estate portfolio.

Experience

Realtor® since graduating high school in 2013

2 Flips

1 Single Family Rental

Misc. work for a luxury custom home builder since 2013

Real Estate Goals

2017: Acquire my first multi-family unit

2018: Buy at least 4 multi-family units

2019: Buy at least one Multi-Family Unit per month

2020: Start looking into larger multi-family complexes while continuing to purchase one multi-family unit per month.

Currently Seeking

Help understanding the best way to finance and manage multi-family units.