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All Forum Posts by: Richard Patrie

Richard Patrie has started 12 posts and replied 58 times.

Post: Detroit Turnkey companies

Richard PatriePosted
  • Morrisonville, NY
  • Posts 61
  • Votes 46

I bought a "turnkey" property in Detroit in 2017. Unless you live in the Detroit area, I wouldn't advise it. I don't believe their is true tunkey investing.

Post: Full-Time Investors: What Do You Do for Healthcare?

Richard PatriePosted
  • Morrisonville, NY
  • Posts 61
  • Votes 46

Obamacare killed health insurance for small entrepreneurs. Before Obamacare, I self paid all doctor visits, medicines, etc. and carried a low cost catastrophic plan to cover hospitalizations, surgeries, etc. Obamacare banned these policies for anyone over 30 and forced you into a comprehensive plan whether you needed it or not. My premium went from $395 to $2,100. Effectively killed my one-man gig and forced me to take a job with insurance. That is the only thing holding me back at the moment. If I could get a hospitalization plan, I'd quit my job today and dive in head first.

Originally posted by @Eric Veronica:

@Richard Patrie curious why you were to “wait a while before going back to the well”

Did you lender provide any details?  If you are under 10 financed properties and you can still obtain conventional loans then why not use that financing? Just curious.

 Because he wanted to loans to actually close before starting a new one. He said doing too much at once is a red flag for underwriters. 

Post: landlord liability and renter's insurance

Richard PatriePosted
  • Morrisonville, NY
  • Posts 61
  • Votes 46

I will add, that is why it's a good idea to be leveraged. If you are sued, your policy will cover it. If the attorney sees that you own a property free and clear, there is incentive to go after the property and force you to sell. If you don't have much equity built up, they will lose their appetite to destroy you. This is a piece of advice from my lawyer. 

Hey everyone. 

I'm in year 2 of implementing BRRRR for my buy and hold properties. So far I've acquired 7 properties. Two are in the midst of being refinanced with a bank. My banker recommends waiting for the other loans to close and wait a while before going back to the well. Instead, I'm interested in connecting with a private lender to refi a couple single family properties in Northern NY. These properties were initially funded with a HELOC and looking move the balances off it. These properties are rented and cash flowing. I was looking for someone interested in holding a first lien, 5-yr note on either property, roughly $25K-$35K each. Any leads would be appreciated. Thanks.

I bought my first rental property from him in Detroit. It was a rocky start, and I was new to real estate. I got stuck with delinquent tax bills, large water bills, and lead paint in the garage. I also had to dump a lot of money into it after it failed Section 8 inspection. I will say that the property management company is decent. I've owned the property now for 16 months. Since then, I've purchased 7 properties in my local area. I now see firsthand what I'm getting into. 

At the moment, it has seemed to stabilize. Major repairs are done, taxes up to date.  I may hold it this year to recoup some dough, but will most likely attempt to sell and learn from this very costly mistake. 

Post: First Deal - 8 Days to Close and my Lender is Dropping the Ball

Richard PatriePosted
  • Morrisonville, NY
  • Posts 61
  • Votes 46

@Connor Mckelvey Mind you I used a portfolio lender and didn't have to conform to Fannie or Freddie. They may have stricter rules for seller concessions.

Post: First Deal - 8 Days to Close and my Lender is Dropping the Ball

Richard PatriePosted
  • Morrisonville, NY
  • Posts 61
  • Votes 46
Originally posted by @Connor Mckelvey:

@Richard Patrie, This is definitely something I could do. I have plenty of credit available. The big question I have is-- would the lender accept this? 

I don't see why they wouldn't. As long as it doesn't adversely affect your credit score. It is a loan. Another option would be seller concessions. On my last purchase, we agreed to a price of 108K. My down payment of 20% was $21,600. However in the offer, I asked for a 6% seller concession. Meaning I financed the loan for $114,480 (6% higher) with the understanding that the seller would give me (concede) 6% or $6480 at closing. So my mortgage of $114,480 would require a down payment of $22,896. The seller would give me back the $6480, and my out of pocket is now $16,416. This reduces my out of pocket at closing by $5,184. The seller gets their 108K, and I pay less out of pocket. 

You'd need to have your realtor right up a new purchase contract, but that wouldn't take any time at all. If you look hard enough, there is always a way to structure a deal.

Post: First Deal - 8 Days to Close and my Lender is Dropping the Ball

Richard PatriePosted
  • Morrisonville, NY
  • Posts 61
  • Votes 46

What about taking a credit card cash advance? It may be pricey, but use your brother's contribution to pay it back. Cost of doing business. Is pushing the closing date out an option? You can at least ask. I'm sure the seller doesn't want to start over with another party.

Post: House paid off, should I buy a second property?

Richard PatriePosted
  • Morrisonville, NY
  • Posts 61
  • Votes 46
Originally posted by @Lori Greene:
Originally posted by @Richard Patrie:

I paid off my house in 2017. I opened a HELOC and secured 180K on my primary residence. I then used the HELOC to buy a rental property and paid 55K. This is a good strategy because you can pay cash, and the deal isn't contingent on obtaining a mortgage. I dumped 10K into it to replace the roof and other exterior cosmetics. I rented out both units for about a year, then refinanced. It appraised at $77,500, and took out a 62K mortgage. I can now pay off the HELOC. Instead, I put a little money aside and made a down payment on another property. I deposit all of the income from my W2 job into my HELOC. This reduces the average daily balance, and lowers the interest paid. You could also deposit all rental proceeds to your HELOC until it is paid, then repeat the process.

I've used this strategy to buy 7 properties in the last year. I bought my first rental in Oct 2017. 

If you acquired the HELOC on your primary residence and then move, you need to see if your bank will allow you to keep the HELOC since you no longer occupy the home. Why not stay where you are and buy a second property to rent?

 Wow, 7 properties in the last year? That's awesome. You are making me want to try this strategy. I think I need to get out of my habits and try some new things.

 Life is short!!