All Forum Posts by: Erin Elam

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I do not understand why this calculator keeps saying I will need over $80K to close on this deal. I selected the loan option, it will be hard money so I didn't know what to put for # of months amortized for the first loan section. But since it is a loan why in the world would I need the entire purchase price in cash? It seems that the P&I payment is what is killing this deal, are there any other numbers you see I might have entered incorrectly? Or is this really that bad of a deal? Please help :).

This is a great topic! @eduardo Rodriguez hope you don't mind if I hope on this thread with you haha 😉. I'm interested in how the series LLC works mechanically.

For instance if I own ABC LLC, under which I form DEF, GHI, KJL series. Does each of these have 1 property in each series, thereby protecting each specific property from the others? Or should I only form 2 series: 1 for flips and 1 for rentals (heard that suggestion in PC #109).

Then let's say I have the structure done ... How do I sign the contract? ABC, LLC - SERIES DEF? ... I'm wondering because it seems like these names could get pretty long...

I too have been I recent talks with Sherman Bridge lending. Honestly right now my biggest hangup is that they lend based on the lower of the appraised value or purchase + rehab. I can understand the need to navigate risk but if the arv (which I'm sure they do their due diligence to get comps) warrants lending on it, i don't understand why investors are quick to go with an ltc loan vs arv? Is it because the apr is better on an ltc loan?

Hello BP, 

Any updates on using Sherman Bridge? I had been speaking with a rep there and just found out today they lend on the LOWER of purchase+rehab or appraised value. Does this avenue of hml lending calculation ever stop the numbers from working? Is the potential profit better since the loan is less with borrowing on a lower purchase + rehab? I hope my question makes sense 😊.

Thank you Adam and Wayne! I figured I had way over-thought that haha.

Please help my brain fog!! When using hard money ... say the HML wants monthly interest only payments. Do you have to also pay 'mortgage' payments to someone else, insurance, the utilities OOP? Or does this get paid out of the funds received from the HML?

Like if the HML gave 100K for the deal, they hold it in some sort of escrow right.. that's how they control the draws right? So if they are holding the 100K, the purchase price (say 70K) would come out of that right?

My brain can't get past this! Ugh! Do you pay the monthly interest on top of the mtg, ins, utilities? 

I remember reading about calculating the holding costs in your MAO formula by J. Scott but i don't have the book with me right now and can't remember if he said calculating the mortgage part of the holding costs was only if paying with a conventional loan.

Please help! Thank you in advance.

Hi Luis, thanks for this question. I, too, feel bad about asking realtors for comps all the time while getting a feel for the market. Most of the podcasts, blogs, and/or books that talk about starting out, mention steps like analyze 100 first or go see 50 houses first and it seems realtors get bored when you constantly ask for comps but aren't ready to buy, either because you're getting your education or the deal turns out not to be a deal (which you don't know until you analyze it with a good ARV lol) ... But maybe I haven't been talking to the right realtors? Some have been very helpful, like the lady that is helping me in OH. Did you find any other 'good' way to find sale prices, other than a realtor?

 Great insight! 

 Thank you! 

Investment Info:

Single-family residence other investment in Snellville.

Purchase price: $77,000
Sale price: $109,000

House hack, no upgrades other than a little interior paint to cover up some oil stains and repainted the trim to the backdoor, and we put some mulch in the frontyard around the tree and under the shrubs.

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

I was just looking for a house to live in; my realtor knew the area would appreciate.

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

My realtor found it before it was even listed on the MLS and since i was already pre-approved, we put in an offer within 2 days.

How did you finance this deal?

Conventional FHA

How did you add value to the deal?

I kept the house in good repair order and kept everything well maintained.

What was the outcome?

I netted over $30K with no taxes due.

Lessons learned? Challenges?

Next time we have ideas to force value and as everyone knows: LOCATION LOCATION LOCATION.

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

My realtor in ATL and the loan officer I dealt with for the FHA loan.