All Forum Posts by: Rusty Scott

Most recent for me in Indy. Purchase at 60k....spent 8k on rehab. mainly went to new furnace/ac and new plumbing throughout. Then painted entire interior, tiled bathroom.

Put 20% down, 80% financing @ 4.625%

Taxes and insurance total $170/mo.

ARV is in the 90 to 100k range. Was approved for a heloc 2nd on the property for $25k...so i can pull all my cash out of this deal if I chose.

Property in trendy area with quality tenant pool.

Rented for $925. Ran an open house first Saturday it was completed. Had 4 applicants, all which met screening qualifications easily. Rented to an older couple with 760+ credit and $70k in their savings account. They pay 2 months at a time and two weeks early.

Other may find better returns on paper and show no interest in these deals. Fine by me...I like the low headache ones.

I've been casually looking at some city residential lots on the market..mainly to just hold for the time being, and possibly build SFHs on in the future. 

These are standard city lots where the original homes were torn down....and a fair amount of new builds are happening in the area, slowly. And old homes that are salvageable are being rehabbed.

I have zero experience with this..but would like to learn. What should I be aware of and be looking for while researching? 

Not trying to do anything complicated like rezoning or anything.

What about the book written by fellow BP member Dave? Can't recall his last name off the top of my head, but have been meaning to pick it up myself. Think it is supposed to have real life case studies of a ton of deals he actually did.

I'm in Indy and can continually find great rentals at true 1.5x ratios. In nice solid neighborhoods, no war zones. 

You MUST know what you are doing here though...

 You can get up to ten traditional 30 year notes, in your personal name. Over ten and you have to go commercial.

pretty sure you have to put posts like this in the marketplace, not sure.

Rodney, 

What are you renting this house for? The cash flow numbers seem rather low for that area considering your purchase price.

I'd consider doing a HELOC (up to 75% LTV). That way you can have the cash on hand for when you need it, but not until then. Interest only payments, no closing costs other than possibly an appraisal. I did this recently in a similar situation.

I believe there is a big difference here between a home in an actual historic district, and just an old home. Seems to be some co-mingling of the two in some of the comments. A 100 yr old home can be rehabbed just like any other, though plumbing and electrical may need updated. 

A true historic home in a designated historic neighborhood...well that's a different animal, but could still be profitable. Around here, that just impacts what the exterior of the home looks like....paint, siding, windows, etc

 Ok....you have some options. 

You could go to a traditional lender and get cash out refis...probably up to 4 without any issue, as you've found out. But then you are going to get a lump sum, which you'll be paying interest on when maybe you don't yet need it.

I'd prefer to call some commercial lenders, at your local community bank, and see if they'll give you a line of credit secured by several of your properties. Then you can just draw on it as necessary. 

You are likely not going to get traditional financing on homes that need major rehab when purchasing, as you pointed out

commercial rates I've gotten are in the mid 4s....however they are only fixed for 5 to ten years, and they are on 15 year ammor. Works perfect for my needs, but others maybe not.