All Forum Posts by: Ryan V.

We just submitted an offer on a REO forclosed property and were told there are multiple offers. I know it makes sense to share a BP rental calculator report when looking for a lender, but do you think it will provide any advantage in this situation where a bank owns the home? I might try and slip one in today if possible if it makes any sense.

I'm sorry my question wasn't posed correctly. What I meant was you have to compare the expected cash flow to the mortgage payment you will be paying after the refi (on the higher appraised amount) ?

Got ya... so then in order to look at cash flow accurately over the long term and effectively evaluate the deal, you should be comparing it to the ARV rather than the purchase price? @Jason D.

I am going to add onto this rather than start a new thread since they are related. I am looking at a potential deal and curious if it's worth going through a BRRRR refi or just doing a standard buy and hold on a single mortgage. Below are some numbers without other closing details for clarity:

Acquisition

Purchase Price: $129,500

Repairs: $20,000

Down payment (20%): 25,900 @ 4.5% 

P+I: $525

Refinance

ARV: $185,000

Loan Amount (70%): 129,500 @ 4.5%

P+I: $656

My question is related to the P+I payment changed from the initial purchase to the refi. Since you're refinancing the property at a higher value, your P+I payments increase therefor e lowering your cash flow. Am I seeing this right? 

Besides getting some of your initial money back out of the deal, wouldn't refinancing significantly hurt your cash flow over the loan term?

I'm in the Mooresville area and I've been keeping my eye out for some deals but I just don't see the rents making sense for the home prices right now. Because of the schools Mooresville has exploded with growth but the rents seem to still be down unfortunately. Most "deals" aren't hitting the market at all and being scooped up by those with bigger pockets (no pun intended).

Thanks for sharing your story @Fay S. 

@Mike H. thanks for the additional explanation, I forgot about the first contractor in my calcs as well... Makes sense now. And thanks for answering my other questions as well.

@Jason D. thank you for clarifying. I think I was lumping the original 11K from the first lender into that 19K number as well. 

So I have a pretty simply question that I cannot seem to wrap my head around. I just read this post by @Brandon Turnerhttps://www.biggerpockets.com/renewsblog/40000-brr...

My confusion lies within the financing part. The original private money loan was for $83k at 12% interest only. Months later after the house is rehabbed and rented the new appraisal is for $145k and a potential for $108k refinance. Let's assume for this argument he actually decided to refinance for the full amount.

Does he receive the $108k in the form of a check or wire transfer from the bank? If so, after the original lender is paid back ($83k) , you're only left with $25k, which is less than the approximate $30k out of pocket cost (rehab money, holding cost, closing, etc.) .

Why then does he say he had enough money to pay the lender back and himself on top of it? Am I missing something?

Follow up question - Can this method be done using conventional banking and/or lines of credit from a bank or does the first "buy" portion need to be completed with private money?

Just wanted to make sure I wasn't crazy. I'm trying different areas, actually going to a showing tonight after work. If this doesn't pan out I will try calling some mom and pop landlords via craigslist to see if they're looking to offload their property.