All Forum Posts by: Scott Byer

I have a flip under contract and about to close. While finalizing my extensive rehab plan (removing walls for an open concept, expanding a shower in the master bath) my contractor mentions we need to have an architect draw up our plans in CAD and then we need to have an engineer bless the plans in order to get through the City of Houston'a permit process. Okay. Fine. He gets back to me with a "discounted" bid from his internal architect and engineer of $2 sqft to get everything done. Usually this price is $2.50 or $3 I'm told. The house is 2,274 sq ft. $4500 seems like A LOT of money to transfer our digital plans into CAD (the contractor already built-out our design ideas on his laptop's software) and have an engineer ensure we're using the right beams in the right places. Am I crazy for questioning this price? What is your experience?

To add a nuance to Daniel's original question about bundling 2+ properties into one loan:  

I'm looking purchasing at least 2 properties that will likely appraise for under $50,000 each.  I understand these mortgages are hard to get from traditional lenders.  Is a sub-50k mortgage easy to get or portfolio loan?  My current plan now is to visit some local bankers and build a relationship.  I've heard they are more willing to do these small deals. If you agree with this strategy, do you think credit unions or banks are my best bet?

Any one in the Houston area have a preferred local banker for single family loans of less than $50,000? Looking to do BRRR strategies on low-income single family homes and I want to develop a relationship to secure the refinance leg of the plan.

One that will actually call you back or take your call is preferable.  I'm currently looking to have a private money contract drawn-up but can't seem to get my attorney on the phone to even request it.   

Traditional loans will only give you 80% of the purchase price. However, hard money lenders will give you (usually) 70% of the ARV to purchase and rehab the home. You may still need cash reserves to complete the work or pay closing/realtor fees and of course make the high interest-only payments per month to the hard money lender, but if you buy correctly you can make significant profits. Here in Houston, hard money lenders charge 3 points up front and ~13% APR for a 6 month loan. Extensions usually cost an additional point for 3 months. I should also mention, lenders require significant reserves in your cash accounts to qualify for a loan. They don't want you running out of money when something goes wrong. It's expensive, but worth it. For more details, see Brandon Turners BRRR strategy or search the forums for hard money. Hope this helps.