All Forum Posts by: Mike Burkett

I think you are going to have a seasoning issue since you have owned them for only one week.  I think most lenders will refinance you today but at no more than 80% of your cost.  Wait 6 months and you should be able to get 75% of current value.  If you can afford to wait 6 months, it will save the cost of refinancing twice.  If you can't wait and are ok with 80% of cost, you can pretty easily lower your cost of capital today, assuming they are all leased and tenants are paying rent.  Happy to help you if we can. 

I'm guessing they turned it down because of the appraisal?  If so, the appraiser grades the house C1-C6.  C6 being the worst.  Most banks and lenders will have a cutoff around C5.  At or below that they won't lend.  Habitable generally means functional and environmentally safe.  It should have working appliances (not refrigerator), windows should be intact, no holes in flooring, functional doors.  

We love lending in Nashville

Hard money loans are easier to get than bank loans.  I agree with that.  However, one of the biggest econonic advantages of borrowing in general is you easily increase your return on invested equity.  Often times you can double or triple it vs using cash.  You also can double or triple the volume of business you are doing because you are effectively tripling the amount of capital you have available to you.  

I'd be happy to help you out.  Just to give you some idea of what is available today.  Market has changed a bit, but money is still moving.  

@Tiffany Davidson  It depends on what you are trying to do and how long you plan on owning the property.  An interest only loan increases your monthly cash flow because you are not paying down principle.  100% of the payment is interest.  If you are holding a property for a short amount of time (up to 10 years), there is nothing wrong with an IO loan.  When you sell the property, you will pay off the original loan and hopefully make money because of appreciated sales price.  If you plan on holding the property for retirement, you wouldn't want an IO loan because ultimately you want to pay off the mortgage and live off the rental income without having to make mortgage payments.   

@Daniel Mendez  I don't think it would be hard to find an investor that would allow you tag along on a walk through of a house when their contractor is there estimating the rehab cost of a house.   I'd also talk to some contractors and see if they can help you.  

@Jay Hinrichs  LOL.  Jay, I have never seen so many closed accounts on a single thread on BP, ever!

@Erik Montes  I'd be interested in that.

@Daniel Mendez  Daniel, I know you are trying to learn this business.  Don't short circuit the process.  If you want to know how much rehabs cost, meet with contractors, meet with other investors, walk houses with both of them.  Construction estimates are a sum of all of the items to be repaired or replaced, both major and minor.  2 houses side by side may be completely different.  With some experience, you will develop your own formula for rehab costs.  If you start applying a $/SF cost to projects today, you will miss something, and it will be expensive.