All Forum Posts by: Shawn Byrd

your absolutely right. I have actually started already by trying to source some private funds from family. I think buying an auctioned property for cents on the dollar for cash would allow me to do a delayed finance with a bank and provide me with the capital to continue doing cash deals on auctioned properties with delayed financing to continue portfolio building. Just need the start up cash to do so and then we will see about the deals.maybe I'll start a thread about my endevours so I can get some feedback from the community. I appreciate everyone's help. It's amazing how nobody sees others on this forum as competition. It actually astounds me that there is so much help flying around.

okay I did a bit of research and it seems that doing a cash out refinance is difficult to do, not impossible. However, I just don't see how you can get most if not all of your money back doing a cash out refi unless you have way more than 25% equity in the property. I'm sure it can be done but I'm not sure where you would start looking for these deals. Also, how can people get hundreds of properties if they have to wait for each house to season for 6 months or a year on a cash out refi. Seems like there is a secret or trick I am not finding that allows people to pull their money back out from equity and use it to buy more properties over and over again, without having to wait. Once I saw you had 160+ properties I realized I was not scaling enough but I can't seem to figure out how you would scale so quickly. I'm not looking for hundreds of properties, but if I could retire in five years by doing this that would be insane. What is it about the brrrr method I am not seeing. 

i appreciate giving me some of the numbers you use. Specifically the 25% equity after rehab. Do you manage all the properties yourself or enlist a PMC to do the leg work. If so, do you just tell them you want 2 year lease agreements only? I will look into a rate term refi because I was unaware that existed. If you don't mind, how fast did you achieve your 160+ properties. We are mainly doing this so we can retire early with a decent amount of money every month. I was think 10 years is a good number but maybe I'm setting the bar low 

i am still in the army until December and he has been out for about a year. I thought about using the VA for a multi property but it does not suit my needs very well with two kids and a wife. The old lady would kill me if I told her we were moving to a two bedroom apartment. He, on the other hand, is single without kids and could use the VA loan for a multi property but it is still in the air for him about doing it. He is not a dumb person by any means so he likes to weigh the options before making a decision, which I don't blame him. As for the auction lending, I see on auction.com they have links to get pre qualified on auctioned houses. Is it impossible out right to get financed (with money down) on an auction property, and if so, how do most real estate investers find houses well below market value in order to have enough equity to get their money back in a cash out refi, especially since most banks won't go above 80% value? Is there a better way to break into the market using the brrrr method that I'm just not seeing?

Thanks for your help. It's nice too know you can squeeze your way too ten before having to use commercial loans. The plan is, since there are two of us, to only put one name on a property at a time. This would, in theory, allow us to squeeze out 20 properties between the two of us before having too look for different lending. That's the idea anyways.

So an army buddy of mine and myself are looking to break into the brrrr method within the next year but I have a few questions I cannot seem to find on the answers to on the forums. I plan on trying to buy a house below market value at auction. I understand some risks are involved and as far as I can tell, as long as i buy below market value, check for liens that could transfer to my name via a title search and estimate a modest ARV and rehab costs, i should be able to lower the risk a bit. Is buying a house at auction a stupid idea for a brrrr method? I figure getting a house well below market value would give you a bigger chunk of change during the cash out refi? Also, is it possible to get financed on an auction deal through a bank? Do you just get pre qualified and bring a 20% down payment? During see research on the forums, I see people who have trouble actually doing the cash out refi because banks just won't do it. Why won't the banks refi people's houses that have the equity in them? I also heard that banks will only let you have up to 4 mortgages in your name before the kinda cut you off, however you can use a portfolio lender to cash out refi, what is the REAL difference between them and a bank. From my research it seems you get kinda screwed when using a portfolio lender because they want you to get a 15 year loan or a 7 year ARM. Is this true? Basically how do you positively break past the 4 houses mark without getting a horrible finance deal. I'm trying to stay away from hard money or private lenders because I'm not entirely sure how those deals are structured. Sorry for such a long post, just trying to smarten up so I don't ruin the first buy.

thanks for letting me know the change in the law. I didn't think you would have to look out for something like that but now I know a simple test on a property could go a long way.

Unfortunately I was young when this happened, so my parents ended up picking up the bill. I think they tried to sue my aunt for the cost but I'm not sure. That was over ten years ago so prices will most likely have changed anyways. If it costs thousands to strip and dispose of lead paint on a house I'm sure it wouldn't be to far fetched to assume the same price for a hazmat job. I doubt there are as many hazmat companies as there are Starbucks, so a few calls to the few companies in your area could give you rough number to add to your rehab costs. Like I said, I don't flip houses, but my fear wouldn't be the cost of the rehab, but the value of the house after everything is done. What family with kids or wanting kids later in life would risk 100k+ on a mortgage for a previous meth house? In order to make it attractive I'm sure you would have to sell well below market value.

You have to hire a certified company that specializes in decontamination and cleanup of drug operations, including meth. This is important because you cannot hide from a buyer that it was previously a meth lab or meth had been used in the house. Most of the time meth can be broken down into a concentration of chemicals that seep into the walls. A specialized spray is sprayed onto the walls to decontaminate the area, and a good scrubbing afterwards is done. The company will most likely advice you to strip the walls of paint and remove all carpet flooring. Most surfaces, like counter tops, can be cleaned and disinfected. This CANNOT be done yourself. The best way to sell the property is to have it certified decontaminated and have paperwork showing it is safe to live in. This will most likely affect the ARV of the house, regardless if it has been 100% cleaned. I'm not a house flipper, but had a family member smoke in the bedroom for years and when everything came to light, the entire floor had to be cleaned. It was a bit more hectic for us because we were living there at the time, but its much less intrusive if you are not living there while the cleaning is done. DO NOT DO ANYTHING INSIDE BEFORE THE CLEANING. I decided to scrub the walls with bleach to try and "clean" the room before hiring professionals and was sick for 24 hours from the chemicals leeching into my skin. Above all health and safety should be your concern, and then profit.