All Forum Posts by: Shawn Henley

Thanks @Teri and @Cody.  

So, just so I am understanding you Cody- rather than refi my first and second into a single new conventional loan (at half a point higher interest than I'm currently in for my 1st), you would keep my first and get a HELOC to take out my 2nd and use the balance for an investment? My plan was to refi into a single loan which I would be in close to 70%LTV then get a HELOC, which I know I can get up to 90%. I was thinking that would be better because that balance of my second loan will be locked into the new conventional loan rather than be a balance on the HELOC which will be subject to the variable rate.

Thank you Andrew. I think the hang up is whether it is worth it to use the HELOC to pay off the second mortgage which would be necessary for me to be able to use it for anything else, which would give me about a 40K balance that I don't have an exact plan to pay off, where as if I were using it just for flips I would be paying it back each time I completed the deal. If I were more seasoned and knew when I could expect to make enough profits off of flips to pay back the 40k balance it would be easier to decide.

I appreciate the information you provided on HELOCs.

Are there other products out there that you would recommend looking into as a means of funding a deal?

Thanks Tim, none of us have any experience, nor do we have 2 properties to qualify. For now we will set up the LLC and give it a shot.

Hey everyone,

I am going to be partnering with at least 2 other people for my first deal, which will likely be a flip.  My experience trying to get financing with a new company is that it can be extremely hard to get approved.  I am new to real estate investing and have no idea how financing a deal with three partners would work.

We are hoping to get conventional financing for our deal and between us put up 30% cash for the down payment.

Should we form a LLC and finance the deal through the company? Or can we each get approval for financing for a third of the deal? Have any of you partnered with others in this way?

Hey BPers-

I am beginning to search for my first deal which will be a flip.  Before I go full steam ahead, I need to line up my financing. 

I have been researching and talking to my mortgage broker about obtaining a HELOC on my primary residence. The catch there is that I currently have a second mortgage of about 40k with about a 5% fixed interest rate that would have to be paid off in order to use the HELOC for anything else. With interest rates rising, I am worried about having a balance on the HELOC and possibly not being able to pay it off quickly. On the plus side, I have enough equity to pay off the second and still have about 75K to use for a flip.

I have also been considering refinancing out of the first and second loan since between the two loans I am currently at 70% LTV, however my first loan has a great interest rate of 3.25% and I do not want to lose that.

Any thoughts?

Thank you Kevin.  Investing in AL is certainly an avenue that I am pursuing.  Good deals in that market are harder and harder to come by (as are many other types in Denver).  My experience so far with AL and specifically sober living group homes is that the community approval and zoning variance process can be exhausting.  This is one of the many reasons why I am interested in getting into single family flips, rentals, and more traditional multifamily.   That said- I am very interested in increasing my AL portfolio!

Investment Info:

Small multi-family (2-4 units) commercial investment investment.

Purchase price: $325,000
Cash invested: $325,000

Property is leased as a group home for the rehabilitation of individuals seeking treatment for drug and alcohol addiction

What made you interested in investing in this type of deal?

It was a need for my other business.

How did you find this deal and how did you negotiate it?

My company found the property on craigslist as a lease. After leasing the property for 6 months we asked the seller if she would be interested in selling to us, which she was. W

How did you finance this deal?

Cash

How did you add value to the deal?

New roof, landscaping, paint, carpet, finding special use tenants

What was the outcome?

Positive cashflow right away and has continued through present.

Lessons learned? Challenges?

I wish we had paid less cash and financed with conventional financing so we could have used that capital for other investments.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

John OHara with A Better Way Realty

Hello BP community.  I am a new member as well as a new investor.  My name is Shawn Henley, I live in Denver, CO and am interested in flipping as well as long term rentals.

I've lived in Colorado for over 20 years and have been a business owner and operator since 2014.  Currently I am a owner and operator of a long term facility that treats and rehabilitates individuals suffering from drug and alcohol addiction.

I am now looking to shift my focus from the day to day operations of my business and jump in to real estate investing.

Additionally, I am working to obtain my broker license as a means to support my goals in real estate investing.

I am partnering with my brother, close friend, as well as a mentor to begin this new journey.

I look forward to networking with many of you.  I'd love to hear about a recent deal you have done, or a deal that sticks out as a big learning experience for you.

Thanks everyone.