All Forum Posts by: Steven Goldman

I recommend getting a few quotes and choosing one that is right for your financing strategy. if you are trying to get fix and flip money there is a wide disparity in rates and charges. Some Fix and Flip lenders charge interest only on the portion of the loan drawn. Other, charge on the entire amount from origination forward. If you are tight on cash, then you want to use the lender that has the least up front charges to minimize your contribution.

When I need to close fact I use private money. It is more expensive but may not require an appraisal and can close in a couple of weeks. if I can wait then I use the most competitive rehab. lender after obtaining multiple quotes.  Good luck with your deal. 

Arthur, where in Philly are you looking. My recommendation is neighborhood specific. Agents tend to be territorial, and I prefer an agent who is more familiar with your target neighborhood. I do not make contractor recommendations. Contractors come and go and are good for a while and then become unreliable. Kinda like life. I have been burned recommending contractors. Reach out if I can be of help.  

Hi Arthur, every property is unique. A value add can be as a result of modernization or addition. It all depends on the property you are considering. A property with only one full bathroom will be more valuable with a downstairs powder room or basement half bathroom. If the property is an ugly duckling from the street than an improvement to the front of the property, porch, landscaping or concrete may greatly enhance its value. I have improved fair rental value and value by increasing the kitchen size; adding an island tearing down walls between the kitchen and dining area and living area, etc.

It all depends on the particular property. If you are going to start BRRRRing in Philly assemble a team of real estate professionals who can help you with market analysis, location, title and financing. You will find that some real estate professionals are well versed in investor real estate and others are not. I live in Upper Bucks and invest in Philadelphia, Delaware, Bucks and Montgomery Counties. Good luck and keep pushing forward.

Joel the LLC is not an impediment to bank or DSCR refinancing. I do not have enough information to casually advise you as to your best refinancing options. The factors to consider are your overall objectives, your credit score, DTI and personal financial condition I recommend you find a broker or originator whom you can trust and have them weigh your options. First build a team, then build a empire.

@Steven Nguyen            Your first step is to liquidate some of your Crypto so you have liquid funds to contribute to the deal. Lenders will want to see those funds deposited in a bank or other lending institution on one or two monthly statements. Otherwise, you will have to explain the large deposit and possibly the source of the funds to buy the crypto.

You can expect to need about 20 percent of the overall costs of the purchase and rehab. You will also need about 6 months of reserves deposited in a traditional financial institution rather than a crypto account.

The next step is to find the target property and calculate the acquisition costs and costs of construction along with the after-repair value. 

The after-repair value determines if the property is a good BRRRR or flip. If the permanent financing will allow you to recover most of your initial investment and the fair market rent covers the principal, interest taxes, and insurance with cash left over, you have a BRRRR. If it does not it may still be a good flip. Good luck.

@Stacie Telles You may be able to refinance your property if the repairs or remodeling have caused an appreciation in value. Most lenders require 6-12 months from acquisition seasoning before using the appraised current fair market value to calculate LTV. Most hard money lenders will allow you to borrow up to 75 percent of the current after-repair value after 6 months and most banks 12 months. Good luck!

Caution: Personal credit card financing is a huge risk and good luck finding 0 percent interest today. The problem with using credit card funding is it destroys your DTI and thus lowers your credit score. If you decide you need to hold the property it makes refinancing either impossible or expensive.

If you are going to finance your rehab then use a LLC to purchase and a rehab lender for financing. This eliminates the problem of increasing your debt and damaging your credit score. Many of the horror stories I have heard and witnessed in real estate came from the notion that funding real estate with personal debt or credit cards is a good idea.

The old appraiser problem. This is going to become a bigger problem if the economy slips into a recession. Appraiser's learned a valuable lesson in 2008 when they were accused of being one of the causes of the great recession. We always meet the appraiser at the property with an explanation of the improvements we have completed. I have observed the older appraisers often have a outdated view of values especially in recently appreciating communities. If you research recent sales you can always provide the appraiser a list of those sales.

One of the best ways to insure a higher value is to update the property using materials and fixtures that are popular and common in the area. It makes it easier for the appraiser to make comparisons. Adding a 1/2 bath, new roof, central air or other typical improvements will increase the value of the property. Make sure the property has street appeal. The first impression is always very important. We usually redo the concrete walks or steps if they are old, graying and in need of repair. It makes the property pop from the street. Good luck. 

@Jake Baker  You should think about a rehab loan if you are going to buy and hold. You will incur more lending costs but you will only be in the first loan for 6 months. Some rehab lenders have favorable refinancing programs to convert the rehab loan to permanent 30 year financing. Most rehab loans offer 85 to 90 percent of the purchase price and 100 percent of the renovation costs. It allows you to use a small fraction of your own money. Good luck and keep moving forward!

 Hi, I am an investor and mortgage broker in the Southern suburbs of Philadelphia. I would be glad to share my knowledge with you. It would be a good idea to lookup meetups in the southern suburbs and attend them. You will meet other real estate investors and they are usually willing to share their experience..