All Forum Posts by: Tam Nguyen

@Immanuel Sibero

Thank you, here are the answers to your questions.

The wholesaler advertised price was $95,000. Not really sure if it was in line with actual. At the time all similar Sq Footage properties in that area were being sold for approximately $155K and up. 

Wholesaler advertised repairs were estimated to be around $40K. It was reasonable given that there was a pool in the backyard that was not usable and was in need of major repair. However, I decide not to keep the pool because of the liability and insurance requirement for a rental. So I filled the pooled, which ended up cheaper than rehabbing the pool.

Wholesaler did not advertise monthly rent. I am getting 1.25% of total all in cost, or 1.57% of purchase price. I was able to pull $121K out on a (rate & term) cash out refi, which was 62% of the appraised value of $195K. I could've have taken more out of the refi, however decided not to because I wanted to keep more equity in the property.

Thank you for the kudos. What made me comfortable was that the wholesale agent that sold me the house had a bid in hand from a reputable company that they use. That made the decision to buy the house a little easier. Also, when I walked the house I did not see any signs of a foundation issues. So fortunately, the house had very minor issues and was relatively inexpensive to repair. Having an up front and honest agent selling you the house is always a plus.

Hello Jonathan, this was my first purchase and I purchased that house cash. Rehabbed with cash and then did a cash out refi. 

However, since then all other transaction I have completed were with hard money loans. For me, I realized a couple things that has help me out after that first property. First, leverage is everything. Second, having a loan in place forced me to find a efficient ways to rehab the property to get it on the market faster. The longer you hold the property during the rehab, the more you are paying in interest.

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $95,000
Cash invested: $120,000

SFR 3-2-2 in Carrollton with full rehab, rent and refi

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

Good neighborhood, good bones, good price, easy rehab. High rent area.

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

Wholesaler

How did you finance this deal?

Cash

How did you add value to the deal?

Full rehab - foundation repair, granite, new cabinets, new flooring throughout, etc.

What was the outcome?

Finished Rehab, Rented and Refi

Lessons learned? Challenges?

Not having a plan of attack before purchasing the property and in turn it took longer than originally planned to rehab, rent and refi.

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

Purchased the house from New Western Acquisition sales agent in Dallas. Georgetown Mortgage for conventional cash-out refi.

Hello Stephanie, not sure if this information will be helpful since you have decided to pass on the deal. I am not sure who your refi lender is, but I have not had an issue with refi on any of the properties that I have BRRRR'ed. Typically the lender just sends a appraiser out to do the appraisal and I provide the lender with the rehab sheet as a reference for what was completed, (foundation repair is disclosed on the rehab sheet). No issues have ever come from the lender.

Anyhow, there are two very important thing that you should be concern about if the house does have foundation issues. First, is whether or not the foundation issue has caused damage to the house in ways you can not see or cannot identify without extensive investigation. (i.e. broken or crushed cast iron drain pipe, structural framing issue, etc.). Secondly, if not repaired properly and you decide to hold property for a long time (+5 yrs). You might have to revisit the repairs again, if not done correctly.