All Forum Posts by: Taylor White

My current rental is in Southwest Fort Worth, a couple miles South-East of TCU. I lived there for about 3 years before renting it out, so I have great financing on it. I'm clearing about $400/month in cash flow. It was in decent shape when I bought it, but I added value by painting everything, inside and outside. I also added a really nice craftsman style front porch and did some smaller updates on the inside. You can see pics of it on my profile!

Hey Tony! I'm also an investor in DFW. I only have one rental at the moment, but am looking to scale up. I have found that DFWREIClub.com has a great list of references and a lot of trainings and meetups that they host. They also have a forum on their website. Good luck!

Please feel free to jump down to the questions at the bottom of this post! I don’t want to scare off any potential help with a long post, but I wanted to lay out a theoretical situation and ask questions at the end. Please let me know if any of my steps along the way are wrong/misguided. Question numbers are in parentheses throughout the scenario.

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My goal is to start BRRRRing SFR properties in my neighborhood. I am going to start "Walking for dollars" and picking out distressed/abandoned properties. I already have owner info and such from the county assessor. Once I pick out several properties, I will send out personalized mailers. (1)(2)

Once I get a call back and a willing seller, I will draw up a contract (with the document I pulled from the Texas Real Estate Commission.) (3)

Next, I would have at least 5-7 days option built into the contract so that I could get contractors in and have estimates. Then, if all goes well in the option period, the seller and I could go to the title company for closing and funding. (4)(5)(6)(7)

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1.Based on square footage and exterior condition, I feel like I could go ahead and make contingent offers and include that in my mailers. Would that be a good idea?

2. I would also want to include a seller finance option. So my mailer would say something like “I can offer you up to $60,000 cash or $70,000 with seller financing. *contingent upon walk-through” This would be a personalized part of the mailer and I will figure these numbers up based on what I’ve seen of the house and county info. Would that be a smart way to handle that or should all numbers be discussed in person?

3. Do I need to use a real estate agent? It seems that I could, with a little research, fill out the offer contract on my own and avoid using an agent. I’ll be using PML or hard money. I’ve bought 2 houses already, so I know the process fairly well and want to make sure that going agent-less is ok?

4. If I use private money lenders (family/friends) would I just have them wire funds to the seller/bank at the time of closing? Or should I have my lenders send me the money ahead of closing so that I can send it to the seller?

5. I’ve been told that all of the documents that I need between my lender and myself can be taken care of at the title company. Is that true? If not, what documents do I need to have prepared/signed before I go to closing?

6. Funding question… I have several people interested in investing with me that have smaller dollar amounts to offer (like $15-20k each.) These are all personal relationships. How should I utilize that money and how do I secure each person’s investment with the property as collateral? Would the highest investor have the number one lien spot and the rest would be listed in the 2nd lien spot? Would this be considered syndication and thus require filing with the SEC?

7. I also have someone interested in investing a larger amount with me, but they currently live outside of Texas. If they were to completely fund a BRRRR for me, would that raise SEC red flags, since it would technically be an interstate transaction?

But I should add... if you can find a lender that will do a low-interest HELOC on your investment property, then go for it! Having a big chunk of money available at any time with only 4-5% interest on the borrowed amount would be an awesome thing to have. I just couldn't find that from the local lenders that I spoke with.

Hey @Tim Harwick, thanks for asking. I ended up not doing a HELOC and I didn't purchase the turnkey property. I did learn a few things along the way though. I connected with a local lender that does in-house loans and decided to refinance my primary home through them, to get a lower rate. I also looked at doing a refi on my investment property through the same bank... they don't do heloc's on investments (and I called around to several local banks here in DFW, and couldn't find a lender willing to do a heloc on an investment.) My only option there was to do a cash out refi, which probably would have gotten me $15-20k of cash in my pocket, but at the cost of about $3-4k in closing costs. And my interest rate would have gone from 3.85% to about 5.00% so my cash flow would've been cut by about $100/month. I decided that it wasn't worth that just to get a property that might cash flow $200/month.

I'd recommend letting that equity keep building in the investment property until the cash out is big enough to justify paying the Closing Costs.

My next step is going to be either using private money lenders to do a BRRRR, or finding a seller who would be willing to do a low money down seller-finance deal.

Let me know if you have any other questions - I'd be glad to help!

Thanks @Nate Marshall! I guess that would sort of be like having a pre-approval letter from the bank. I can just draw up a proof of funds document and discuss what funds are available from my private lenders and have them sign to that effect. I'll be using lenders who I have personal relationships, so I don't necessarily need the formality on that side, but for the sellers, I guess that's a good thing to have.

@Jerel Ehlert

Thanks so much for the thorough response!

Hey all, 

So I have several interested investors who have seen the 2 houses that I have remodeled and are interested in lending me private money. Now my only hang up is... What are the logistics of this? I'm just trying to figure out my next steps so I can start making offers asap!

For a quick summary on what I'm doing... I'm looking to BRRRR SFH's in my area. Distressed properties that are under $60-70k and need extensive renovation. Looking for ARVs that are $120k and up. I will probably be using entirely investor money and offering something like 8% interest delivered within 12 months. I will have some cash reserves of my own.

1) Would you recommend going to an attorney first to draw up papers for these agreements? I've been told that the title company can do some of this, but if the protection/thoroughness of an attorney would be way safer, then I'd happily pay those relatively small fees upfront to save headaches later

2) What does it look like when you fund a deal with investor money? Will they need to wire funds directly to the seller at the time of purchase? If I'm using personal friends who trust me implicitly, would it ever make sense to hold their investment while I'm looking for a deal so that I can move quickly, or would that have some bad tax/legal consequences?

3) My lender mentioned something about needing the note to be signed by the investor so that they can pay back the investor directly... Otherwise they may not be able to do the refi. Does anyone have more info on this? Is the note he's talking about just the agreement that I have with the investor, or does this have something to do with having their name on title? I'm a little lost on that one.

4) The investors I'm using are personal relationships and don't necessarily have real estate investing experience. Would it be in the best interest of both parties to keep it simple and just do a full payout when I refi, or is it better for me to still be making interest payments to them during the rehab phase?

Even if you can only answer one of these questions or have other related advice, I'd really appreciate any feedback!

Investment Info:

Single-family residence buy & hold investment in Fort Worth.

Purchase price: $92,000
Cash invested: $15,000

This was my first home, and I lived in it and updated it for about 2.5 years before renting it out.

@Ali Boone you’re right, I probably could get a lower rate with the cash out refi, but I would also lose money on the front end by having to pay closing costs again. Also my current rate on that house is 3.85% so a refi would probably leave me with a higher rate. I’d rather have a 6.5% rate on the 20k than a 4.5% on my entire mortgage.