All Forum Posts by: Tom S.

@Collin Luckett Just adding, if you have the ability to fund with your HELOC, it would be far cheaper than PML or Hard money. I recently opened a HELOC and I recall it's at prime for the first year (7.5% currently), and I only paid minimal closing costs.

PML or HML I would expect rates >10%, plus points, possible prepayment penalties etc.

@Carter Mayberry Just commenting on the "free up my DTI" part. I have a few commercial loans that don't report to my personal credit. But when applying for a new conventional loan, it still has to be counted. The commercial loan should go on your personal Sch E of your tax return too, if the property is used as a rental, where the mortgage interest paid will show.

@Cheryl J McGrath Personally I don't see why any RTO buyer would enter into an agreement and put down money if you don't own the house yet. If the R2O buyer gives notice on their current place and your deal falls through at the last minute, those tenants would be scrambling to look for a place to live.

@Michael Klinger  As others posted, SoFi and Discover personal loans are good options and I've used them in the past.  2-3 business days from application to funds in my checking account.  No fees, no pre-pay. Both offered up to $40k, 12-14% rate which is higher but not bad for an unsecured personal loan.  Especially if using the funds short term, there's not too much interest.

@Abigail King  I started with a seller finance, $80k, 10% down ($8K) + $1k in closing costs.

Put about $40k in rehab in it.  Mostly on trade accounts with local businesses for the materials, some business credit cards, some of the contractors were OK with waiting 30 days for payment.  So minimal impact to credit during the rehab process.

It appraised for $173k after rehab, refinanced and paid everyone off including the seller, and walked with cash to do my next deal :)

@Brandon Eike  That's a decent amount to put down.  Have you gotten pre-approved with a lender?  Or working with a real estate agent yet?  I can't speak to Richmond, but when I started out I was able to get referrals to a good agent from a real estate investor group in my area.  The agent in turn also knew good lenders that worked with investors, so that's a good starting point.

Good luck!

@Inderpreet Singh  I use Liberty Mutual for my umbrella and have been very happy with them.  I have the rental properties insured with a variety of lenders and no issues with putting all of them under the umbrella policy.

@Enrique Toledo  If the seller is firm at 10% down, you can always get a personal loan for that 10%.  However, you have to be extremely careful financing 100% of the transaction as you still need reserves, closing costs, etc. and make sure it cash flows.

You didn't mention if this would be a rental or owner occupied. If OO you can do FHA loans with as little as 3.5% down.

Good luck!

@Elliot Angus  I'm not clear what the opportunity is, are you looking to purchase this property?  Take over the rent to own agreement from the existing tenants, or something else?

@Danny Lyu  If you're getting 10% down on that loan product, I would definitely do that and just close in your personal name.  Will be far easier to purchase more property with 10% downpayments vs 20-25% for each one.

Umbrella insurance isn't too expensive, $2M for $1200 per year.

Just be sure to run the properties as a good business, address any concerns brought up by the insurance company (they usually do annual inspections).  If they say put up higher railings, additional smoke detectors, etc, complete it promptly and document it.

I've been in the landlord business for 20 years, and I've always kept my properties to code and well maintained.  No issues with any lawsuits.

Good luck!