All Forum Posts by: Ted Tronnes

Thank you, Jack.

I have some cash to buy, but want to recycle much of it and continue to buy more. BRRRR appropriate strategy, howev I'm unclear about any limitations to the refi part of BRRRR. Specifically, does refinancing after a cash sale involve a lender assessing my personal debt to income ratio for approval? I have had a low income last couple years (and very low debt too) but was denied by lender on a $50k property; they said I dont make enough money at my "day job." I was shocked because that my personal liquid net worth (10 times the loan amount) didnt suffice.

In that scenario the lender was Loan Depot, a nationwide entity, but again, we were discussing something known as a "reno loan" (15% down vs 20%) for initial purchase. Within a BRRRR play and using all cash for the initial purchase, does the refi portion still depend on one's personal, day-job income level relative in some way to the amount of the loan? Im hoping that using all cash to establish outright ownership of the property eliminates the personal income question come refi time.

Thank you.

Using BPs calculator, Ive run numbers on about 50 properties in the last 30 days in search of my first SF rental property ($50-60k range)   in KC, MO market. At this level, I can do all cash, but why would I if I dont have to?  When I provided a recommended lender my personal info, I was quickly told I wouldnt qualify; my personal income over the previous 2 years wasnt high enough. 

It's true, my freelance income has been random, and the $46k salary I had for 12 months wasnt enough when spread out over previous 2-3 years. My cost of living is super low and Im able to get by just fine on what I do make. But I was still miffed. My "available cash" is a stock portfolio valued at 10x the loan amount being discussed. I have near-zero personal debt and about a 729 score. The loan officer at the national lending company, LoanDepot, knew this. Said it was about the paycheck.

So I get it... I'm not suitable for $35k loan because I'm essentially unemployed. Yet he/they also know jobs vanish over night (See also: US federal govt employees).

Anyway that's scenario #1. With one additional note. Not looking to flip just yet. Looking at move-in ready (or close to it) rentals until I have more experience. I only look at 10%+ cash-on-cash ROI and which cash-flow $300/month or more. I'm finding them., but as all-cash calculations, no interest.

Is it worth talking to a private lender or would cash flow zero out? How does one exit such an arrangement... without ending up back at the same place i wouldve been going all cash?  

Will private lenders accept, say, being a lien-holder on any existing props in exchange for a lower interest rate on the new loan/property?

Scenario 2: I've always thought one form/definition of "leverage" was, say, using one fully-owned property as collateral for a new loan. Is this no longer done? 

Thank you for shedding light on options.

Someone above alluded to a specific scenario I'm facing. Two actually. I'm considering purchasing my first SFH rental property in the $50k range using all cash. (KC, MO) Moving in this direction, I approached a recommended lender about a loan. Things didnt get very far before I was told I wouldnt qualify because my personal income over the previous 2 years wasnt high enough. It's true, my freelance income has been touch and go for sometime, and the $46k full-time salary I had for a period of 12 months wasnt enough when spread out over previous 2-3 years. My cost of living is super low and Im able to get by just fine on what I do make. But I was still miffed. My "cash" is a stock portfolio (essentially liquid) valued at 10x the rinky-dink loan amount in question. I have zero personal debt and a 729 score, fyi. The loan officer at the national lending company knew this.

Although I'm pretty well off,  to them I'm not suitable for $35 loan... because of a job — a paycheck from an employer. So I'm thinking, dont they know incomes vanish? (See also: US federal govt employees).  

Anyway that's scenario #1. With one additional note. I'm looking at move-in ready (or close to it) rentals only until I have more experience, so I dont think hard money lenders would help here. Wrong?  Are there other reasonable lending avenues for an investor with plenty of cash but a low-income history in the $20k/a range?  

Scenario 2:  I've always thought one form/definition of "leverage" was, say, using one property owned in full (or a portfolio of props) as collateral for a loan. No one seems to talk about this so Im wondering if that era is long gone. Seeing that I cant change my earning history over night, I'd like to use one or two properties owned outright to secure a new loan(s), specifically to avoid the income hurdle. Possible?

Sorry for the length here. Thank you for shedding light on options. 

square peg.   thnx everyone.

Jaysen, you're right, numbers were conservative on purpose. And a tad inflated. For worst case scenario. I will rerun. Ty

Good question TY. The duplex seems to be a single meter. Lets assume so at this point. Would this then mean its a landlord responsibility?  Whereas  separately metered units indicates tenants' reponsibility?

View report

*This link comes directly from our calculators, based on information input by the member who posted.

This is my  first post/question on BP! and my very first deal to analyze. Be gentle.  This duplex is a clean KC metro property in good shape in a historically iffy neighborhood headed towards gentrification over the next 5 years. I intended to pay cash... until I ran the numbers. The total rent (which is reasonable) does exceed the monthly operating costs (utilities + vacancy/repairs/capEx/insurance/taxes) in the BP calculator but by just $8/month! Monthly fixed costs being what they are, and also including the variable expenses as monthly costs too, how can ANY property achieve a monthly positive cash flow of say $150/month per door?  In order to do that, rents would have to be almost double what they are.  Am I looking at this incorrectly?  Im not sure if readers here can see my calculation/analysis or not. I assume so. Again, first timer here. Thank you for any insight anyone can provide.  Ted T