All Forum Posts by: Huy Thai

@Tarik Turner on the commercial side? If so, I was not aware. 

Thank you @Anna Buffkin and @Brian Garrett

I want to take advantage of the low fixed interest and 30 year term so I'm trying to avoid going commercial until I've surpassed 10 loans. Your link provided the answer I needed! Thanks!

3. HOW TO PROPERLY STRUCTURE BUYING A HOME WITH CASH

With these rules, you can see how it can be confusing to get conventional lending when buying a home with cash but there is absolutely a proper method to structuring your deals when buying cash. Here’s the secret:

• Create an LLC and have the LLC lend you a mortgage on the property you are receiving.

The reason why this works is because instead of you needing cash or receiving a cash out loan, we are now refinancing a loan – your loan. There no reason to wait any time or have any “whichever is lower” rule come into play. We are just refinancing a loan.

Here’s how it works:

• You create an LLC
• You buy a home
• Your LLC gives you a loan for the home
• You file the deed for that loan at the county courthouse
• You use the money from the LLC to buy and fix up the property
• Once the property is completed, your conventional lender comes to refinance the loan
• Your conventional lender runs title and sees there is a loan.
• Your conventional lender refinances you into a new loan, and cuts a check to your LLCâ¦a check in the amount of 75% of the value.

Please don't confuse this 75% with a "cash out" amount. The non-cash out LTV on a refinance is also 75%. We are refinancing a mortgage. Your LLC's mortgage. Essentially your LLC has become the bank/hard money lender/etc. However you want to think about it. You get to set the interest rate (it can be 0%) and you get your investment amount back sooner.

Some things to think of:

• To file a deed at the county courthouse is $100-$150 in cost (depending on which county)
• And you want that note to be pretty close to 70% of the ARV for the property if you don't want to bring any money to closing. 70% will allow you to roll in your closing costs. If you want it to be at 75% just keep in mind you would need to bring your closing costs out of your pocket to complete the refinance.

BP,

I searched the forums last night but couldn't find the answer. Some have asked this question in some form or another but here goes again.

PRO: I want to pay cash to get the deal and close quickly. 

CON: Because I use cash I either have to season for 6 months or opt for Delayed Financing Exception and capture only purchase price leaving my rehab stuck in the deal as dead equity

I know there must be a way to circumvent the seasoning period by simply adding the rehab + purchase into the deal from the beginning. I seems as simple as telling the seller I am going to add 40K rehab budget to a 60K purchase price so that my purchase shows a total of 100K. That way I can refinance and recoup my 100K asap. 

Are you experts doing it the way I mentioned or using liens? 

You are in a good area then and yes this neighborhood is an anomaly for sure! Of course, I was concerned that potential renters would be turned off by the fact that the home was 5 feet under water only a few months prior to rehabbing but I had no issues finding a quality tenant. 

I still can't help but to get nervous every time we get heavy rains still! 

@Marshall Hooper, I got this listing off HAR. I’m still seeing similar Harvey homes listed but the prices are a bit higher.

@Jason Hirko, no problem! Glad Lindsay revived this post so I could provide an update.  I need to be better about that 

@Mark Sewell this home was in the Bear Creek neighborhood in Katy. 

Niche condos require niche buyers and those are few and far between! It takes much longer to find a person willing to pay that much for that little. You mentioned other units listed. Does that mean many units for sale at the same time? Is something going on in the complex to cause many to sell like an upcoming increase in HOA? Something being built nearby that could cause the values to decrease in the near future? Regardless, your friend's unit has to have some appeal to stand out amongst the rest. Maybe he could spend some money to update it to get his asking price, or the obvious is to drop the price. Same with finding a renter, if he is getting no traction, keep lowering the rent until he gets some interest.

Hello @Eric Dufault! Did you end up finding a property to invest in on the island? I am planning on a VRBO on Providenciales but would love to hear from any investors that have had experiences good and bad. 

Hi @Lindsay Brake, I had the same issue but luckily the appraiser was able to find comparable homes that had sold nearby and appraised the home at 183K. I originally thought the home would appraise at or just above 200K and probably didn't due to some Harvey homes selling for much less than market skewing my numbers. Regardless, I was able to refi and pull out my initial investment (and then some). I've done a few more since with the same success and learned to adjust my anticipated ARV about 10% less than normal in my calculations to make sure and account for lower than normal comps.

I'm in search of a new real estate agent that can help me add to my buy and hold portfolio. My ideal area is SW Houston suburbs. I'm looking to close 4 to 5 more SFH by the end of year. I buy with cash and hard money to BRRRR. PM me if you can help.