All Forum Posts by: Thomas Moran

Lived in Raleigh for 25 years. Charlotte for the last 2 and my family owns property in Boone, Blowing and Asheville so I feel like i'm qualified to chime in on this topic. Does the deal cash flow? If so... buy it... assuming there's not an opportunity cost of a higher yield investment. A lot of folks like David Green are taking a 2-4 years outlook on yields because even if something breaks even today because of rates.... rents rarely go down so a 5 year ROI will still look very attractive. Some of the state parks in NC are the most visited parks in the entire coutnry so I don't think there will ever be a lack of demand up there.

Following this thread. Also considering them because of their seasoning requirements. Curious to hear if anyone else out there has used them

@Brent Coombs I don't deserve anything; the reality is that any decent real estate investor should be able to reno a property in 2-3 months unless its a massive undertaking. Then I just bleed from HM for the next three months. Yes it works, and I've been successful doing that but why not optimize? The time velocity of money over 3 months vs 6 yields a much better return if you can do 4 BRRRRs a year vs 2. 

@Brent Coombs Appreciate the feedback. I havn't structured a deal yet with my buddies cash, but I've refinanced several properties with fannie/freddie after using Hard Money with no problem. It's not about the initial financing contingency, it's more due to the fact that most banks won't lend a conventional loan on a dilapidated value-add house and extend a substantial rehab budget. As you can probably tell, my whole strategy is BRRRR - that's all I do, nothing else. That's where the cash comes in. My question was around circumventing the "waiting period" using Andrew's method through either delayed financing or a quick cash out refi so i'm not "sitting on my hands" for months at a time.

@Andrew Postell sorry to blow up your newsfeed but last thing - I'm assuming these are for 30 year fixed asset based loans or portfolio loans, not fannie freddie right? I found this other thread on BP where a gentleman weighed in on this exact topic and said,

"The bank isn't the one with the seasoning requirement, Fannie Mae/Freddie Mac is. They are the ones who will eventually buy your loan after it is originated. The banks have to abide by the rules set for by Fannie/Freddie, or else they will have to keep the loan on their books (it will then become a portfolio loan). So by the very structure of how conventional loans work, no you cannot get around the seasoning issues to get ALL of the money back out."

Can you confirm? Thanks again.

@Andrew Postell well said thanks. looks like my next challenge is to do a better job filling the top of the funnel with "lender leads"

Cheers!

Tom

@Andrew Postell This is awesome. Thanks for sharing the wisdom. 

Last question: I have a current loan with a HML on a deal i'm rehabbing ... i'm sure they have a lien against the property. Yet I have to wait 6 months (I think) to refi. Why are there seasoning requirements in this scenario?

@Andrew Postell I just read through that whole post and it sounds like a pretty powerful tactic, i'm also blown away that more people aren't talking about this. So if I were to run through an example - friend lends me 100k which I then use an llc (or their LLC) to put a lien against the subject property whilst funding the deal. Under fannie/freddie this would then allow for an 85% refi with no seasoning period? Did I totally butcher that into gobbledy goog? ...or is that a plausible example?

Thanks so much again for your .02

Thanks @Andrew Postell really appreciate you weighing in.

Let me make sure i'm understanding correctly - so is the only caveat to this that the personal loan cannot be secured with the subject property (or any property), or does that not matter either under delayed financing guidelines? 

Got it. So even if it was a private note, there couldn't by any kind of language that gave him right to the property in the event of default.

I am all for creative financing but I definitely don't want creative to turn into reckless! :)

Thanks!! @Kyle J.