All Forum Posts by: Tim Delaney

You may get lucky with a smaller bank willing to offer you a line of credit so that you can make a cash offer, rehab the unit if necessary and then refinance into a longer term mortgage. There was a recent BP podcast that featured a woman name Ashley who said that she was able to utilize this strategy recently. I believe she did already have some rental properties though which may have made the bank more comfortable with her.

It sounds like your cash flow would justify taking out an equity loan or their value to use as a downpayment on a commercial property if you can get a bank to do that (some won't on small investment portfolio). Or, since you would probably only get 80% out in an equity loan you could 1031 exchange them into something larger to utilize their full equity.

@Carrie A. Definitely keep them sorted by property. I use Dropbox for electronic storage which comes with a scanner in the phone app, so I can scan immediately on the go and then ditch the paper. I then track those expenses in QuickBooks.

Alternatively there is a bookkeeping service called Waveapps.com that does a good job and also has an app that will read the receipts you take a picture of and id the vendor, amount, date and then suggest an expense category. It’s free too.

You wouldn't want to be relying on hard money for any significant length of time. After you refinance even if you didn't get all out of it that you thought you would, you should still have enough cash reserves of your own to pay off any remaining hard money or private lending. It is highly unlikely that a bank would call your note on a 30 mortgage unless your are doing something illegal or unethical, so I wouldn't worry about that.

I'm not sure on all the specifics of an FHA, but you are right, you may not qualify without any external income. However, if you can show a bank that the mortgage/taxes/insurance are only 80% of the expected income of the property they may approve you. It will probably be tough though without doing at least one deal to prove that you know what you are doing.

I'm not sure about the equity split - that seems like more of a comfort level issue between you and your investors. However, you should probably be willing to accept a pretty low number since its your first deal.

It is still worth talking to banks. You should also consider trying to to find something near you that you can buy with a 3% down FHA loan.

You could find a larger single family and rent out rooms. Or find a single family that is in an area zoned for multi-family and that is convertible to a double.