All Forum Posts by: Tony Castronovo

@Tristan S. might have a recommendation for you. 

Hi @John Nguyen.  Welcome to BP!  

@Vijaianand Thirunageswaram very sorry to hear of your loss my friend.

What kind of properties are you looking for? Single-family, multifamily, commercial? Rentals...flips? Might be able to advise you better after knowing more about your strategy.

@Bob Okenwa they have 7 days, which is Thursday...so will see where we stand at that point. Yes, the opportunity cost is real.

We actually won a judgment today on an eviction...but the judge warned against filing a writ due to the new rules (moratorium). What’s the point then...ugh! 🤦🏻‍♂️ Hoping they leave willingly or we might need to consider “cash for keys” (I cringe to even consider it).

What @Turner Wright said! That’s some no nonsense advice. Good stuff!

Also, do what you are doing by putting yourself out there and networking? REI is a team sport!!

@Alden Cleveland you might do some further research on Bigger Pockets on this topic as I am no expert, but recall running across some helpful information here several years back. What it sounds like is that the mortgage professional you spoke with was suggesting that you could get a 75% LTC (loan to cost) loan on the property to replace the cash you put into the property. That's not really the BRRRR model though. You really want 75% LTV (loan to value) because you will be raising the value through forced appreciation following the renovation.

Also, seasoning requirements are different (as far as I recall) if you are replacing cash vs. another loan. When I was in the single family space I would refinance properties in under 90 days (my fastest was 43 days). The model was to purchase with either a hard money loan or private money loan...use my own funds to cover the renovation...then refinance based on the new appraised value. My typical scenario was to purchase around $100-110k, put around $20k into the rehab, then refinance based on new ARV (after repair value) which was usually around $160k. It was a great model that allowed me to build a SFH portfolio rather quickly.

Yes, you will have HML costs, but you just build it into the model...the cost of doing business. Many HML's have "landlord loan" programs where they will first loan you the money for the acquisition, then refinance you into a long-term conventional loan. There are alot of good programs / loan products catered to this...or you can manage it on your own. For me the best model was to have a private lender then seek my own conventional financing. I guaranteed them 90 days of interest and could close within days.

If your daughter is into it then I think it’s great! I have two sons who have helped me with rehabs since they were 11 years old. I have two apartment complexes now which they have put in their share of sweat equity. Last year I allowed them to come in as a passive investor on one of my deals. They get quarterly distributions and will get proceeds upon sale. But I gave them 2 conditions before they could invest, 1) save $1000, 2) allow me to teach them how the business plan works. Success on both! They are 17 now and it’s been a great learning experience thus far.

Similar to @Courtney King's advice, I used to prepare "appraisal packets" on all my SFH refi's. It would include a cost breakdown of the improvements made, before/after photos, along with the appraisal at purchase (which may or may not be a good idea...but I felt more good than bad). The packet was very professional...color, TOC, tabs, and bound. I also met the appraisers at each of my properties to make sure if was "professionally presented". I certainly didn't get in anyone's way or try to push for a high value. But these little things can make a difference.

I also don't want to down play the $3-5k.  But like @Kenneth Garrett said, you will delay the process, likely pay for another appraisal, and might still not get what you want.  There is definitely subjectivity built in.

If it makes you feel any better...we did a refinance on one of my multifamily properties and it was "let's just say 6 figures" below where it should have been. My appraiser was a trainee. It was his first appraisal. Some of the techniques he used were unthinkable. My lender challenged it all the way up the chain. They didn't budge. And unfortunately, I did not have time to order another appraisal (not to mention that these are much more expensive than a standard SFH appraisal). Licked my wounds and moved on. Maybe I'll catch the right break when it's time to sell or if I refi again.