All Forum Posts by: Wren Martin

@Roy Gottesdiener I found a Commercial Lender who will do a Loan on a Single Family, Non-Owner Occupied property for a Non-US Citizen. The downside is they will only go 50% LTV so you would have to have a lot of skin in property. Obviously, they would need a lot more information before issuing a term sheet. FYI, they might do a little better LTV if it was a larger, Multi-Family or Commercial sized property. I'm sure your looking for something with a little more leverage but at least you know you have options. If I hear of something better I will let you know.

Good Luck and All the Best!

@Sean Miller 18 is not too young to start learning about Real Estate Investing. Be patient, ask a lot of questions, read a lot of books, listen to a lot of Podcasts, attend your local Meet Ups and Investment Club meetings and thru it all you will find a mentor and build your team. Every one wants to help somebody who they wish was their younger self. Be super Coachable and Super Patient, time is on your side.

When you’re solid in your confidence and knowledge look at 100 properties, make offers on 10, and buy 1. It sounds like overkill but trust me the ratio is invaluable training to be a great Real Estate Investor.

FYI, I purchased my first 4-plex when I was 19 ... a few weeks before my 20th bday but officially still in my teens. I think I made every mistake you can think of with that property and it was my greatest trainer. Fast forward 35 years and I still value the lessons I learned from that property. My biggest regret (now) is that I don’t own it today but (then) it almost broke me and I was so relieved when I got out of it. If I had followed my own advice to you that same property would have been a huge financial success for me ... I really wouldn’t change anything for me but I know you can do much better for yourself because you have the BP network which has the greatest group of Real Estate Advocates and Coaches the world has ever seen. Especially since we don’t all agree on every topic, that open, honest, and sometimes energetic discussion provides great value.

All the Best!

@Michael Temple the LOC is probably a little cheaper than the Hard Money loan and it's more useful long term. I've heard it said "The only thing worth more than Money is access to Money" and your LOC gives you access to Money that isn't really costing you anything until you deploy it.   Hard Money has it's place in your Tool Box as well so having that sourced in advance will help you properly evaluate the deal.  Assuming you don't already have your project under contract you want to be ready to go as soon as you find your deal.  And there is plenty of Hard Money around for good projects in good markets.

I agree that your better having the project in an LLC during the rehab. I would purchase it in the LLC, rehab it in the LLC, and refinance it in the LLC... I would never take it out until the day I sold it ... if I ever did. (Not saying it wouldn't go into a Trust at some point like @Scott Smith mentioned, which is sound advice in the right circumstances)

If your Lender is telling you that you must put it in your name to get the Refi it only means that your Lender cannot get you the Loan unless it's in your name. That doesn't mean you don't have a good Lender, you obviously do have a good Lender because of the LOC, but not all Lenders have the ability to do all Loans. You will need multiple Lenders during your Career as a Real Estate Investor. Every Lender has their preferred Loan Product or two or three as is usually the case. You want to match your projects up with right Lender for the specific circumstances of that project.

If it will help, when you find a property your interested in PM me the specifics and I will help you find an option that will allow the Refi in your LLC.

All the Best!

@Michael Temple I like your plan of using the LOC it is an excellent option that few people take advantage of. I think you have a very sound plan. I suggest a mild tweak. I don't think you need to take the property in and out of your LLC that's just a waste of time, effort, and in some States could trigger a taxable event (I don't know anything about Ohio and I'm not a CPA so you need to investigate that comment with a local Professional). What I do know for certain is you can get the Refi in the name of the LLC. It may not be from the local Bank where you got your LOC but a Commercial Lender can do it. And if your planning on holding the property as a long term BRRRR to spring you forward into multiple deals you can get some Investor terms that will really work out good for you.

All the Best!

@Roy Gottesdiener to answer your question about lending to a Non-US citizen the best answer is the world famous Real Estate response - "It Depends". I believe there is a Lender for every deal if your willing to do what it takes to find one who will work with you. You might want to partner up with a US Citizen to make it a little easier but it would need to be someone you really, really trust as they would probably need to have the majority membership of the LLC.

Your ideal Lender is going to be a Commercial Lender who uses Common Sense Underwriting and is more focused on the Collateral (Property) and the Cash Flow (Rent) than on the Borrower.  This is common in Commercial Lending but not common in Residential Lending

We're starting to see some Low and No-Doc Loans available which in theory would possibly resolve the citizenship question.  Naturally, a lot of us are going to be concerned about the No-Doc Loans getting too big of a bite at the Apple because too many Investors are unwilling to discipline themselves enough to not get in trouble with it.

I'll do a little research and let you know what I come up with.

All the Best!

@Cheri Crane with the equity in your Duplex you might look into a Commercial Line of Credit (LOC) with the Duplex as Collateral. This way you can access the equity, or a big part of the equity of the Duplex when you find another property to acquire but it wouldn't cost you very much until you found the new property. Then you could purchase the new property with all Cash (if it is within your available Capital) or you could use your available Capital as a Down Payment to help you qualify for the new Commercial Mortgage on the New Duplex.

You want to find a Commercial Lender, I suspect the Lender you spoke with who didn't have any interest in the Duplex was more Residential focused... although a Duplex should have fit right in their 1-4 wheelhouse.  But every Lender has their preferred Asset they want to Lend on so you need to ask around to find a Lender who Loves Duplex's.

Cash is nice to help you get the best deal. Many Sellers will prefer your offer of Cash over another that is conditional on Financing.

After you purchase the new Investment property you will want to Refinance it so you can pay down your LOC as it will probably be a little more expensive than the permanent mortgage you can get on the Duplex. Also this will allow you to re-use the equity in the Duplex again for another property acquisition. And then just Rinse and Repeat the process as many times as you feel comfortable.

One word of advice though... don't think for a minute that this is a Passive Investment, you will be working.  Some days it can be very, very tough, and other days you just want to "Pinch" yourself because your having so much fun; but it isn't a Passive Investment like you might get with some of the other options you mentioned... but in my biased opinion it's a whole lot better.

I hope that helps a little.

All the Best!

@Corbin Jackimowicz I do the occasional Flip in the Valley and would be glad to chat with you about it to help you get started.  

I just closed on my most recent flip on May 8th; it was in an up and coming neighborhood of Central Phx.  It took a little longer to complete the Rehab than planned and speed is very important to the overall success of Flips so while the project did make a profit it didn't return the numbers we originally planned... that's the way it goes sometimes.

@Account Closed there is plenty of available Capital with appetite for Fix & Flip in the greater Phoenix MSA right now.  With your experience and a solid Rehab plan I'm sure the Capital is more than Ready, Willing, and Able get in on your Deals.

All the Best!

You should be able to Refi the properties under the LLC... or since they're paid off place new debt on them without needing to take them into your personal name. In fact, I would anticipate that if your talking to an Investment Lender or a Commercial Lender they would require the properties are in an LLC. All of my properties are in LLC's.

There are a lot of variables that you will want to discuss with your Commercial Lender... I'm assuming all these properties are Non-Owner Occupied???  You need to have a solid plan for the funds.  Ability to repay the debt i.e. the properties will still cash flow with the new debt.  And a realistic timeline both to receive funding and to pay back funding.

Depending on the Asset Class of your Properties (SFR, Multi-Family 1-4 and 5+ Units, Commercial), where they are located (Solid MSA or Rural America - NE Philly is probably a Solid MSA ), and your credit profile, there are products available in a wide range of term and rate that might work for you.

If you have Time you can shop for a term and rate that your comfortable with. Remember when it comes to Capital, Cheap takes Time and Quick is Expensive... but we're talking Opportunity Capital so as long as you have a good plan and put the funds right to work the cost isn't the most important component but rather the ROI on the project you get by using the funds is what really counts. That's probably pretty easy to compare with how much your properties appreciated over the last 12 month period and how much you expect they will appreciate in the next 12 months compared with what you expect adding another property will net.

By combining several properties into a portfolio loan you might even find it's easier to find funding than if you wanted to place debt on them individually.  The larger the loan amount the more options become available.

Keep at it, a "Yes" is in your Future.

All the Best!

A great thread, multiple opinions on several REI topics. This is what makes BP the great place it is.

For myself, I prefer to purchase and hold all my properties in an LLC for most of the reasons which have been mentioned.

There are loans available to LLC's, some have a 30 year fixed rate term. As mentioned above, you need to be persistent and shop around but they are available. When you find one source you will probably find several others, that's just the way things seam to work. I recommend talking with an Investment Lender or Commercial Lender, they have different products than a Residential Lender which might work better for what your trying to do.

You need to know your plan for the property to determine what is the best loan structure for your specific situation.  If you don't plan on holding the property for 30 years it might not be the best term... but then again, maybe it is, only you can determine that by looking at all the variables.

I encourage you to be completely honest with yourself, your Insurer, and your Lender. While purchasing in your own name and then transferring into an LLC is legal for legal reasons, you want to make sure your Lender approves it in writing just in case things go sideways in the future so you're not put in a position of trying to defend a bank fraud charge. I know some people say it never happens but where were they in 1986 or even 2008 for that matter. Honesty is absolutely the best policy. You can be super successful in this business for a long, long time and still do everything on the straight up and up... you don't need to bend a single rule.

Keep at, stay positive, and "Yes" is in your future.

All the Best!

Wren

@Martin Mondejar I believe when we last spoke I mentioned I was doing a flip in Phoenix. I thought I would share some of the data on this project to help you with your analysis. The house is near 19th Ave & Indian School, so a fairly central neighborhood within the I-10 - 101 Loop. I'm adding a bedroom to make it a 4/2 with Master Suite. Per Rentometer.com the avg. 4 Bed Rent in that area is $1,443 and the median is $1,298. ARV is $345,000. Rehab cost is $42,500 which includes all cosmetics plus a new open floor plan Kitchen, Bedroom, Pantry, and Laundry. I used a private money lender at 12% w/ monthly payments, loan LTV is 65% of ARV. No points, no fees. I presented the deal to (3) HM lenders and they were all 12-14% w/ 3-4 points and some admin fees. On your analysis you show 8% loan, I assume for the HM. I don't believe you will find that low of a rate unless you have a private money source that is probably Family. I hope this helps.