All Forum Posts by: Yingchun Li

I have a question for those who have done it: 

@Nathan Click@Crystal Smith@Shu Zhu@Yingchun Li@John Warren@Ceril S.@Julie Marquez@Ruth Bayang

I am doing the BRRRR strategy right now. We bought a house for $140k, put in $85k, and it's worth $300k. I was hoping to refinance and pull 25% out ($75k). Seems perfect, right? Slam dunk success, yeah?

Well, in order to get the hard money loan, I put down $70k. The loan amount was $205k (purchase plus original rehab hold back), so with my down payment the total I was borrowing was $135k. Now that I'm going to refinance, my lender (who I've worked with before on other projects but just not via this strategy--which by the way when I asked if we could do this she was very confident we could!!) says they'll only loan for what the payoff amount is for the hard-money loan ($135k). This means we can't pull any of our down payment out, which is significant and having that cash would allow us to do another deal ASAP! This is obviously not ideal, and we'll have $150k in equity sitting in our buy-and-sell-in-a-little-bit house. 

What's to be done? Find another lender? For context, our HML is 6 months and we're on month 4. I was told if it were properly seasoned for 12 months we could do a cash-out refi, but that doesn't work for us. Does anyone know of a better strategy? I'd like to be able to pull funds out now and look for the next deal. Obviously this strategy isn't sustainable if you can't pull out your initial down payment investment...

You can have them buy your list from listsource for $0.15/lead or buy or generate it yourself. You can also search bigger pockets I think there is a code for 10% off your first order. Also there is a platinum card on yellow letters that gets you 15% off for 6 months that will pay for itself if you send a lot of mail.

As for your list criteria that is a tough question absentee owners lists are used commonly because the owner has less emotional attachment to the house and may be open to seller financing since they are already hopefully getting a rent check. If you are planning to spend more that $1000/month in marketing it is worth doing a lot of research or hiring a coach to make sure you are mailing to the right list. Also do it consistently for at least 6 months and vary the mail piece. It usually takes several touches to get a call.

@Yingchun Li, first step in my opinion would be to talk to the controlling government office in the area of your property (county, municipality, township etc...I dont know how Texas specifically does it). Rather than just "believing" that you can develop the spare lot, get a solid answer before you actually close. Nothing would be worse than finding out the spare lot is some sort of conservation area or ancient burial grounds that can't be developed on.

 If you go with a tile I would put down a crack isolation membrane to help keep the tile from cracking due to deflection of the floor.  This is typically missed.  Here are several by Mapie and there are other mfrs out there as well.

http://www.mapei.com/US-EN/Tile-&-Stone-Installation-Systems/Crack-Isolation-and-Sound-Reduction