Advice on Milwaukee BRRRR and hard money loan

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Advice on Milwaukee BRRRR and hard money loan

Andrew FosticzPro Member
New to Real Estate · Grafton, WI · Member since 2017 · 8 posts · 4 votes

New investor looking to purchase a property in the Graceland area in Milwaukee - seeking advice on BRRRR strategy and hard money loan.

I have negotiated a selling price of $94k on a 3 bed, 1 bath home that needs a new roof, bathroom and kitchen updates and interior paint throughout. Water heater, furnace, and A/C unit all currently work, but are between 15 and 20 years old.

I have approximately $50k available in cash to fund this deal, however, I am interested in a hard money loan. Given the roof, bathroom, and kitchen updates, I'm assuming I will need between $20 and $30k for updates immediately. ARV should be around $150k.

I am seeking advice on how to proceed, if I should proceed with this deal, and possible partnerships to learn along the way.

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Jason Shackleton
Investor · Ontario · Member since 2015 · 486 posts · 250 votes
5y

Hey @Andrew Fosticz congrats on landing that deal. You are going to want to move fast at this point to ensure you can get any type of mortgage originated before closing. Preferably you already have a private/hard money lender lined up and a general idea of what you are approved for etc. Some private money lenders even offer a type of pre approval so that you know what you qualify for prior to shoping for deals.

That being said you are now going to want to look for a private/hard money lender that lends on ARV and can meet your low loan amount requirement. You are going to want to get private loan quotes asap.I know of a lender that meets your current needs.

Good luck 

Jason 

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  • Jason Shackleton
    Investor · Ontario · Member since 2015 · 486 posts · 250 votes
    5y

    Hey @Andrew Fosticz congrats on landing that deal. You are going to want to move fast at this point to ensure you can get any type of mortgage originated before closing. Preferably you already have a private/hard money lender lined up and a general idea of what you are approved for etc. Some private money lenders even offer a type of pre approval so that you know what you qualify for prior to shoping for deals.

    That being said you are now going to want to look for a private/hard money lender that lends on ARV and can meet your low loan amount requirement. You are going to want to get private loan quotes asap.I know of a lender that meets your current needs.

    Good luck 

    Jason 

    1Reply
  • Andrew FosticzPro Member
    OP
    New to Real Estate · Grafton, WI · Member since 2017 · 8 posts · 4 votes
    5y

    Thanks for responding with actionable guidance.
    I will reach out to hard money lenders today.

    I am all ears if you can share the lender you are referencing that meets my needs.

    Thanks again!

    0Reply
  • Jeremy Trad
    Real Estate Broker · Milwaukee, WI · Member since 2016 · 121 posts · 81 votes
    5y

    Check out Milwaukee Hard Money. They should be able to help you out

    0Reply
  • Rebecca KnoxBusiness Member
    Specialist · Milwaukee, WI · Member since 2014 · 1k+ posts · 1k+ votes
    5y

    The numbers seem a little tight to use hard money or BRRRR but that's just my opinion. I agree with Jeremy, for this deal, try Milwaukee Hard Money or if you can find a friend to lend you money, it will be easier on your pocketbook.

    Captain Save-A-Home LLC
    WebsiteView Page
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  • Andrew FosticzPro Member
    OP
    New to Real Estate · Grafton, WI · Member since 2017 · 8 posts · 4 votes
    5y

    Thank you for the recommendations to use Milwaukee Hard Money.

    I agree the numbers are a little tight. I am excited to get my first deal (outside my househack), and I expect  I will leave some money in the deal.

    The seller is remaining flexible with timing while I figure out how to navigate many new-investor steps. Heading into this deal, I have a mindset to gain knowledge and push myself out of my comfort zone.

    I appreciate any and all advice you have for a new investor looking to learn.

    0Reply
  • Marcus Auerbach
    Investor · Milwaukee - Mequon, WI · Member since 2010 · 5k+ posts · 7k+ votes
    5y

    @Andrew Fosticz I have been BRRRRing for over a decade and your rehab numbers are about half of what you will end up with, if you do everything mentioned. 

    However, I can tell you most of my deals in the last 3 years look very similar - meaning my total expenses are close to ARV. However, still worth it to me, because now you have a fully rehabed property, we usually swap out all the machanicals and plumbing as well, and you won't have much capex for the next 20 years or so. What works currently in your favor is that Milwaukee prices are going up about 1% a month (10,26% last year median home price), you can check detailed numbers on my YouTube channel. So by the time you are done your ARV will have moved up too.

    Your first option is to fund it with family money short term and then refinance after you are done. Real estate is a solid investment, especially now and a lot of people have money in a 0% savings account or are worried about about the stock market.

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