#19 3/1/1 SFR was an estate sale situation purchased from a wholesaler (this is my third buy him). This house is in far south Grandview near Cass County border (near 150/71 hwy) and is my fourth house in this particular area. Taxes in this area are very low - this house is $600 annually.
This house has a huge addition on it that gives it almost double the average sq foot for the area. Two living areas.
It does need some updating and a clean out. The house was an as-is deal and has all the family treasures left behind. This is not a hoarder house - it is in good shape and the belongings are just left behind. I paid $43,000 and am looking at putting $10k into it and rental should be easy at $950. In fact I know a lady who is looking for a house like this who wants to sign a 'lifetime' lease.
Unfortunately I have some rehabs already in progress and my moonlight/weekend people are tapped so will need to use a more traditional/full time contractor team on this.
There are some useful items at the house, extension ladders, tools, household supplies, etc.
Best wishes for your projects.
#19, sounds impressive. Keep me posted on this one. Sounds interesting, I see a few lessons here for me. Keep me informed, if you don't mind.
Leased it today took deposit prerehab two years to start little lady wants it to be her forever house. 950. she is super high quality tenant also. Fortunate. Three in a row first app quality.
Thats awesome @Cliff Harrison ! #19 is a great number! Could you share how have you managed financing till now? Have you had to pay off some loans on other properties in order to allow yourself to grow?
@Cliff Harrison Congratulations on getting property #19 and especially to be able to get a tenant prerehab!!
Yes, if you don't mind, how do you finance your deals?
Originally posted by @Jane A. :
How do you finance your deals?
If it's a distressed property/rehab needed, I use a 3.5% line of credit to buy it cash and pay out for the rehab work. Then I finance it 75% LTV based on post-rehab appraised value into a 5 year ARM at 5.325% (no balloon) with 30 amortization with some caps on increase and max rate, getting majority if not all my cash back out. If the house is in good condition (which is NOT my favorite type of deal lately, so it has to be a good price) then I pay a 25% downpayment and finance into the 5 year ARM in a more traditional purchase.
I'm running into some headwind now with my lender due to large number of loans I have, so things go through an approval committee now. I think they draw a line around 500k loan values. They also are moving me to 15 year amortization and also down to 65% LTV - I think to make them feel like they are managing risk. So I am looking for others lending partners. I do send them copies of all the lease agreements that I sign and my LTV is in good shape (32%) since I have many productively rented properties and also a well-paying w2 job.
So that is what I'm doing lately - things were simpler when I was under the 10 limit but even though the bank has started raining on my parade I am still feeling the thrill of getting a distressed house, fixing it, and having it appraise for enough to have gotten all the cash back out and being, in theory, able to do that 500 times with a modest starting nut.
I'm hoping to find my next portfolio lender who will finance out based on appraised value at 75% LTV without a balloon and keep the train rolling for one more year of acquisition. Then I'll focus more on executing an aggressive snowball payoff strategy to maximize cashflow from the holdings.
Free eBook from BiggerPockets!
Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks and techniques delivered straight to your inbox twice weekly!
- Actionable advice for getting started,
- Discover the 10 Most Lucrative Real Estate Niches,
- Learn how to get started with or without money,
- Explore Real-Life Strategies for Building Wealth,
- And a LOT more.
Sign up below to download the eBook for FREE today!
We hate spam just as much as you
Get the Ultimate Beginner's Guide
Sign up today to receive the popular eBook for free!