In preparation for TONIGHT'S WEBINAR, I want to ask: what's your best (or favorite) deal you've ever done using bank financing? I'd love to give some specific examples in tonight's presentation!
My best was a 100% construction loan where I was able to buy a lot and pay to move a stick built home onto it. We bought the stick built for $1,000 and it was good enough for the bank to count as collateral. We fixed it up, lived in it for 2 years, sold it for about a $70k tax free profit. Oh, and I got to keep the tractor, so that would make the profit about $85k. That was the good ol' days!
Purchase Price: $ 70 K
CD Escrow Set Up: $ 40 K For Rehab
Loan at closing $ 110,000
Appraised value after rehab $ 160,000
Loan amount on the back end refi: $ 160,000 * .75% = $ 120,000 (We could have refinanced up to $ 120K but we only refinanced $ 110,000)
We borrowed a long term commercial loan and paid off the full loan on the front end.
Within less than 60 days bought the rehabbed it and got all the money back.
Key to this transaction - Our goal was to buy it with banks funds. With an equity of 30% minimum after rehab. Refinance it and leave ZERO in the deal still have cash flow a minimum of $ 400 per month and equity of 30%.
Rent - $1500 (Term Of Lease 2 Years)
PITI - $ 956 (Commercial Loan 5% , 25 year with 5 year balloon)
Actual Net Cash Flow $ 544 /Per Month
We have done about 153 deals with pretty much the same numbers. The goal is to pay off our entire portfolio in 7 years or less with ZERO money stuck in the deals after refi.
@Andrew Holmes sweet midwest transactions
Let meet up for coffee/tea next time you are in Packerland.
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