Baton Rouge, LA · Member since 2017 · 19 posts · 5 votes
Im a new member in the bigger pockets forum. Outside of some mobile home units that I sold 10 years ago, I do not have much actual experience in real estate investing. I've been researching here, and other places, listening to podcasts, reading, and doing mock financial analyses. I feel pretty prepared to start making some purchases, but would prefer to partner with someone for the first few transactions to get my feet wet. I'm primarily interested in Multi family rentals and I DO have the cash ready to go. If you, or someone you know, has some experience in MFR but maybe not enough cash to do thier next deal then I may be intersted in partnering with them.
IF you would consider working with manufactured again, I am doing a lot of deals up in Michigan and having a lot of fun. I am always open to partnering with folks that are of a like mind.
HI Jeremy, Are you looking to invest locally, or remotely? I am starting to pursue small multifamilies (duplex, triplex) in Dearborn, MI and would be open to discussing what I'm finding.
sorry guys - i accidentally hit copy and paste there:) that's not at all what I meant to post.
I am certainly open to partnering with someone but it would have to be someone local
What I meant to ask was.....What are the pros and conce to financing from the get go versus paying cash then immediately doing a refi to pull the cash back out
Jeremy Stroud it all comes down to the numbers. I would advise you upgrade to the Pro level to access the tools. The calculator(s) will give you a good idea of how the numbers work regarding refi vs cash. It will also give you descriptions and explanations of what your plugging into and why. This will help a lot with understanding the mechanics and numbers.
If you know how to analyze your market and subject property you can simply plug in your numbers and it will spit out estimates.
Look into what BRRR means via bigger pockets.
If you're going the passive model I would advise either a solo 401k or a IRA of some sort. I can give an introduction if need be to a licensed pro. Just PM me.
My rule, if I can buy and rehab the property low enough while leaving enough room to refi within 3-5 months during rehab phase then I'll buy with cash.
All the best!
The pros to paying cash and then refinancing is speed. You can close faster when you come in with cash. The cons is that you have to wait to get your cash out. Most commercial lenders require your loan to "season" before you can refinance it (6-12 months). Wells Fargo has a commercial loan program specifically for investors where you can immediately do a cash out refinance the day after you close. You can get 70%-80% of the "appraised" value of the property and they fund within 45 days.
So it's all about how quickly you can close with cash versus financing, and your ability to refinance to get your cash back. There are other sources of refinancing other than commercial banks. Private money loves a low LTV and can fund quicker than banks. Commercial banks will also limit the total number of loans a single person can have (10), so are you get larger you then have to use other tools anyways.