Real Estate Broker · 3412 S. Harlem Avenue Riverside, IL 60546 · Member since 2015 · 6k+ posts · 5k+ votes
7y
@Joao Cappellano I recently purchased a six unit apartment building from a wholesaler in Cicero, IL. I bought it with hard money and a HELOC, so technically I won't have any money in the deal once I refinance it!
John Warren thank you for your reply! Congratulations on your recent 6 unit purchase! I found bigger pockets a year ago absolutely love it! I haven't done any deals yet, I've been listening, learning and scared to take action. I think a lot of my fear comes from not having money and my inexperience. I had a new addition to my family last September, he is the biggest blessing! However My wife and I have not been able to save money like we used to. We also don't have the equity on our property to do a HELOC. I've learned so much listening to the podcast and webinars and should have no excuses for not getting started. If a deal is GREAT then I should not have problems finding a lender or the funds through a partnership. I've been studying my market in Ocala FL and it's hot! Just missed out on a property this weekend. I set up appointment to go see it, was told that it was already under contract, just hit the market last week. I found a few listed for sale by owner, one is a triplex that should cashflow very well even at the current sale price, however I'm not sure how much value can be added to the property based on what the current owner said. The current owner lives in south Florida I'm getting in touch with him again this week to see it. The issue is, it may not be a property that can be Refinanced to pay back an initial down payment loan, doesn't seem to be in enough distress to get at a lower price and then add value to it. I'll know more later in the week. Do you follow the 70% rule on properties you go after so that you can BRRRR them? What is your typical criteria? Thanks again!
Real Estate Broker · 3412 S. Harlem Avenue Riverside, IL 60546 · Member since 2015 · 6k+ posts · 5k+ votes
7y
@Joao Cappellano my deal criteria is mostly based on around my COC returns and the IRR of the project. This particular deal was right around 70% of the ARV, so I guess I did sort of follow that one! I typically have not gotten that good of a deal though. Those are hard to come by, and I would focus more on acquiring a good quality property that cash flows and that is in a good area.
Investor · Ocala, FL · Member since 2016 · 299 posts · 110 votes
7y
I just sold one SFH in Ocala (cash) and am in the middle of getting 2 others ready to sell. One was a rental for several years and the other was an ugly house in a good neighborhood that needed about $30,000 in repairs and upgrades. So far, I have had neighbors and people driving past stop and ask my guys if they are for sale or rent, so the market is pretty hot now and renters are online begging for SFH's, especially if you accept pets. You just have to jump on any bargain as soon as you hear about it. I have even used credit card checks to get funds (they charge 3 - 4% fee for 12 - 18 months of 0% interest) and buy supplies at Lowes and Home Depot when they are running 0% financing promos. One of my subcontractors told me he has people who lend money to investors, but they charge higher interest than I am willing to pay.
Real Estate Investor · Burlington, VT · Member since 2010 · 2k+ posts · 1k+ votes
7y
@Joao Cappellano One of my first deals was owner financing on a $80k house that needed rehab. I put down 10% ($8k) and had about $2k in closing costs.
For the rehab I used some credit cards, and it's a small town and I was able to convince some of the contractors to wait 30-60 days for full payment. I refinanced after the rehab, paid off the original seller, all the contractors and credit cards, and still walked with about $30k in profit.
@Marelyn Valdes I've seen a lot of people posting on craigslist and Facebook! My wife and I have been discussing the use of a cash advance but need to look some more into it? have you purchased a property this way, or are you using it as a down payment or mostly just for rehab cost? Thank you for your feedback!
I could always use the cash advance as a down payment to get owner financed like @Tom S. mentioned. Then use anything remaining on cash advance or additional credit cards for a rehab, then refinance and pay everyone back! Thank you guys! Loving the feedback!
Real Estate Broker · 3412 S. Harlem Avenue Riverside, IL 60546 · Member since 2015 · 6k+ posts · 5k+ votes
7y
@Joao Cappellano IRR is an important number as well, although it involves some educated guess work about what you can sell or refinance for in 3, 4 or 5 years. I don't think it is important to get the IRR "right". Just the excercise of considering it will help you make good decisions. I am sure no property pencils out exactly like we underwrite.
Investor · Ocala, FL · Member since 2016 · 299 posts · 110 votes
7y
@Joao Cappellano , I have never been to a cash advance - they charge horrible rates of interest. If you can find owner financing, make sure to have a real estate attorney go over the paperwork before you sign anything. Get Lowe's and Home Depot cards and try to buy when they are running promo financing and buy supplies (like paint at Lowe's for the 4th has a $45 rebate on 5 gal. and they are running 12 and 18 month financing. Kitchen cabinets are 25% off, too). I am the queen of oops paint for rentals if it's a neutral color ($30 for 5 gal, at Lowes). I used my home equity to buy several homes for cash. I don't have verifiable income since I make most of it from rentals, which makes it hard for me to get hard money financing. If you do buy and decide to flip, I would NEVER do owner financing in Florida. It is a long and expensive process to repo a house. I also bought a couple of mobile homes to fix and rent, so you might look into one if you find a real bargain (on land - not in a park).
@Joao Cappellano , I have never been to a cash advance - they charge horrible rates of interest. If you can find owner financing, make sure to have a real estate attorney go over the paperwork before you sign anything. Get Lowe's and Home Depot cards and try to buy when they are running promo financing and buy supplies (like paint at Lowe's for the 4th has a $45 rebate on 5 gal. and they are running 12 and 18 month financing. Kitchen cabinets are 25% off, too). I am the queen of oops paint for rentals if it's a neutral color ($30 for 5 gal, at Lowes). I used my home equity to buy several homes for cash. I don't have verifiable income since I make most of it from rentals, which makes it hard for me to get hard money financing. If you do buy and decide to flip, I would NEVER do owner financing in Florida. It is a long and expensive process to repo a house. I also bought a couple of mobile homes to fix and rent, so you might look into one if you find a real bargain (on land - not in a park).
Marelyn, good ideas. Don't understand your difficulty finding Hard Money though. HMLs generally look at the property asset and probably your credit score and experience. Not income verification. In fact one of the reasons Hard Money Lending has boomed is because we don't have this requirement that conventional lenders do.