Need funding in DFW area

[Raman Saka]

I am at a stage where I have few rentals. For sometime I used HELOC loans and my own money to fund my purchases. But that's slow and limits me to 1-2 purchases every year. I have talked to some Hard money lenders but the interest rate is much higher for these loans. Conventional loan is a hassle because of all the documentation needed for existing rentals. In this situation what's the best way to purchase Duplex's or Triplex's in DFW area with say 30-40% down ? I have a small network and seems like we can find deals where the purchases will be in a good location, will be priced below market and will have instant equity. Also equity should increase after repairs. I am primary looking for long term rentals.

I will really appreciate the insights.

Thanks

[Jeff Cichocki]

@Raman Saka,

There are lenders out there that work with new investors. I know you said that you think HM is expensive, but let me run this scenario by you...

You have limited financial resources. You have a property that needs some rehab work that you want to keep as a rental. And, lender's don't like to lend on rentals that need work.

How do you solve the problem?

You tackle the problem in two steps...

1. Buy the property with a Hard Money or Private Money loan. You can typically get up to 95% of purchase price and 100%. If you don't have the 5% down plus some funds to cover closing costs, you can bring in a partner who does.

2. Get the property rehabbed.

3. Get it rented.

4. Refinance it to either a conventional lender or a non-traditional source that is more flexible than banks. It's up to you. But know that refi rules are way less restrictive than purchase loans are. This is the easy part. Some lenders will even allow cash-out at this time to help you build up your cash reserves.

What I just described is the basic premise of how BRRRR works. There are lots of people doing this all over the country. You just need to find a lender who will work with you to accomplish it.

Good luck!