All Forum Posts by: Aaron Cullen

David Zheng wow nice deal! Fantastic BRRRR If you have time to post a little more about the deal would love to here more details. Congrats!

I use a HML for almost all of my deals. After doing a couple of deals they brought down my interest rate from 12% to 10% with 2pts at closing. I put the deals in my own name if it's a buy and hold as I will be doing a cash out refi in 6mo to a conventional 30 yr at 4.5%. At that point you have the option to put it into your LLC. There are lots and lots of posts on this subject alone. Depending on your investment strategy, the most likely reason you will get a HML is because the property will not qualify for a conventional loan. It's too far neglected/ dilapidated to be habitable. There is also the benefit as others have stated of being able to close very quickly. I would only use a HML if I had 30% of the purchase+rehab in cash or some kind of liquid access like a HELOC. Not only does that give you some equity if you're contributing to the deal but Also that way you can keep paying the loan off if the project went south and it took you awhile to exit the property. A HML is nothing to be afraid of, just another great tool in the belt. Good luck!

Way to be proactive and persistent. You're doing some great things!

@Lee S. Great tip. I don't know why I didn't think of that... Do you ever have any trouble coordinating the refi with the bank to land right after the 6mo? They are good with starting the process before hand?

@Brent Coombs 

I haven't been doing this for long but I would have to agree that you DON'T have to get 100% of your money back for it to be a BRRRR. That is the goal to keep as much of your money in play over and over but not necessary if you can replace that money with income wether from a job or your saved cash flow. It might still be a good deal to that investor if the other numbers work. @Brandon Turner has mentioned many times in the BP podcasts and in his books that not all of the money needs to 100% come out if the numbers work for the investor. I've heard a lot of new investors fixated on getting a 100% money back BRRRR deal for their first deal and they complain they can't find one. I know there are a lot of factors in play like what market they are in but I don't think that should stop them from trying to BRRRR. On my first couple BRRRR deals I still had some of my own money in them, but as I got better and learned more about rehabbing, the best kinds of target properties, and the process in general my deals got better and better. 

Oh I'm in the lower bracket of property prices and my lenders will still do 50k min. loans. When I called around last some were 75k and some were 50k.

Looks like a great property, if I wasn't already in the middle of a flip I would be all over it!

Hi Jack, What were the improvements/updates you made? Any mechanicals updated? Thanks!

I second what Mike says. It's ok to have some money still in the deal. Especially if you can replace that money with your own income. How much is your call, just make sure there is some equity in the deal incase you need to sell quickly for some unforeseen reason. Always try to leave your self with multiple exit strategies. 

@Lisette S. My first deal borrowing hard money I paid 2points and 12% annum for a period up to 12 months with no prepayment penalty (but a 3month guaranty) After I did a couple deals they lowered it to 10%. I also refi out to conventional loans and I got pre-approved by a bank before the purchase to make sure I had my exit strategy in place. 

Most of my purchases in Indy are duplexes, if you give me an intersection I could give you some feedback about the area if you need it. 

Good Luck!

Curtis H. Hi, I'm curious what neighborhood are you in? I'm in a similar situation that you were in except I'm in the apartment faze. Great ingenuity to find a house hack in LA! Not easy to do.