All Forum Posts by: Adam Avinger

Are there HMLs who would loan 80% of ARV for a flip property? For instance. If I had a home that I can get for 100k and after my Rehab it should Retail for 200k. Is there a HML who would loan me 160k?

@Brandon Sturgill @John Leavelle 

Okay so, the ARV comes from an appraiser whom was sent out by eApprasial services, with a "planned renovation" or Scope of Work sheet. The Bank my wife and I went to required this service to be performed because the mortgage product they offered was "80% of the ARV of the home". So for instance if the purchase price of the home was 120k the rehab costs 25k, and after the rehab the appraiser says it'll retail for 215k. which means our total loan value that we can use for purchase and rehab is 80% of 215k, which is 172k. At the end of the ballon, we can either sell (which would be great) or restructure to a 20yr am with a 5/2 ARM at 4.75%. or a 20yr am at fixed 5.25%.

Cash flow wise, i can certainly 1% rule this home, due to the fact that rent in the homes area is typically about 1.00 sqft. so just the house alone i can rent for 1800/mo and the apartment is 600sqft so thats another 600/mo. So monthly gross cash flow is 2400/mo on a house we will have 65k of equity in, without having to put any of our own money in the deal.... which sort of impressed me.

70LTV figure came from an estimate, because thats what ive seen all of these forums on cash out refi. After I talked to my bank yesterday afternoon, they actually offer 80% LTV based on the appraised value.

I was just looking at what the majority of people would do if they were in my situation where i was thinking I would only be offered 70% LTV on a cash out refi, rather than 80%. which is much different story.

Considering I restructure to cash-out at 80%, with an all in loan value at this point being ~145k, I would be able to pull approx 27k from it, to leverage my next deal.

But if it was 70% LTV for a cash out, id only be looking to pull 5500 out, which would get eaten up in closing and restructuring fees.

Thanks for checking to see if you can help... I do need some advice. First a little bit about where I am at.

1 week ago, my wife and I closed on our first BRRRR property. We bought a SFR that also has a detached garage with 600sqft apartment above it. We got into the property for 120k including closing, and loan fees. The structure of the closing is a 6month, interest only, balloon. Which means in 6 months we owe the entire nut of the loan. The 6mo balloon, also came with some extra cash to do the renovation. The way it was pitched was that we, the buyers, would get up to 80% of the ARV of the home, so that we could buy and flip, or buy and restructure to hold. We had the appraisal done and it came back back with an ARV of 215,000. Our estimated rehab costs are about 24,850. putting us at 144,850 on our loan.

70% LTV is 150,500. My question is would you personally just restructure as is for cash flow? or do a cash out refinance? I feel like half of cash out refinance would likely be eaten up in the loan fee's and closings would it not?

Gonna need more info. Mortgage currently on it, or paid off free and clear? Property type SFH, Duplex? Condition? Rehab required extensive or just lipstick on the pig so to speak?

Okay, I would sincerely appreciate some insight on seasoning periods. Currently, I closed on a SFR which also has a detached 600sqft garage apartment, with a tenant currently in it. I got into the home for 120k, estimated rehab is just under 30k, ARV is 215k. Pretty healthy margins! Don't know yet exactly if im planning on flipping or BRRRR. But, in keeping with safe practices I want to plan my exit strategies so that im not left thinking, "well now what do i do?"

Currently I got into the home with a LOC loan, which gave me 80% of the appraised value after planned renovation. this is a 6mo interest only loan at 4.5%. payment is also only calculated at the current amount I have outstanding.

After I rehab, I will be listing to both RENT, and SELL the property at the same time. If i get a buyer who offers asking price, or close to it, I will sell. If not, I have time to screen for tenants i want, rather than need.

Should I end up RENTING, I would like to certainly restructure my LOC to either a 5/2 ARM or a 20yr amortized rate, and pull my remaining equity from the home up to 75% of the ARV, which looks to be about 15k. <---- not an awesome #, but ill still have 25% equity in the home, NET rental income at around 1.1% of my all in investment.

So my question is this. I keep seeing people saying that they are going to wait until the seasoning period ends, and then pull their equity out of the home. Can someone explain to me what this is about? How this can effect this particular deal im doing. and anything I should likely know about this heading down this path?

Thanks in advance, this community is fantastic!

Adam and Tiffany! 

I've heard a few references to a 1% or 3% rule, and haven't found anything (yet) on the site, detailing what it is, and how I would go about using that metric to size up my investments?

I'm in the middle of my first rehab. For my wife and I, we decided to do a middle of the road venture and contract the subs ourselves. Have them bid on the total job, c material costs, rather than pay a GC to organize them all. If your someone who can organize well, pay attention to details, and manage time, go out on a limb and try to manage the subs. If not, get a GC. But I'd definitely reach out here for locals in your area who can recommend a good GC they've used or currently use... so you don't get ripped off.

Dustin Bowen - nice to meet you, Dustin! And yes absolutely add me to the emailer. I'd love to meet up for the next RE360 event!

Hello everyone! My wife and I just purchased our first investment property. Were very excited about it, and a TON of learning and pre-preparation has gone into this deal. Currently, we got into the home for 120,000 and just had the appraisal come back at 215,000 ARV. Our estimated rehab costs at this point are 25,000. Don't know yet exactly if were going to Buy/Hold or Buy/Flip.

I would love it of some local investors would possibly reach out, and maybe we can get together for some lunch and see how we may be able to help each other with future deals! Im not gonna lie here, i'm definitely still looking to learn things, as new as we are to this. But Id love to help you find some deals, help you with somehow with your current stuff however i can. 

Looking forward to meeting ya!