All Forum Posts by: AJ Exner

Hello Olu,

Certainly a lot of decisions to be made at this point. The biggest thing is to look at is the overall cash flow and not just the P&I payment.

Especially in Texas, you will want to look at the property taxes and the insurance costs. With my clients down there I would suggest looking at something in the 2-4 unit space and prepare to put down about 25%-30% with closing costs and everything.

Good luck!

It would be tough to say 'no' to that type of passive income. I think your best bet would be to either take out a HELOC on it and purchase some new properties, or do a c/o refinance on a 30 year note at reduced leverage. By reducing the leverage, that will help get a good term and you can start to rent it out. Even at 50% LTV, you're still looking at a good chunk of change to get started.

@Oleg Sergienko,

Thank you for throwing it out there! My initial thoughts are on the financing side and really on the expected funds. It sounds like the idea is good for more of a SFR, or a 1-4 unit rehab but my concern from a lender's perspective is the needed experience in the more 10+ unit space to give "normal" (80% leverage) on a deal like this.

Setting up something like this in a bridge loan to take on some of the rehab could be the best way to go, but most will want to see some 10+ experience to really get what you are hoping.

Do you have someone with some "experience' in that space who might do a JV?

Thomas,

If you can do a house hack to alleviate some of those liquidity pressures. My thought was more in the Hard Money space on doing a short term bridge loan that gets you a little cash out based on existing equity (or covers closing costs) and then sets up some money in an escrow account to wrap up the rehab that you are doing.

Happy to jump on a phone call if that helps?

Yes and no, some lenders like to add a rehab escrow to "make sure" that the work is going to get done. Do you have someone who could jump on an LLC with you who is a licensed GC or has done a few more flips the last couple of years? I think I've got a lender who could help at 10% but we need to see a couple more flips.

Hey Daniel,

So best case with a hard money bridge with limited experience would be 10%, but they would leverage the After Repair Value and make sure that there are margins with the proposed rehab that would get them some return on their investment. 

If you had a little more equity in the property you are working on there would be some opportunities for HELOC/Cross Collateralization, but as is it will be tough.

I think more realistic would be 85% of purchase on a bridge, but with closing costs it would be closer to ~17%-18% when all is said and done.

Daniel,

I'm sorry to hear about the dilemma. The first question I would have is how close are you to finishing up the one you are working on? A quick refinance into purchase of this property seems to be the most straightforward.

If not, is there any kind of value-add that this property might need? With your credit score and a little experience, that would be the only way I could see you getting 90% LTV on the purchase is by doing a rehab/bridge loan and showing a decent ARV with some work.

That would be tricky with her living in it, but again, the only way I could see getting that kind of leverage.

I hope it works out though.

Good luck!

Hey Nathan,

Just came across this feed, were you able to find an answer for this? I've got a lender that a number of my clients utilize that could help with this. 

Hopefully you have found someone by now, but if not, just let me know!

Hey JP,

Sounds like something that you could Quitclaim Deed over to your LLC? I would confirm with a title company and attorney, but might be a way to do it.

Even at a reduced leverage refinance, it is going to be hard to beat that rate, especially 2.5%!

Hey Alonso,

I've got some great clients doing work up there and a lot of good opportunities for sure. Happy to help where I can!

Are you looking to BRRR at first, or thinking more buy and hold?