All Forum Posts by: AJ Wong

Hi Dane,

I’m a OR & CA RE broker with a mortgage license and have been in around mortgages since 2004. You can utilize the equity in the rental as a cash out refi and some lenders will allow you to qualify for both the refi and purchase utilizing just the rental income or proposed rental income schedule without additional supporting documentation. Rates are slightly higher and for both purchase or cash out refinance generally limited to 75% loan to value but great product to expand the portfolio. I’m advising clients with equity and quality investment targets in sight to leverage low rates while they can. I suspect borrowing costs will only continue to rise. 

Investment Info:

Single-family residence fix & flip investment in Coos Bay.

Purchase price: $85,000
Cash invested: $15,000
Sale price: $160,000

Tiny home conversion.

What made you interested in investing in this type of deal?

Recognized an opportunity in underutilized asset.

How did you find this deal and how did you negotiate it?

Located on the MLS and reached out to the listing brokers, one of whom was also the owner.

How did you finance this deal?

Owner financed. 25% down. Fully Amortized. Two year ballon with option to extend an additional year. No prepayment. Applied my RE commissions towards closing costs.

How did you add value to the deal?

Identified. Negotiated. Funded. Designed. Developed. Listed. Sold.

What was the outcome?

$40k out of pocket. 150% return in 5 months.

Lessons learned? Challenges?

Potentially should have refinanced and kept the property long term as short term rental and for additional future development.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Myself.

Investment Info:

Single-family residence other investment in Coos Bay.

Purchase price: $315,000
Cash invested: $50,000
Sale price: $475,000

Property remodel and partial conversion.

What made you interested in investing in this type of deal?

Dream home.

How did you find this deal and how did you negotiate it?

Identified on MLS. Contacted sales broker.

How did you finance this deal?

Conventional financing. 3.375% for 30 years.

How did you add value to the deal?

Identified. Negotiated and planned and executed remodel.

What was the outcome?

Profitable resale.

Lessons learned? Challenges?

Less initial investment and minor remodeling for long term rental would have been a better use of resources and time management. Building in a rural environment is difficult in cost and reliable labor.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Myself..

Investment Info:

Single-family residence fix & flip investment in Coos Bay.

Purchase price: $85,000
Cash invested: $15,000
Sale price: $160,000

Tiny home conversion.

What made you interested in investing in this type of deal?

Seeing what I could produce with minimal investment.

How did you find this deal and how did you negotiate it?

On the MLS. Contacted the sellers broker whom was also the owner and negotiated owner financing.

How did you finance this deal?

Owner financed. 3 year interest only with option to extend 2 years @ 6% interest only ballon.

How did you add value to the deal?

Identified and negotiated terms. Personally and physically converted shed to a tiny home.

What was the outcome?

Substantial profit.

Lessons learned? Challenges?

Buy and hold. Don't buy and flip.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Myself..

Investment Info:

Other other investment.

Purchase price: $95,000
Cash invested: $5,000
Sale price: $160,000

Purchased a double lot vacant property with partial utilities in place. Invested to have the property cleared and more presentable. Physically installed and permitted temporary electrical. Doubled value in less than 1.5 years.

What made you interested in investing in this type of deal?

They're not making any more land.

How did you find this deal and how did you negotiate it?

Identified potentials on the MLS. Called the listing broker. Gained favorable owner terms to minimize upfront cash investment.

How did you finance this deal?

Owner financing. 25% down @ 6% interest only for 3 years.

How did you add value to the deal?

Identified investment. Scheduled and physically prepared property for installation of utilities.

What was the outcome?

400% return on investment.

Lessons learned? Challenges?

Vacant land is hard.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Yes..