All Forum Posts by: Aaron Litzenberg

This is great feedback to hear!

I feel like I am in the same situation and had the exact same idea!  Glad to hear that I wasn't way off in left field.  Thanks everyone for the feedback and @Saar Kagan for posting the question.

General question for the BP community.

I'm curious about the implications of refinancing a property to pull out equity. If you were to refinance to pull equity out of a rental (think BRRRR), wouldn't that increase PITI and negatively impact cash flow? Is that something that is usually taken into account when analyzing such deals? Presumably if a long term refi is taken out, it will impact the cash flow for quite some time.

Am I missing something simple?

Great, thank you, @Sean Blomquist, I will do that!

Hello @Sean Blomquist, I don't have anything under contract.  Just looking to get some idea on qualification and to build a relationship with a lender.  In general, I think I'll be looking for a flip within the metro area.

Hello, BP!

New investor here looking to start speaking with some lenders about qualifying.

Wondering if anyone here would be willing to offer up any recommendations for portfolio lenders around the Twin Cities in Minnesota?

Thanks in advance!

Thank you, @Jay Hinrichs and @Christina Yoon. It seems as though I should participate in a couple REIA meets and expand my network.

Would you say this is simply the "best" way to go about funding for me?  Or, is this the only form I should pursue as a beginner?

Thanks!

Hello, BP!

My partner and I are researching and putting together plans to become REIs.  I think our plan will be to start by doing a couple of flips to build capital and then incorporate rentals to build wealth.

Our initial funding "problem" is that we both have families, primary residences, and minimal cash.  We are wondering if we could ask the BP community for ideas and advice on securing purchase, rehab, and misc funds.

We were thinking of establishing an LLC, but I think we'll postpone that until we have some working capital to avoid additional credit issues.

I believe we both have 750+ credit scores, modest 401k/403bs, and modest home equity. Since living in the property is almost certainly out of the question, I believe FHA and 203ks are off the table.

Would the best plan be to go after a traditional mortgage as co-applicants for the purchase and then HML/private/other form of credit for rehab costs? I don't know if we'd be able to avoid PMI, but hopefully we could plan around that cutting too deeply into margins.

Thanks in advance!!

Ugghh! That definitely is entering the danger zone.  It can be hard to have any idea what the weather is going to do anywhere from late October to early January around here.  Those first flakes would certainly have made my stomach turn into knots after putting that much into the landscape.

@Chad Nagel, that is an awesome idea!

Thank you, @J Scott and @Chad Nagel.  It seems that at the least there will need to be a little more thought put into timelines, holding costs, and maybe a "business trip" to warmer climes :)

Thanks for sharing your experiences, @J Scott!

Sounds like I should definitely factor in more hold time and keep an eye on the exterior work.

I imagine you can put off landscaping and curb appeal though ;)

Thanks, @Jon H. and @Mike Hanneman!

This path is intriguing because it could remove the need to make all the "design" decisions and reduce work time (albeit minimally, and could be offset by longer hold times).

It could appeal to flippers that could know that all the "hard" work has already been done, assuming there's still enough value in the property.  And, assuming this is a sizable market, could appeal to homebuyers that had the time and possibly cash to "make it their own".

That being said, to @Mike Hanneman's point, it would probably remove the "traditional" home buyer market.

I guess there are a lot of assumptions to be made for this to be a successful strategy, but in the right place and time it must have it's merits.