All Forum Posts by: Arpan Patel

@Akialah Ansar: What strategy are you looking to start with as far as exit strategy?

-AP

You will need to bring the loan current. Why would a seller sell you a house with equity and no hardship that is being reflected in their home? More than likely, you will need to bring the loan current and you may even have a tax lien or judgement on the home you will need to square. 

-AP

Are you saying you think the repairs are going to be about 5-10k? Not really sure what you are asking for. The down payment of 15% on 30k offer is 4.5k of which you have 5 but you are looking to raise the down of 4.5k and closing costs (maybe 800) and the rest of the 10k you are raising is for repairs? So basically just about 5k for repairs and with 5k of yours in reserve in case something happens? For what you were saying the repairs are (having never seen the property myself) you may be under shooting your rehab number. Why not a 203k loan? To answer your question, what are typical terms of raising money, depends on what you can negotiate. Maybe 9-12% annualized on their money or maybe you partner for x% of the deal. Depends on who you are talking to. We raise only debt partners at 9-12% interest annualized with no piece of the equity but in a 6 month window with a balloon payment in 6 months. Good luck!

-AP

@Tracy Lance: Agreed. Depends on what you can negotiate. Also, if you are looking to do many properties in the area and don't want the home prices to go down, then you could do the value of the home where the seller gives you the difference of the value of the home and loan amount as a credit at close. You'll still some money to bring the loan current of course and you may have an issue getting title insurance on this type of transaction. Be careful on these,

-AP

Partner? Seller Carry Back with a non conventional lender? Hard Money with lower LTV requirements? There are a lot options but if this if one of your first deals, you will more than likely need to put some money in the deal. Have you read the book on No and Low money down? Maybe you will find an answer in there.

-AP

@Jason Hirko: Agreed. Is there a way to sell the house as is and get your money back or some reasonable portion? What state is the house in? Could you Wholetail it? 

-AP

The HELOC sounds like the best options. It is there is you need it and it as low setup and maintenance costs. Only charged on what you use so if you have some major repairs then you have that HELOC to fall back on. I don't think you should just take that 20k right off the table because if nothing happens, you are still paying interest for that 20k. If something does happen, in both scenarios (HELOC and complete refinance) you will have that 20k available.

-AP

Those are pretty standard rates and terms. That is what I am seeing in my market as well. In terms of looking for a better option, there are options if you are willing to pay higher interest. There are lenders I know that will charge about 6.5-7% for a 30 year fixed on income properties. I'd suggest taking your local lender option and within 5 year acquiring say 2M in debt - basically before the first 5 year balloon comes up - on your rentals (20-30 units) and then going to a portfolio lender who would give you 5% but on a 30 year fixed as a blanket loan on every investment property. You typically won't find the most favorable AM on just a few properties. Hope that helps,

-AP

Yes make sure you are getting good title and definitely buy title insurance. Absolves you from issues regarding random liens and such that were missed on the public record. I have used quit claim deeds before to move interest in my properties to corporations with no issue but I knew I had interest and that I was conveying that interest to a corporation. I'd be wary of quit claims when you don't know all the details about both sides of the transaction. But people do it all the time, that's just me.

-AP

It can be done. There was a podcast on that in the low 100's where a lady who just moved to the states from Jamaica with nothing but 40 dollars and a young child and two years later owned multiple houses and few years after that is managing multiple renovations simultaneously.

-AP