All Forum Posts by: Austin Jones

Hey BP, 

I'm looking to expand but am being overwhelmed by the amount of work required to keep it all organized.  I had one accountant give a quote that was quite high for a small number of properties, and Quickbooks eliminated their desktop platform.  

Does anyone have any quickbooks alternatives that work for class tracking and or can recommend an accountant (ideally in the San Diego area) that would be able to get us going in the right direction?  

I have 7 doors personally and another 4 with a partner in a two member LLC.

Thanks in advance!

-Austin

Hi BP Community!  I'm feeling comfortable with the single-family rentals now and am looking to expand into the multi-family market.  If I am to go over 4 units, I obviously need commercial financing.  This question is for anyone out there with experience in this market.  

If I don't have enough cash on hand for the down payment of the larger deals, how have you structured financing the down payment?  

I've had some suggest that the commercial lenders don't care where it comes from as long as the property valuation comes in fine. In discussing with one lender, he said it needs to be the "borrower" that supplies the cash at closing or that I could form an LLC or corporation partnering with the one funding the deal and then the LLC or Corporation would be purchasing the property and be on the loan.

I know this question must seem rudimentary for those that have gone through this before, but I just want to ensure I know how I should be structuring these deals prior to presenting them to potential partners. 

Thanks in advance!

-Austin

@Randy G.

If you are selling the house, make sure you talk to your CPA because you may have to pay Capital Gains. The beauty of the BRRRR is that when you refinance you're not having to pay capital gains tax.
But since you are married now, depending on how your LLC is set up could you just do a quitclaim deed to your wife then have her do a cash-out refinance to pay off the Hard Money? I know I can do a quit claim the other way (going from me to my LLC) without having to specifically "sell" the property.

Please note - this is not legal advice, just passing on things I have learned and heard. 

-Austin

My apologies, I accidentally was on my wife's account (Allison Jones).  That last post was mine. 

 Michael, 

Who do you use for processing your cash-out refinances?  A local bank or one of the bigger nationwide investor specific lenders? 

Derek,

These are loans you supply to a client during the renovation process? At the current point in time, I have been saving up enough cash for the purchase and the renovation to allow me to purchase distressed properties that a standard lender may not approve.  At what point would I be able to obtain your "bridge" loan?

What everyone is saying about the bank not caring about where the initial purchase money came from makes sense, I just need to clarify that with my lender. 

Jason, 

Could you explain more on what "Cross Collateralize" is referring to?  

I haven't had the issue with the 6 month seasoning requirement as I usually group my renovation costs in with the initial purchase price in my closing and add that money to the escrow account. That allows me to cash out refinance up to 75% LTV (using newly appraised value) as long as it doesn't go over the initial amount spent on the purchase (including renovation budget) shown on the closing documents no seasoning required.

My apologies if I completely misinterpreted what you have said.  I am just getting my feet wet with commercial loans and anything other than conventional financing. 

@Gayle Melnick , 

By Partial BRRRR I mean I didn't get all my money back out of the deal. But to me, leaving $3,000 in a deal that appraised for $97k and rents for $920 is a huge win in my book! I'm trying to change my mindset that I'd rather do a "good deal" and move forward rather than wait for that "golden egg" opportunity and never make a move.

Hi Mann, 

I had the same issue.  I am based in SD and have no way to invest locally (easily anyway).  I did a significant amount of research and landed on the Memphis TN market.  I started using a reputable turnkey company to get my feet wet (78k property that rented for $800) and while it was not a gold mine, it was a great starting point.  Also, I used conventional financing with that one, so I was out of pocket about $23,000 all said and done on that property.  Now I have started to work with other teams to find properties and do "partial BRRRRs" as I call them.  I don't get all my money back out, but they make more sense than Turnkey.

Back to where to invest, I ended up setting up multiple meetings with turnkey companies and realtors in Memphis and Little Rock and actually went there in person to become more familiar with the areas.  That was very helpful for me - lots of people I ended liking and a few I realized I would never want to work with. 

Good luck!

-Austin

I've just completed the renovation on my 4th BRRRR Property and we placed a tenant in the property last week - it is my 6th property.

The issue I have is that I only have enough capital to do one deal at a time.  One reason I have avoided Hard Money is that when refinancing my property to pull my cash out and go the next one, my lender has always asked for verification of funds used to purchase the home originally.  Will using Hard Money cause any issues there?  Does anyone have experience with this when not waiting the 6 month seasoning period?

Thank you in advance!

Austin Jones