All Forum Posts by: Brandon Croucier

Ridiculous, he would've cleared more money & TIME just accepting the $15k credit at a $210k PP.

Unfortunately I can say I've dealt with many situations similar ...

One that comes to mind is when I Worked with a builder to refi out of debt for 3 months after a property wouldn't sell for 9 months... Docs are out and closing is in 1 day and I get a call.

"we got an offer for the property today so we're not going to move forward on the refinance" he later mentioned as mortgage brokers we "do nothing" 

At the end of the day, some people just don't respect others and have no idea the amount of work it takes to make these deals happen..

Honestly on 23,000 a personal loan at 11% is a pretty solid deal.

Sell & cut your losses or just hold the land until you can sell for over your breakeven . Do not throw more money in a sinking deal.

Hi Jacob,

Ultimately this is a decision you need to make.

Essentially it comes down to, 

Can you make more money with the equity you pull than what the increased interest will cost you?

It looks like this is a fully amortized 7 year loan meaning, regardless of the interest payments, you are paying the property off at the rate which is similar to an automobile loan. If your goal is building equity, this is great but if its to create cashflow & use the extra income to reinvest this might not be the best loan for you.

Real Estate has appreciated 4-5% per year over the last 30 years, not including cash on cash returns. If you were to use longer term debt, acquire more properties while freeing up cashflow, there is a good probability of increasing returns.

Hi Mitchell,

Given your estimated ARV $250,000 , you will be fine.

You can do a refinance once the property is completed for 75% / $187,500

This will cover the payoff & your closing costs.

Not many people are willing to take that level of risk on leverage, especially in a 2nd position!

You can get up to 80% Cash out on a 1st trust deed, but typically this level of leverage comes with increasing costs & doesn't make much sense to go from 75 to 80 LTV.

Im curious, why would you buy something at an ARV Value prior to it being completed, why not just go find a property on the market where the work is already done?

$7,000 in fees is relatively moderate. 

Most lenders have fixed fees alone of $3,000-$3,500.

Then you have origination fees of 1-3%.

In this case it seems they have fixed fees of about $3,500 with 2% origination.

For a loan of this size this is fair, it takes a lot of work to get a loan funded & you cannot expect someone to work for pennies.

What is the estimated payoff & what will the actual ARV be?
If your credit is solid, the property cashflows you should be able to get up to 80% of the ARV in a rate and term refinance scenario to payoff the debt.

This is a doable deal, just need to work with a broker who knows where to place the loan :)

I may know a guy ;)