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All Forum Posts by: Ben V.

Ben V. has started 2 posts and replied 54 times.

Post: House Hack finance Question

Ben V.Posted
  • Real Estate Agent
  • Florida
  • Posts 54
  • Votes 31

I agree with @Reid Chauvin on this one. Would definitely go look at other lenders. 2-3 more actually. You may find they don't support those same rules. 

But in general you can purchase a new 2-4 unit that will be your primary using FHA. It's not a bad idea to consider Conventional either. Always look at all your options.

Cheers!

Post: Question regarding my options

Ben V.Posted
  • Real Estate Agent
  • Florida
  • Posts 54
  • Votes 31
Quote from @Jefferson Harmon:

I bought my first investment property last Dec. My goal was to have the rehab done by May at the latest. Due to the financials I wasn't able to get it on the market until late July. It has been under contract three times. The roof has been the biggest concern for the buyers. My credit score has gone down significantly because I had to put a bunch of the costs on credit cards and have been late with a lot of payments. We originally had the house on the market for $399,000. It is currently listed at $343,900. I am considering a cash out refi but don't know my options with my credit the way it is. I am seeking advice from this community to help me brainstorm ideas. 

Thanks in advance!

Hey Jefferson,

Sorry about your predicament. It sounds like it is bad, but definitely salvageable. 

I would say @Caroline Gerardo's options are pretty good. The best one is probably to just sell. I hate saying that because I love rentals, but in your case you need some cash to pay off other debts. 

Doing a cashout would not really solve your problem as a whole, it sounds like. You'll still have that new, larger payment to make. Plus the appraisal will still need to pass and you mentioned the roof needs to be replaced. Lenders look at the whole picture even on a refi. Unless you get an appraisal waiver, which is a unicorn. 

The DSCR is the same way. That roof may keep you from refinancing depending how bad it is. That's why we say in this profession "You're approved with an acceptable appraisal".

There are however other types of loans that might benefit you. Would need to see the whole picture to help determine what your best option is. 

Hope that helps!

P.S. Do you have a real estate agent? Are they helping you with what to do next?  What is their advice on this whole matter?

Cheers

Post: Looking for suggestions

Ben V.Posted
  • Real Estate Agent
  • Florida
  • Posts 54
  • Votes 31

Grab some equity out. Only pull what you are comfortable paying for by yourself in case things go south. Spend it on real estate. There are turn keys a BRRRR properties out there. If you are experience in renovations then try that.

Cheers!

Post: Getting Prepped for BRRRR!!

Ben V.Posted
  • Real Estate Agent
  • Florida
  • Posts 54
  • Votes 31
Quote from @Scott E.:
Quote from @Ben V.:
Quote from @AJ Satcher:

 AMAZING response! Thank you for this! Theres a lot that can be picked from this... I've been reading a ton and I think my biggest concerns are with the Rehab part. 

The buy is fairly simple to understand to me, the ARV can be somewhat complicated but reasonable enough to understand (basically know your comps).... but when it comes to rehabbing.... quite frankly I have not the slightest on what that entails, how to estimate, etc. I am a software developer with 0 hands on experience with rehabbing or even being remotely involved in one.

Yeah that one is a tough one. I would say the only real way to get expertise is to throw some gloves on and get to work. My first BRRRR I did all the work myself with my brother. We did not use a single contractor for anything. We redid the floors, gutted the bathrooms and replaced toilets, sinks, cabinets and retiled the shower from scratch. We rehabbed the entire home except for the garage which is just a normal garage I guess. But we used Youtube as our teacher. Literally Youtube was our manual. It was fun and now I understand so much more and am ready for another deal! 

That unfortunately is the only real way to learn in this game. Experience!

Cheers!

Ben your other post offered great feedback in this thread so I hate to be critical here but I want to caution the original poster (and anybody else reading for that matter) on DIY projects. Doing a DIY gut renovation on a home when you have no construction background is a horrible plan for a number of reasons. And as much as I love YouTube for learning how to unclog a toilet or how to replace a sprinkler head, it's not a responsible place to learn how to do more complex things like electrical work, plumbing work, structural work, etc.

The reasons I always advise people not to DIY their major construction projects are:

1. If you are a DIY homeowner you are probably not licensed, bonded, and insured.

2. There are injury risks that come with remodeling a home that a DIY person may be unaware of (asbestos, mold, lead based paint, using power tools properly, etc)

3. It is going to take you WAY longer to complete the job than a licensed contractor who is trained to do the work (time is money)

4. Your DIY finished product is guaranteed to not be the same quality as a licensed contractor who is trained to do the work

5. As a DIY person you're probably not in tune with local building codes. And the YouTube videos you're watching probably aren't either.

6. After you BUY-DIYREHAB-RENT... what happens when that tenant you rent to gets injured on your property as a result of your shoddy, DIY, YouTube taught work?

Hopefully this doesn't come across as too harsh. But I really don't want anybody to expose themselves to this unecessary and easily unavoidable risk. 

In summary - Hire a professional, licensed contractor to do your remodels. Don't DIY big jobs.


 Hey Scott,

Thanks for the feedback on my reply. I guess I would agree with you about the cautionary thought processes you have when it comes to a DIY gut renovation on a home when you have no construction background. However I wouldn't say it is a horrible idea, instead perhaps I could agree more that it could be unwise at the very least. 

Perhaps just to be the devil's advocate I could respond to your points, but hopefully you wont take it as disrespect or that I'm arguing with you. Just one professional to another to help the OP. 

1. I agree with you

2. This is a true statement, but there are risks with anything you do in life. Taking unnecessary risks is a bad thing, but educating yourself on homes and construction can mitigate these. Not everything is dangerous in a home. 

3. This is also true, however if you don't have the money to hire contractors (which I never had cause that will cost thousands) you'll need to take a loan out or find a way to pay them. This increases the DEBT hole that you are already in. Very risky especially if you spend too much and don't get a return on it. Plus if you are just starting out, your time is essentially worthless, meaning you can spend a lot of time working on your home and it not eat into your return as much hiring a contractor for thousands. I would challenge you to see how much contractors cost for a kitchen remodel, bathroom, living room, porch, and bedrooms. It's thousands....

 4. This is somewhat true...Not every licensed contractor is cut from the same cloth. They may not see a project through all the way, or perhaps deem something "complete" and you disagree and who's to say who's right? Contractors unfortunately can sometimes have a bad name to them...namely "Dishonest" as some just don't complete the work and can run off with your money. If you don't believe me search the forums for horror stories of contractors doing that very thing. 

5. This is absolutely true. But that never scared me from DIYing. I guess in my story we really didn't do any MASSIVE remodeling like removing a wall or adding a bathroom. Those types of projects typically require certain codes to be followed. But nothing you can't learn yourself by simply reading. 

6. I suppose you could use this argument for anything...are we as landlords not allowed to replace a ceiling fan? Which is pretty easy by the way...or an electrical outlet? Or perhaps another easy one would be a simple light switch? My point is not every project requires a professional. 


In summary, I could get behind Scott's thesis of "Don't DIY big jobs". But I would also add to that... Figure out what a big job is before hiring a professional. Replacing carpet with Vinyl Plank Click flooring seems like a BIG job, but in reality once you start placing those planks down and you've done your measurements it's really not that difficult...but it is big cause it's going to take you a while. 


Correction
!
- I realized I failed to mention I did use a contactor to replace the roof later on down the road. So yes, I do believe in using contractors when the work is out of my league. 

Cheers!

Post: Can I use a virtual address when setting up a business?

Ben V.Posted
  • Real Estate Agent
  • Florida
  • Posts 54
  • Votes 31

Trying to start a business. 

I am trying to use a virtual address but the problem is when I got to create the address I must notarize it saying that it is apart of the business. However I have not made the business yet because I do not want to use my home address for the business. So, I guess my question is how I can I create a business (LLC) in the state of Florida with a virtual address never using my own address?

Thank you, BP Friends!

Post: Newbie Searching for Accountability

Ben V.Posted
  • Real Estate Agent
  • Florida
  • Posts 54
  • Votes 31
Quote from @Alex Booth:
Quote from @Matthew DeMichele:

Hey dude! I'm in the same exact boat as you just starting out. Would definitely be down for a weekly/monthly zoom call. Maybe we can get everyone who responded to this thread into a newbie accountability group! Definitely free to reach out for my contact info.


 Add me to that. I am new to investing and currently on the hunt for the 1st house. Being a loan officer I always kept my eye on the real estate industry. 

1st post :P


 Hit me up please! Would love to connect. I'm a mortgage officer on my third deal. Anything I can help with I will. 

Cheers!

Post: New to the group and looking for some first steps advice.

Ben V.Posted
  • Real Estate Agent
  • Florida
  • Posts 54
  • Votes 31

Welcome Aaron,

What a great question! I would totally agree with @John Clevenger with all he said. I would like to add that learning the financing aspect of things is also going to help you. What programs will work for you. First time homebuyers that use their property as a primary home can take advantage of low down payment anywhere from 3-5%. If you end up buying a home that is an investment you'll typically need 20% down. 

20K is definitely a good start! Depending on the home you purchase and what you are trying to do you could purchase pretty quick. There are ways to help with your funds also. Seller credits are a great way to help with the purchase. That is where the seller agrees to pay a certain percentage of the purchase price towards your closing costs. I negotiated seller credits on both of my last deals resulting in about 15K in savings. 

Getting your RE license is always a great idea. But it does cost time and money. Will it produce the outcome you need? I don't know for your situation. I am currently studying to take mine. So I will be a licensed mortgage officer and real estate agent. For what I am doing it fits, but not for everyone. 

Keep asking questions! 

Cheers! :) 

Post: They’ve been squatting for SEVEN years!!!

Ben V.Posted
  • Real Estate Agent
  • Florida
  • Posts 54
  • Votes 31

7 years and the house isn't in shambles??? Wow... I'm more here to follow this thread so I too can find out what options you have are. 

But really that place must be disgusting. Or at least that is the perception I have of squatters. 

Post: Entry Level Investing

Ben V.Posted
  • Real Estate Agent
  • Florida
  • Posts 54
  • Votes 31
Quote from @Elijah Robinson:

Without a FHA Loan or any type of assistance how much capital should I have before investing through house hacking?


 I mean without any assistance you mean like a loan? You'll need to purchase the home with cash. 

Post: Can I turn a hard money loan into a traditional loan?

Ben V.Posted
  • Real Estate Agent
  • Florida
  • Posts 54
  • Votes 31
Quote from @Leanne Sorg:

I am rehabbing and flipping a property in Chicago 3br/3ba. I took out a hard money loan on the project but unfortunately the house needs alot more work than I originally intended and I don't think I'll make a reasonable profit by selling it. I'm not happy with some of the contractors work. Can I convert my hard money loan into a traditional loan with a mortgage company so I can try to turn it into a rental instead? Do most hard company officers frown upon this?


 Hey Leanne,

Yeah you can refi into a more manageable loan. Consider first that it also comes with closing costs.  

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