All Forum Posts by: Bernie Huckestein

Curtis:

I'd evaluate this for multiple exit strategies typically you would want to keep your options open on every deal and in particular with your first. I would use both the BRRRR calculator as well as the flip calculator. What is the ARV of the property? Has your contractor given you a solid cost for rehab?

It's great that the bank will 100% finance the purchase and rehab but make sure your numbers work for either flip or hold.  This includes accounting for holding cost (mortgage payments, utilities, insurance, etc.) while the site is being rehabbed.

You didn't offer any specifics about the property so I'd be curious about the ARV and Repair / Holding cost.

B

Thank you I have not tried AR FCU but will  --  thanks for the tip

let me know how you make out. 

I've found a local bank who will re-fi a property after 6 months seasoning.  Its a portfolio lender offering 30 year amort with fixed rate or 6.25 (first one I have found offering a 30 year fixed).  The rate is a bit high and is based on 750+ credit but from what I have found so far for a more reasonable rate fixed 30 year loan it has to be one sold to the secondary market --  problem with that is the upfront fees for a secondary market loan a much much higher.  I'm planning to keep the property for 6 or 7 years so I would re-coup this in about 4 years but that takes away from available cash for the next project today.

I've found these secondary market fees for investment property to be fairly standard but appreciate thoughts from others.  Is this standard?  Should I keep looking?

I do have another bank who will do 4.5% 3/1 20 year amort (portfolio) for very low fees so that is an option but if kept for 6 years the rate could jump quite high, I'd rather know the payment amount for the life of ownership.

Do I need to keep looking for a better rate or less upfront secondary market loan or is this standard?

Appreciate thoughts - thanks, b

I assume with a SFR the tenant (or HOA) will cut the grass, pay for garbage things like that, in my area I always plan on paying water in sewer as these can create liens directly against the property but you may have the tenant pay that. If you are putting $40k into the rehab you might be able to back up on the monthly CAP EX

Happy for you @Ramon Cuevas congrats...lots of wasted energy on made up negatives here...I guess if you posted asking for opinions...as they say everybody has one; however, it seems you were merely posting your success story as a thank you to some and encouragement to others  --  good for you Ramon!

James:

I live in Portland Maine and have been eyeing some potential in OOB for Air B & B.  My experience elsewhere is quite good as you are able to evaluate who you want to rent to based on their profile, their inquiry, as well as the feedback from others who have rented to the prospective person(s).  While in my experience the places typically are well cared for and usually quite clean as people leave the challenge is having boots on the ground for consistent turnover...cleaning, re-stocking and items you provide like coffee, snacks, TP, etc.

You should know in OOB you will get a very nice premium during the season but occupants will be people on a beach vacation...better off with a young family than a bunch of college kids.  Not sure how close you are to the beach itself but there is a market for Air B & B during the season the short term rental (as it is furnished) off season...maybe October - May.

I would assume much of the $ and opportunity to book solid for the season will depend on your proximity to the beach that I think will drive if it makes financial sense given the higher degree of hands on.

b

I've called my bank and they have no product to help me (and had no knowledge of what an SDIRA LLC is)...and maybe there is no option but thought I would check with others.

When establishing a checkbook IRA what do people do for the actual checking account...meaning,

If I have 200k that I want access to I understand the steps required to establish this SDIRA but I hate to leave 200k in a checking account and earning nothing or very nearly nothing in investment interest...I will have the 200k sit there until I find the right investment, maybe the investment doesn't use the entire 200k, and/or then there is the money coming back in from rents I don't really want that to sit either.

I do realize that I can buy other investments via this account but what is the best way to do so while still remaining liquid so I can pull the trigger on the right opportunity is there a banking product 

Thanks, b

I've called my bank and they have no product to help me (and had no knowledge of what an SDIRA LLC is)...and maybe there is no option but thought I would check with others.

When establishing a checkbook IRA what do people do for the actual checking account...meaning,

If I have 200k that I want access to I understand the steps required to establish this SDIRA but I hate to leave 200k in a checking account and earning nothing or very nearly nothing in investment interest...I will have the 200k sit there until I find the right investment, maybe the investment doesn't use the entire 200k, and/or then there is the money coming back in from rents I don't really want that to sit either.

I do realize that I can buy other investments via this account but what is the best way to do so while still remaining liquid so I can pull the trigger on the right opportunity?

Thanks, b

I have been trying for 4 days to get an account setup on Listsource, they keep creating a "ticket" for someone to call me back, last time I ask to hold and was on hold for 20 minutes.  Can anyone suggest and alternative organization...this is an unnecessary waste of time.

Thanks, b