All Forum Posts by: Brady Lamprecht

I'm about 7 days away from closing on my first real estate deal and the thought occurred to me that instead of wasting time (and closing costs) dealing with a bank for the initial loan, I could simply use myself as the source of "private money" for the entire purchase (~40k) for a home that I intend to rehab.

The rehab is expected to take 3-4 weeks and I already have a reputable contractor with a written estimate in hand and the cost will be a ~25k additional (worst case) on top of that. The ARV I expect to get after the rehab is ~70k so while it won't be a "grand slam" deal out the door, it should give me decent cash-flow that I can using to quickly paydown the interest-only HELOC I'll be using for both the purchase and the rehab. The HELOC I have has a maximum of 96k available and I also have other cash saved I can quickly access in case I need to in case things go wrong.

So to get to my question...
I'm trying to establish a good financial history for an LLC that I formed at the beginning of 2018. I'm wondering if I were to purchase it in my name, would it be difficult to get a "cash-out refinance" for (80% loan to value for 56k) that is used in BRRRR strategies and then quit-claim it into this LLC?

I know I'll need to make sure the insurance is adjusted to the LLC after the rehab and deal with any recording fees that take place due to the transfer, but I don't see any other draw backs from doing it this way which will give my company at least a decent start to building a good reputation.

Any thoughts on what I may be missing in my strategy I've explained above?
I'd appreciate anyone's advice on if the I have plans are absolutely horrible or otherwise good.

Thanks in advance.

Very good, thanks Christopher.  I think I'll sign up with them when the time is right after I close on an initial property.

@Wayne Brooks Yeah, I knew I could call the city, I was just hoping for some information and knowledge from other investors on here as the city offices were closed at the time this was asked.

Also, in case anyone else has this question in the future, found the correct name is a "PVA Report" (not PBA) and my agent called and was able to get a copy from the city the following day.

@Christopher Blanco Does Eco-Tax do everything for your business?  I had an initial consultation a few weeks ago as well and was also impressed. However, I just realized that I never inquired if their monthly plans were all inclusive of their services.  I know they mentioned they offer CPA services, tax-strategy and filing, and business formation consulting, but forgot to ask about bookkeeping. Do they do all of that for you for the monthly fee of $50 (or $70 for the "Plan B")?

If they also do bookkeeping for you, can I inquire what accounting system you used before hiring them and was the transition process fairly straightforward and painless? I don't think I'm quite ready to utilize them as I don't have any deals under my belt yet but definitely will in short order.  Once that time comes, I'd like to have my research done.

I'd appreciate feedback you can provide, thanks in advance.

Well, I finally received a very detailed SOW from A contractor (not the one I was referring to originally) and am going to pay him for his work.  I've run the numbers on the deal that I currently investigating and now am crossing my 'T's and dotting my 'I's and about to put an offer in.

The question I have now is, during the due diligence time between going under contract and the actual closing taking place, should I hire an inspector to do essentially the same thing as this contractor has done or not?  I've seen what inspectors do from the purchase of my primary residence 5 years ago and I can't honestly tell a difference between that report and what my contractor just provided.

@Cara Lonsdale From your profile page, you seem to have a lot of experience under your belt in this area so I'm wondering what your opinion is.  I know that the report created for my primary residence had disclaimers that I couldn't come back sue for items he might have overlooked so while the additional cost isn't a lot in the long run, I don't know what the added benefit would be.

I have a contractor asking for something called a "PBA report".  I checked with the few real estate agents I'm working with on this deal, and no one knew what it was either.

When I asked the contractor what it was specifically and to clarify what information he was looking for, he stated that is was "a record from the city about the house".

Being new the REI world, I don't want to sound stupid or anything, but I've search all over the forums here on BP and nothing is showing up.  Perhaps someone could please educate me on my apparent lack of knowledge.

Thanks in advance.

Thanks everyone! I think I'll see if he would be willing to just do a rough estimate for portion of that deposit and then if that is in line with the numbers I need to make the deal work, I'll go ahead and ask him to do a detailed SOW report. 

I appreciate all of the feedback.

Here is a fairly basic question I've got concerning out-of-state investing and I'm looking to get people's opinion concerning hiring a contractor to work on a project with me.

I recently read @David Greene's book on titled "Long-distance Real Estate Investing" and I'm starting to take action on what he suggested.  I found an REO property that is ~100k undervalued that was recently foreclosed on in early December.  An agent in the area I'm researching referred me to a contractor who apparently has a good name (has been working for 30+ years with his ageing father) and from talking with him on the phone, seems to be okay with working within my requirements as an investor.

That being said, there is obviously no trust between us yet and he is hesitant to spend any time on this project without some type of deposit from me beforehand.  I completely understand where he's coming from.

At this point in the game, I'm just looking to get a very basic idea of what needs to be fixed, repaired, and taken into consideration for coming up with an ARV to know whether to move forward of not. He suggested a $500 deposit from me which would then be applied to the work should I decide to proceed.

That sounds reasonable to me but I'm also considering offering him that amount split between two payments as I really have no idea if I can make the numbers work or not and would prefer to not sink too many costs into something that might not work at all.

Suggestions on how to proceed?

Welcome @Brian Kohlsaat, as newcomer myself to BP located in Northern Colorado and fellow (network) engineer, we both have similar desires to put the important things in our lives first, family.

@Bill S. Thanks for the feedback. Yeah, as an engineer by trade, I have a tendency to make things more complex than they need to be because in my world, if you don't have a good foundation to build on, you end up doing a lot of rework, which I'd like to avoid in the REI world.

I understand that I WILL make mistakes (and hopefully learn from them), I'd like to learn where other people had to do re-work and try to avoid that at all costs.

I'll see if I can simplify my plan somewhat. :)