All Forum Posts by: Brandon Halley

I am currently attempting to refinancing one of my flips that I have decided to make my primary residence. I originally bought it with private money for 80 and borrowed another 80 for the remodel for a total of 160 + interest. It just appraised at 275.  

Before the purchase I thought that refinancing may be on the horizon so I went into a bank and told them my situation in detail. Including the possibility that I may change title from my business to my name and live in it. They said that if my numbers were as expected there should be no prob. 6 months later. So 6 months later I went in again to say lets move forward and they said I needed to season for an additional 6 months after I changed title. Ouch! I thought we went over this clearly.

So, I start shopping around again. After explaining my situation, the first question to every potential lender was 'Do i need the 6 month seasoning?' I found a highly recommended local guy who said it was no problem. We locked in a rate, got an appraisal, and we are currently about a week from closing. He calls me yesterday and says, turns out we need to wait 6 months after you change title. WTF! But his solution is that we can still refi for the money I owe- just no cash out. Then, is recommending a HELOC for the rest. I dont like this option because the rate I locked is higher because it was supposed to be a cash-out, and I was planning on taking 80% LTV which he said added another 1/8. My plan was to use the cash for a down payment on a rental. So a HELOC I don't believe is not ideal. I am young and my strategy is something like.. borrow as much for as cheap and as long as you can.

So do I blow this guy off and keep shopping? Wait 6 months while paying higher interest and try again? Do the refi for what I owe no cash out and HELOC for the rest? Are there any lenders who actually know what they are talking about? Sick of hearing one thing and getting another.

I totally agree. Maher the narrator sounds whiney! Hard to listen to. He also does not capture the occasional (dry) humor. I listened to the book on rental management read by Brandon Turner and it was way nicer to listen to. In general I much prefer listening to authors read there own books. 

With all that being said my best deals were places that everyone else overlooked for one reason or another. Often requiring due diligence and work most people thought was either too hard or impossible. The more you learn the better equipped you will be to find and solve the problems that can put projects out of reach for most folks. 

Lets say you think that after it is all fixed up a 2/1 w a garage may be worth 180. So pretend you are a buyer and you have 180 to buy a home. What would you buy? Personally I think I would buy one of the condos for sale in town or up florida rd. So maybe to be competitive you would need to go lower... Also what freaks me out about that property is the HOA. It could be fine but just by looking around that place is not well organized and after talking around I have confirmed it. Also, the cistern water tank in the back yard that supplies the whole complex is a huge flag that screams management has a hard time making good decisions.

When you go to get a loan on a SFR one question the lender will ask is some form of, "will this be a residential or commercial loan?" In other words, is this house your residence or a rental? Commercial loans are always going to have a higher interest rate. Currently about 1% higher. On a 100k 30 year mortgage a 1% difference = about 60$/month or 25k over the life of the loan. If you do get a residential loan it is totally fine to rent your extra rooms out as long as you live there as well. But if you don't live there then it is fraud and it is illegal. After you have fulfilled the owner occupancy time requirement (usually 6-12 months) you are then free to keep the residential mortgage, buy a new house with a new residential mortgage, and rent your old one out. If you want to learn more, perhaps call or email your local lender.

The only reason I would see to partner with a GC is if they have skin in the game. AKA the funding of the project is split to some degree. I am a GC myself who does flips, and like most humans, I am driven by incentive. I love to put myself into situations where if I work harder, I make more money. Because for some reason I always end up making more money! 

If you are paying for the whole thing then it may be wise to just hire him and put in the contract that he can get a % profit bonus at the end. 

Another way to do it is for each of you to do your jobs and get paid for your work as normal. Then split the profits the same as the funding. i.e. you both put in 50/50 for the cost of the project. You get paid commissions as usual. He gets paid time and materials, or as bid. Then anything left you split 50/50. 

These are very fly over descriptions so make sure to have a very clear and extensive written agreement in advance and remember... Good paper makes good friends! 

Often times you can fix a door in this case by removing one of the short screws holding the hinge to the jamb and replacing it with a 3" screw. Depending on where it is rubbing you may choose to replace a screw on the top or bottom hinge.

Welcome back to Durango!

I can't really speak into much of this but as a flipper I can be quoted saying 'what I paid for it has nothing to do with what I am selling it for.'

Often times confidently calculating the ARV for me can be a difficult task as well. Although it is getting easier as I keep staying hip to the market. I usually start by talking to the realtors. They are involved in the most transactions and thus have the best experience and feel for prices and trends. I also try and find out how they come up with it. This helps me trust in them and also teaches me what to look for. One thing I usually try and figure out is 'what price would I have to drop this to for a 30 day sale?' Thats my worse case scenario. After I get there advice I usually get a list of all the comps on the market and recently sold. Sometimes I just browse over each one and get a feel. Sometimes I go as far as making a spreadsheet and averaging $/sqft, time on market, make notes on condition, age, amenities etc.