All Forum Posts by: Brandon Sturgill

I am currently completing a live-in rehab on a SFH and looking to complete a concurrent SFH rehab/resale before relocating next year. I have a small bank willing to do a portfolio loan at 80% of purchase, 2 points over prime with a $300 fixed closing cost. The problem is securing the rehab/holding costs... a conventional loan causes the same dilemma, given the down payment. On my planned project I am looking at a need for about $30k for all associated costs outside of the purchase. Is there a decent strategy for completing this goal without using HML...perhaps a HELOC on my main residence? Thanks

And I would be curious to see how the financials would work for the rehab of a 300k home...what type/makeup of financing would you use for the purchase/rehab? Thanks

Thanks for the perspective, Belinda.

Correct. I figured $12k for a fixed rehab budget and an additional $12k for associated costs. Thanks

Thanks for taking the time to respond. And thanks for the education.

I am struggling with the concept of 70% ARV for SFH investing. Is there something more to this? It seems to me a lot of SFH investors are not disclosing the entirety of costs associated with their investment. This is a reasonable example of using the 70% ARV formula where I live and it is a seemingly impossibe way of investing: SFH $60,200 purchase price (70% ARV) ARV $86,000 Fixed Rehab Costs $12,000 Entrance Costs (Closing Costs/Lender Fees) $3,000 Holding Costs $4,000 (150-days) Exist Costs (Realtor Fees/Buyers Closing) $5,000 Total Costs Including Purchase Price $84,200 ARV-Total Costs (Profit) $1,800 With this strategy, I would need to be looking closer to 50% ARV to profit.?

I currently hold a FHA loan on a SFH that was purchased as a 1-year live-in rehab project with the intent to resell (owner occupant requirements). I will be relocating to another city and acquiring another live-in SFH with the same intent at the end of the year (June 2014). I am interested in the purchase of a secondary SFH investment property prior to the move, but struggling to make the numbers work. I have a small bank that will do a portfolio loan for the second investment proeprty at 2 points over prime, 80 percent of appraisal or purchase (whichever is lower), amortized on a 15 year schedule. I can work with a fixed rehab budget, given I can do the majority of the work myself (I would need 12,000 for the rehab). I guess my main issue is covering the rehab/closing/exit costs. Is a HELOC on my main property a reasonable strategy to cover the costs. Is there something better anyone has used in a similar situation.

Does a HELOC have to be paid in full if the property used to secure the credit line is sold?

Agreed...totally. Well said. I have traded perfectly good automobiles for newer shiny ones when I was younger. Man I regret it. My 95 Honda Odyssey will fit a 5-4x8 sheets of plywood without a complaint...and it has been paid for years and years. Car payments are for fools (unless your tenants pay for them.) But that is another discussion. Good luck!

Yancy, if your model is a SFH rehab and resell, the BP store has two books by J Scott. He started on a path 5 or so years ago that I began several months ago. Not pushing the books, but they are very helpful. I read 20 books before reading his and was still confused about so much. His books are tremendously informative. Good luck.