All Forum Posts by: Brooks Rembert

@Lindsey Bengue, $850,000 for a $950,000 isn't 20% off. It's barely 10%.

Doesn't sound too good to me on the face of it.

Are you sure the comps support a $950,000 price?

Is it a SFH, multi-family?

Will rent prices support the mortgage?

This doesn't sound like a "deal" so far.

@Bradley Babineaux, welcome!

Good luck in your journey. My #1 piece of advice is to buy something, just to get the ball rolling and learn.

Be smart about it obviously, but don't be one of the lurkers who we see years later who still hasn't bought anything.

Experience is worth it's weight in gold.

@Luis Bermudez, do they need the cash in a lump sum, or would they be amenable to seller financing with a down payment large enough to get them through whatever storm they're weathering?

For example, if they need $50,000 for some expense, you can offer that as a down payment, then provide them a monthly income stream for the balance.

Read @Brandon Turner's book at buying for no or low money down.

Read @David Greene's BRRRR book.

Then go do great things.

@Ferdous Hussain, how much money do you personally have in the property?

One way many good investors make these types of decisions is based on the Return on Investment.

For example, if you paid cash for the home and you make $9,000 a year, your ROI is 4.8% (9,000 / 187,500)

But if you put, say, 20% down or $37,500, then your ROI is 24%.

Big difference.

If the home is really worth $250,000, you can refinace it at a 75% LTV which gives you mortgage of $187,500 and this should mean theoretically you would have $0 in the house so your ROI is infinite, because you make money, yet would have no money in the house at all.

Does that make sense?

It's tough, because the VA has a more rigid home inspection process than a conventional loan.

They are unlikely to lend the money on a home which requires a lot of work.

Now, you could do a VA renovation loan (similar to a 203K loan from FHA), but the home still needs to be pretty livable to begin with.

Then, you'll need to live in the home as your primary residence for at least a year. There are "escape clauses" to this, but you have to show it as your primary residence before they'll guarantee the loan.

OK, those numbers SHOULD work.

If you haven't read up on the BRRRR method, check it out.

If you can link up with a private lender or hard money lender, you could get them money you need to buy and rehab it.

Then rent it out and refinance it in 6-12 months.

Once a mortgage broker sees it is stabilized, you should be able to find someone who will lend you money... even if it's under $50,000.

It just takes a few phone calls to find the right lender.

@Hannah Woods 

Congratulations on starting your journey.

Best of luck. 

@Sam Horton has it right.

If they want the cash flow, pitch it as a chance to keep receiving monthly checks, but without having to be a landlord.

The added bonus to them of seller financing is they don't get hit with a large tax bill this year... it'll be spread out based on the amount of money you pay them each year.

Best of luck.

Hi @Account Closed. Congrats on your journey.

Is the purpose of the purchase to wholesale, flip, buy and hold...?

What you plan to do with it makes a big difference based on the numbers you're talking about.

If it's a flip, $35K with a $50K ARV doesn't seem to good.

For one, I'm 99% certain the home will need more than $5K of work to make it an attractive home to an end user.

But, if you want to buy and hold, it may make sense, depending on what you can get for rental income.

Don't rush into a deal just because the numbers SEEM good. You really need to dig in to get a firm grasp on your final solution.