All Forum Posts by: Cameron Rockwell

@Naquan Kornegay I typically would only look to small local banks once you get into that 5-10 unit range. They are a lot more flexible to work with you, as big banks try to shy away from mortgages 5-10. I would get a list from an agent in your area and just start calling I'm sure one would be willing to refinance. Just make sure you get a letter from them saying that they will refinance I have heard a lot of stories where people can't get the refinance portion of the home done and they need to wait until the tenants lease is up before they can sell. Another good strategy is to just put it in your spouses name as she can have up to ten loans as well. I know you mentioned an LLC so I don't know what your asset protection looks like but you can speak with your attorney about scaling and see what strategies you can utilize to scale and protect yourself at the same time. Feel free to reach out to me if you have any questions. Best of Luck!

@Haider Abdullah Hard money can be a great tool to scale but usually requires a lot more due diligence on your end to limit the risk the HML is taking. This usually involves a CMA, a detailed rehab budget, a ratified contract, and a deal with less than 70% LTV already in hand before going to a HML. I'd say a common rate is 10-15% with 2-4 points depending on your area. Usually HML will allow you to refinance after as long as you have a letter from a bank saying that they are willing to refinance to you after the deal is done. Todays economy may have made that more strict so I would call a few and see what their requirements are. Some HML will do interest only payments monthly until the house is sold while some just want the lump sum at the end of the deal. I would recommend calling HMLs in your area and seeing what terms work best for your growth. Although, it sounds like you have a very good thing going with private money. I would say if you can secure more private money I would look into just using that as it is usually more forgiving and leaves you more profit. If you have any other questions feel free to reach out.

@Edwin Valdovinos Honestly I don't think it matters how much he is doing. The way I see it is the one with the deal has all the leverage. I think that is the most important skill for an investor is to find deals. I have structured multiple partnerships where I find the deals and they fund the project. Everything is split 50/50. As long as you are both making money who really cares. Although it is important to evaluate how effective both of you are being it is bad for a partnership to start thinking they are bringing more to the table then the other. If you are really concerned with him not pulling his weight talk to him and see if it is something you can resolve. If not you are in this together and you both want each other to be successful so communicate and go make more money.  

@Kyle Martinez I would consider looking at private money instead. Hard money is more short term and doesn't really take income gains into consideration. They only really look at forced equity/value. I'm sure there are tons of private money lenders that would be willing to lend on a deal with that kind of cashflow. If you can't find a private money lender to fund the whole deal maybe just talk to the bank about putting more money down and see if they raise there pre-approval number. This way you can just have a private money lender fund the down payment and that should leave you with tons of cash-flow left over. However, make sure your deal analysis is sound as a private money lender will want to see how you budgeted for everything. Hope this helps and if you have any other questions let me know.

@Steve K.

Great post!!! Glad to see people really putting effort into helping new people!

@Ricky Chau

With the market today I am not surprised that some lenders are becoming more strict with their qualifying criteria. It could be that your DTI is too high or you just don't qualify with their stricter criteria. I have just recently qualified for an investment property with a 25% down payment so they are definitely out there. I assume they are just harder to find due to this whole COVID thing. However, if you are unable to qualify just ask them why you don't qualify and I'm sure they would be willing to help you. This can give you a strategy to move forward with. If you have any other questions feel free to inbox me.

@Ricky Chau

The goal with hard money is to add value and therefore add equity. If you find a house and can add more value by repairing it than that would be adding equity, as long as the repair costs are not more than the added equity/value. The strategy you are referring to is called the BRRRR strategy. There is tons of info on it that you can research to figure out how it works but to answer your question here is a scenario.

Lets say I have a house I want to buy for $100,000 dollars but the house is going to require $50,000 worth of repairs. Talking to an agent and running comps in the area I have determined that totally fixed up I can estimate the sale price to be 200,000 dollars. That means that I can profit $50,000 dollars from the house selling at the After repair value(ARV). Now with the refinance piece of it instead of selling the property I can take that property to a bank and say that I want to do a 30 year fixed mortgage on the property. Let's say the house appraises for $200,000. That would mean in theory I would make 50,000 right? Nope, the bank usually requires a 25% down payment on that property so in that case you would only be able to receive $150,000 of your initial investment. Now you can rent the property out all while putting $50,000 worth of equity in the home. This however is very inaccurate as there are other expenses such as closing costs, Hard money lender fees, and other holding costs you need to account for. This should give you the basic idea of how powerful a BRRRR really is. I do caution you to do a lot more research and have a solid team in place (agent, contractor, attorney, etc.) before reaching out to any hard money lenders. Hope this helps.

@Karma Will

Condos are tricky. I would do some detailed analysis and make sure the property can actually cash flow at market value. Try not to get too emotionally attached as a landlord. Make sure you are accounting for HOA as that is a big expense. I wouldn't recommend condos to newer investors unless you have done a lot of research on what you need to budget for. Im also sure half the forum would not advise you to purchase a unit with a tenant in place but that is up to you to research. As @Moises R Cosme stated hard money loans shouldn't be used for turnkey properties only for when you can add equity to the deal. Considering you are purchasing at market value I don't see a way you could cashflow with a hard money loan. If you need more help with research and where to find things let me know and id be happy to help. 

@Tushar Mukhija

@Tushar Mukhija

Attached is a thread that has helped a lot of people. Hope it can help you. 

Good Morning @Roy Aharonovich

I would see if the seller is willing to do seller financing and then you can just use your money for a down payment. Hard money isn't really an option unless you are adding enough equity to fund the high interest rate. Hope this helps.