All Forum Posts by: Chibuzor Alumba

Hi BP, Sam from Canada here

My question today is: If I find a great BRRRR deal, have contractors very the Rehab costs via quotes, and have a realtor verify the ARV, what are my options for finding a lender to help fund the deal? (I am from Canada and I have no credit in the US)

Would a lender fund 100% of the purchase + rehab costs assuming there is enough equity in the deal?

I have no issues giving a great interest and point payment to a lender as long as I don't lose money after the refinance is complete.

I also have no issue with working hard, finding Pre-foreclosure deals or calling For Sale By Owner properties to get a great deal.

Opinions, Thoughts and Insights are very welcome. Thanks :)

You can also consider doing a Rent To Own. Buy now, put a tenant-buyer in, sell for a higher price later on while making monthly cashflow from the excess rent (the excess amount over the rent helps the tenants save for the future downpayment)

 Hi @Bevla Reeves I do not use Instagram due to the ease to get sidetracked and look at never ending pictures (I have enough distractions in life :p).

That said, if it works for you to find investor friendly realtors, then by all means use it :) 

@Roy N. Hi Roy, thanks for the addition.

The house is around the St James area.

@Sarah Doogle we made poor choices (see the kitchen story).

The real issue is that we need a network of trusted tradespeople.

Everyone we meet is quoting us $2800 to sand and refinish a 600sqft space.

We can pay for a reasonable job at a fair price.

Working on building our network of tradespeople now.

@Frank Geiger the plan is to fix the home fast so we can rent it out ASAP and stop the cash bleed.

The issues:

- I have two full time high paying jobs and little time to work on the home

- My wife is 8 months pregnant (enough said there)

- We do not have enough in savings to just throw money at the problem (see the bad kitchen remodeling decision for reasons why we have no money)

In reality, we’ll keep chipping away at the house until we get to a point where with a month or two months worth of mortgage plus utilities we can hire someone to complete the outstanding work. (Or maybe it’s more cost effective to spend $5,000 and get the house done now?)

So you made All the mistakes. You bought

- Too high

- A 2 bed 600sqft home

- A home that needs lots of work just to be rentable

- A home you lose money on with the rents from a regular tenant

Additionally, due to the above mistakes and not being able to rent the home easily you:

- Were flexible on your tenant selection process

- Rented to a company not an individual (therefore not covered/ protected by the residential tenancy board)

- Had your pipes frozen because the tenants turned off the furnace (Why? Don’t ask me lol)

- Had insurance refuse to pay for damages because you got a specific case coverage not all All incident coverage

- Have a wife who is 8 months pregnant

In summary, everything that can go wrong has gone wrong.

What do you do next?

Here is What NOT to do:

- Do not spend all of your savings fixing up the okay kitchen when you have not fixed the pipes, replaced the destroyed carpet, and taken out the wet wood panels all because (we are doing renovations anyway)

- And do not run around aimlessly

How we handled it:

- We did spend most of our savings fixing the kitchen and now have to do most of the work ourselves to get the actual issues in the house fixed (Fix critical issues before aesthetics Always)

- Fix the frozen pipes: Done

- Fix all taps, shower heads, and fixtures destroyed during the flood: Done

- Take our the destroyed carpet in the basement: Done

- Repaint all rooms, baseboards, and door trims: Done

In summary, when faced with an issue:

1. Draw up a plan of what you need to do by priority (what’s broken, how much it takes to fix - get quotes from as many contractors as possible). Make sure Mould growing in the wet wood panels takes priority over fixing a kitchen that was not affected by the flood.

2. Get your budget in order. Figure out how much it costs to hold the property each month (PITI and utilities)

3. Ask local investors for help and advice

4. Get to work. Each month you hold the home comes with costs

Any suggestions or comments are welcome as usual.

Go forth, learn from this, don’t repeat my mistakes, and crush it

@Joe Villeneuve this is all still unknown.

We are trying to fix the house and hold it as an Airbnb still.

Thank God we have the income to support holding both homes at the same time.

Newbies: Please Do Not overleverage yourself.

Don’t get so caught up with buying that you take improper steps and do not have the money to back it up.

That’s the easiest way to get in debt or even get bankrupt

@Joe Villeneuve the market has gone down since we bought (with interest rates going up), so we will probably lose All of our down payment and some

@Kashif Hayat you are so right. It was my enthusiasm mixed with my lack of knowledge and our (my wife and I’s) want to get ‘our own home’ that brought us to a good home but a terrible investment