All Forum Posts by: Chris Stroup

Another random though, can you get a loan? Does your debt to income support it? Do you have leases signed by the people living in your house? If so, some lenders will use the leases to offset your DTI. Talk to a lender!! Sometimes local banks will be able to work with you and make things happen that other banks can't.

If it is a VA loan your friend should not let you assume his loan.

About using a Realtor, if you have a friend that is a Realtor in the area, maybe they will help with the transaction for a reduced commission.  If you guys don't know what you are doing I would suggest having a professional involved in some capacity.  You really need to make sure it is done properly.  

How much will this place rent for?  Does it beat the 1% rule?  Can you Airbnb it?  

What is the value of the house?  If you are insure, this is where a Realtor will be very handy.  Does the area appreciate?  If you are buyer below market value and it will appreciate, maybe in 6 months or a year you can refinance and get your downpayment back out.  But then you will cash flow less because your loan amount will be higher.  So many options, real estate is awesome and a lot of fun. 

If this is a killer deal, it might be worth taking some risk and spending your money.  If it is just an ok deal, maybe it isn't worth putting yourself in a potentially compromised position.  

@Bob Ross we use it for short term money.  Normally they are 12-month loans.  At the 6 month point, we refinance into a 30-year mortgage.  We are using commercial loans and the same lender gives us the initial loan and the refi.  

From my experience the most successful investors have a steady flow of cash to invest.  Either private money or partners or income or a combination of all of those.  

The most important thing is to get started, once you have a good handle on what you are doing.  The first deal is the hardest and then things start to roll.  

How involved do you want to be?  Are you comfortable managing a large project?  Do you have a good relationship with the GC you have been working with?  

Without knowing all the details, I generally default to hire a GC.  Let a pro do it so you can move onto the next thing.  

Here is a practical application.  Do a bp calculator for a property paid all in cash and then do it with a 30 year fixed-rate loan.  The cash flow is definitely different but not enough to tie up all your money.  

How many down payments could you put down instead of buying all in cash?  4 if you are doing 25% down.  That is if you have reserves and everything else sorted.  Now you have 4 properties that the tenant is paying down your mortgage and you are cash-flowing every month.  

You can take it even further and use the BRRRR and get all of your money back and still have the benefits of a tenant in place.

We are working with a commercial lender.  They fund the purchase with a short term loan and then we refinance into a 30 year fixed loan once renovations are completed and a tenant is in place.  Our interest rates have been around 5.8 to 6%,  They normally charge around 3 points.  The upside is that we can have multiple loans getting funded at the same time without any issues.  It also doesn't mess with my ability to buy a personal residence.  

To get funding, it is depended on the deal, credit score of each member, cash reserves, and real estate investment experience.  The application that we have to fill out is only 2 pages and does not take long.  As long as the deal is good, there is funding.  

I'm with Five Pillars Realty in Fayetteville.  We are known for working with investors.  Happy to help in any way that we can!! 

Gil Jacobs at Alotta Properties!!  Gil and his team are great.  

 

The VA loan is awesome! Seems like you used it to your advantage.

What do you plan on doing next?