All Forum Posts by: Cody Campbell

Roofstock.com

First of all your numbers are awesome, Either one would be great. I try to keep as much money in my pocket as possible so I can move forward and do more deals. I would go with the commercial, the 5 year is a simply a safe guard the bank takes....also at the five year mark you have the option to shop around and potentially pull more money out at the five year mark. 

Victor, what is the price range of the houses in the area you are investing in? This will allow me to give you some more specific advice. Your sitting pretty with some of the numbers I have already. I do exactly this, use small community banks and lines of credit to buy, rehab, refi, pull all my money out, and rent for long term buy and hold.

2% flat rat for 30 days is actually 24% annually (crazy number)...this entices them to do the deal, and if you do close and rehab in 30-45 days, they are willing to do it again. I feel this is fair because both parties can win.

If this is for your primary residence and it seems that it is. I would go all in. You have lots of options. What the price of the land? Whats the amount you can borrow on your HELOC? I would need some numbers to actually give you some more insight, but

Options so:

-Ask the land seller if he would owner finance for a year

-Talk to banks about construction loan

-Sell your house buy a pull behind camper trailer until rehab is done and sell the camper trailer

Raj,

What is too small the loan? The property? Are you talking with banks for this deal?

With a property at that price I would do a Hard money lend and pay cash for the property, get enough from the lender to also do the rehab. Once you have done the rehab hopefully less than 30 days, go to a bank and get it refinanced and pull all the money back out. 

Example

Hard money Lend: 52k (Give the lender a great deal flat 2% ($1400) for 45 days) Close with the cash, rehab fast. So total in is 52k + $1400 = $53,400

After rehab appraisal: 65k (estimate) 

20% equity kept for the bank: 13k

Cash out 52k, so your out of pocket 1400 bucks. 

This is what I do and it works great. If it appraises for 67k, your now in the property with no money down. This method will decrease your cash flow but also decreased out of pocket expense to buy these houses.

Figure out what the bank will allow to borrow. I'm in a small town and deal with small town banks, which is awesome, but find out what they will lend you. Then you know where you can start. Why look at 350k properties when you actually know the bank will lend you 100k. This is super important and with the number of deals you do the more they will lend. 

If you're not using a bank and using hard money lends or other peoples money, see what they are willing to lend you. This will direct you in the deals you can and will look at

Leonardo,

It would actually depend on your strategy, are you a buy and hold and this will be your premier RE deal for the next 5-10 years? If so go ahead with the higher amount down. Putting 15% keeps money in your pocket to do other deals with if something comes available. Personally I'd go and do go with the lower amount down to give me more options on other deals in the future. 

I would take a look at weshipfloors.com and their supercore is a waterproof LVP that is awesome...they are a TN based company and could help you out...send them some pictures and they could match it up for you. I use their supercore in all my flips/rehabs.