All Forum Posts by: David Espinosa

I would check with your lenders for exact numbers and percentages!

So use hard money to buy fast fix fast. You then would put a tenant in and after the seasoning period use a regular loan to pay back the hard money lender and do it all over again. The brrrr works best with your own cash but can be done with hard money lenders. The bank will  loan you like around 80% of the value of property which pay back hard money lender and maybe a little extra. The key is getting a property at a good enough price to cover all in costs at the 80% arv or lower to be able to rinse and repeat. You have to factor in the cost of capital in your figures as well. Dont forget it has to rent at a rate that you are good with. If you have $80,000 in and only rents for $650 it may not be a good deal even if the brrrr numbers look good. Lots of homework to do. 

Hard money lenders dont have lots of loops to jump through to close. They can close alot faster than a traditional bank.  Also when you use a bank for rehab they want to look at work that has been done and make assessments on paying your contractors which can be verry time consuming. Getting approved for financing from a bank can be harder.  A big bonus to using a hard money lender is that, if they will fund the deal, they believe it will be a good investment. If they wont, maybe you missed the mark and you probabaly should not do that particular deal anyways.  Run the numbers at a worst, good, and great scenario and show the lender. Show comps for your deal and always, always have extra exit strategies!! 

I personally havent used hard money but... You have to put down a percentage up front and you make payments on the loan like a mortgage.  Hard money lenders will loan amount for rehab as well.  With your experience and deal you have you may have to put down more or less but you typically have to have skin in the game.  When you get a loan it will be for a specific amount of time in which you will have to pay back the amount.  You can ask for extensions but will cost more money. Use hard money wisely. Hope this helps. Happy Investing!

David Espinosa

Well honestly I would not wait! I would start with a househack. You can buy upto a 4 unit building with a fha loan.  It will cost 3.5% down but there is also assistance with that as well in some areas.  You can ask for seller to use up to 6% of the purchase price to cover the closing costs.  You may be overleveraged at first but you will be able to refinance out to get better terms later. It will also start you with landlord experience which some lenders may require for buying rental properties. You can get most if not the whole morgage covered by your tenants which can free up money you can start saving to use for investing. Hope this helps. Happy Investing

David Espinosa

Agreed, do it yourself, even if you plan on eventually using a manager you will atleast know the kind of things your manager will be doing for you!

Im not a pro member but I can tell you if you go to local REI meetups you can make some great contacts that you may be able to assign a contract to. I would talk to as many people as you could and see what kind of investing they like to do. Take notes on everyone you meet, get cards, ask them who are the cash buyers. Hope this helps. Happy Investing!

David Espinosa

I don't know about your area but my area its pretty easy to do a check you just need basic info on property.  My county clerk has a website just for checking records.  I would call the clerks office to see if something similar exists in your area. I would always recommend even if you cleared title by yourself pay the company to do one on any property you eventually pull the trigger on!  I would listen to Jeff on running numbers and such before looking into title because just because a property is a foreclosure doesn't mean its going to be a deal.  I would also go to a live auction just to see exactly how they work before going in blind.  If you are trying to do creative financing deals I would write up papers with a contingency that the title is free and clear and then obviously get a title search before closing the deal.  Hope this helps. Happy investing!

David Espinosa

Well thats a tough question.  Its going to depend on the area and type of property.  Traditionally sfr tenant will pay all utilities and lawn and snow removal.  Multifamily varies depending on what the other properties in your area are paying for.  If everyone in your area pays water and electric its going to be harder to get a tenant to want your property unless the price is lower. Typically multi family you pay for snow and lawn care.  Hope this helps.

David Espinosa

@Ryan Hannas.  Thank you!! I was having a hard time finding info on google that didn't invole putting rams under slab and things like that.... Lol! It wasnt that bad, other than that, the property was good but she changed her mind on selling it.  Oh well, on to the next!! Happy Investing.                                                                              David