All Forum Posts by: David Roe

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@Dustin Reynolds

You should read/listen to richest man in Babylon. I would refinance the rental you currently have and go buy the duplex, fix it up, then refinance it. It's called the BRRRR lots of info on the website here.

Having a house that’s paid off is like have $100k under your mattress. It’s doing nothing for you. All that equity can be used to build more wealth

Thank you for your responce, I figured as much, i find it a little funny you have to pay taxes on something you sold to yourself since our taxes are filled together.  I found a lender that will do a higher refi so its a dead issue now.  I just like to explore every option availible out there.  

I just bought a place for $40,000 that needed nothing and a $30,000 property thats just needs fresh carpet.  Ohio is a great location for that range of capital.  

49k for a 65k property isn't a bad deal, do you have solid comps to show the 65k value?

Confirm it's a 30 year term loan and the intrest rate is fixed.

Selling the property lease option to buy would be a good deal, you just have to get the seler you're buying from to sign a lease option agreement that makes you the Prime and that keeps you leagal.  If you're keeping it make sure you put it in a Land Trust to fall under Garn-St. Germaine act of 1982 "Owner of record may transfer their intrest in their property from a given name to a trust (without) triggering the Due on Sale Clause in most mortgage contracts"  

$85,000 property for sale with great cash flow, I have $10,000 but it's not seasoned in the bank. Local bank will do 25% LTV making needed Seasoned cash at $21,250. What's the best way to leveage this process? Lets pretend i dont use any of my cash at all...

1) seller agrees to an opperating agreement/partnership where he carries the 21,250 to closing then once closed he gets the full purchase price of $85,000.  And i am left with a 63,750 Mortgage and then a partnership loan of 21,250.  I get the property with no money down and the seller gets 63,750 of the 85,000 then a owner finance type payment on the 21,250....   He will remain on the deed till the 21,250 is paid off then removed from deed on the property.  

2) ???  What are other ways to do this>? 

Match the neighborhood to your renovations, dont put 10k in a kitchen for a rental that only demands 575 a month. Repaint the cabnets and do countertop and hardware only. Same with the bathroom, keep them under 2k totals for the rehabs for that cheap of a rental. Flooring i would do LVT everywhere, they can buy rugs if they dont like it. Try and find another duplex of same bed,bath rentals in that same neighborhood thats for rent, act like your interested and go view them to see the updates they have at what cost of rent they are demanding. If you plan to live in one side do a construction loan on it. If its a pure investment think about mb doing a HELOC after the repairs instead of a refi, compair your local banks products to which one will give you more flexability, rates, and LTV.

Also speak to more than one contractor about the repairs and cost.  4 contractors all could range from 10k-50k for the same rehab....  PS pay the contractor in 2 payments on a anything under 2 months 3 payments on anything above 2 months, they will work faster to get to that next payment on long jobs.  and never pay the last payment untill 100% of all the work is accomplished... 100%

Find out if the City allows negotiations on the Taxes another selling point if the City entertains offers on paying back taxes, the city wants to keep collecting their money if it gets tofar in the rear and becomes abondoned they make nothing...

Do a construction loan on the new purchase;

Under a construction-to-permanent loan, you borrow money to pay for the construction costs of building your home. Once the house is complete and you move in, the loan is converted into a permanent mortgage.

Because this format is basically a two-in-one loan, you have only one set of closing costs to pay, reducing the number of fees you owe.

During the construction of your house, you pay interest only on the outstanding balance; you don’t have to worry about paying down the principal yet. Typically, you’ll have a variable interest rate during the construction phase, so the rate and your payment can fluctuate.

Once it becomes a permanent mortgage — with a loan term of 15 to 30 years — then you’ll make payments that cover both interest and the principal. At that time, you can opt for a fixed-rate or variable-rate mortgage.

Also check with your bank, USAA allowed us to purchase our new home before selling the old property, i was not able to use the equity but they still alowed us to close.  If you have the cash in a 401k pull it out as a loan, purchase the new place then when your old home sells pay it back.

Hard money lender can also help, do a hard money loan to purchase and do a BRRRR but instead of renting you live in it.

Ask the seller if you can do a Owner Finace deal or Option2  etc.....   

MB keep your current home as a rental.... Why not?