All Forum Posts by: Dustin P.

It's illegal in a lot of states, just like jaywalking and driving over the speed limit is illegal

@Matt Hatton

I would get your license and secure funds to close the deal. Buying and then reselling a property without doing anything to it is perfectly legal everywhere, unless I'm missing something.

Reach out to relatives

I would honestly get with a local real estate lawyer to help draw one up. You want to make sure everything you are doing and the documents you are using are legal in your state

Let's say the realtor wants a flat commission of $3,000 and you are selling the property for $150,000. The realtor's buyer will buy the property at $153,000 and the realtor will get paid out a $3,000 commission at closing. Since they are licensed they can just get paid on the settlement statement.

@Jesse Streng Typically lenders look to loan 80% LTV on the house if it's an investment property, 75% LTV if you're also going to pull cash out. You may be able to get a lender to do 85% LTV but then you'd be paying PMI. I can connect you with a lender here in Phoenix if you wanted to run some numbers on it

@Anthony W. Thanks sir! I don't think I'll pull the entire remodeling cost out but hopefully a good chunk of it, Phoenix is pretty much impossible to BRRR in right now but as long as I get a good amount of cash flow and still have some equity I'll be happy! Good luck with your investing in Ft. Sill as well

Edit: I was assuming you would be refinancing into a conventional loan so that is why the 80% LTV talk

Definitely seeing it in Phoenix. Neighborhoods where we used to buy houses in the low 200s that were fixer uppers will have a house scooped up at 275k with multiple cash offers

I'm seeing a little saturation in South Scottsdale but other than that things are moving pretty quick

Hey Jesse, I am doing this exact thing in Tempe right now so I can give you my take.

I think it's a great idea as long as you will have the equity to refinance the VA loan at 80% LTV. You may have to do some improvements to the home to do this. I would also factor into your numbers that PITI will likely go up a bit since it's going to be an investment property now. Once you refinance you can regain your VA eligibility and use it to buy the next house. I believe they let you use the VA loan twice in any one commuting area.

I'll give the example of my house I just purchased. We used the loan about a month ago to close a $380,500 property in Tempe near Warner Ranch, 4/2 2400 square feet with a pool. Currently we are finishing up the remodel on it and will then move in, putting roughly $55k into it to do a complete upgrade. We liked this house because we knew it was undervalued. A model match 2 houses down went for $420k 6 months ago, better condition in terms of paint and landscaping but identical builder grade finishes.

A house right around the corner just hit the market at $560k, remodeled, and went under contract in 3 days. If that closes anywhere near that mark I know our house is worth $500k all day long. When the year mark is up we'll make the decision if we want to rent it. If so we will refinance, potentially pull cash out to recover some of the remodel money depending on where the appraisal comes in at and what rents are, and then use the VA loan again.

The biggest factors you have to consider are 1) Will you be at at least 80% LTV and 2) Will the rental cash flow enough to cover PITI, expenses etc.

I would definitely get the contract to title and put up the earnest money ASAP before finding a buyer

About 2 months, MLS deal