All Forum Posts by: Elwin Green

This post is primarily for lenders and loan brokers.

I'm thinking of buying a townhouse complex with seven 2/1 units, listed at $465K.

I see it as a potential BRRRR project. I haven't viewed it yet, so I don't know what rehab it needs. In fact, since it's already occupied, it may not *need* any rehab at all. But let's assume that it needs cosmetic work, but not enough to move the needle much on value. For easy numbers, call it $500k all-in.

My question is, what type of financing might a lender offer on a BRRRR project in which the primary means of increasing the property's value is not making physical improvements, but improving its cashflow by increasing rents?

In this case, the units are all priced differently, with rents ranging from $756 to $850, for a monthly total of $5,551. According to the county housing authority website, if they were re-rented through Section 8, they could bring in $1,623 each, for a monthly total of $11,361 - more than twice the current income.

The GAI would rise from $66,612 to $136,332.

Would you, or the lenders you work with, finance a $500K purchase+rehab with an eye toward refinancing based on a $136K GAI?

I expect to close on an investment property in two days, and need to secure insurance. Looking for a broker or an insurer who can get a policy in place by then.

Glad to answer any questions that I can.

Thanks!

I seek financing options for the first and third Rs of my first BRRRR project.

I have a 2BR house under contract, and have funds available to close (about $32K).

Of course, the house needs the first R - Rehab.

Is there a lender here who would lend $20K-$25K against a free and clear property for rehab that would raise its value from $34K to $72K (per an appraisal in January)? (My credit score is sub-600; I know that makes it harder.)

After rehab, I anticipate renting it for $1622/month through our county's Section 8 program. After all expenses, I anticipate a monthly NOI of $1275.

That brings us to the third R - Refinance.

Is there a lender here who would make a DSCR loan based on a monthly NOI of $1275? If so, for what amount, and on what terms - especially, with what seasoning requirement? I would need to pay myself back the funds to purchase ($32K) and pay off the rehab financing ($20K-$25K). I would WANT to borrow as much as the property would support, to better position myself for my next deal - I am working toward a $3 million portfolio.

Thanks for the affirmation. Things will work out better this time bc I'm a different person, differently positioned. The vacant land that I'm looking at for possible development starting in 2026 is in North Versailles. I need to do all the front-end research.

 Thanks!!

 Thanks!!

 I'm an ACRE member, and am enjoying getting to know folks there. Thanks for the invite ; don't know when I'll make it to Morgantown. One thing that I've already learned on my second go-round is not to buy more than an hour away :)    - at least, not yet!

EG

Danke! I have zero connections in NC, but if by chance something emerges, I'll let you know!

Hi, all...

Half a lifetime ago, in the late 80s and early 90s, I took a run at real estate investing. I made enough mistakes to cause enough pain so that I crawled into a corner and curled up in the fetal position for 30 years. Now I'm re-entering the game, with the basic goal of assembling a $3 million portfolio of rental properties, with a focus on midterm rentals. I am also exploring the possibility of developing vacant land. 

I look forward to learning a lot here, and to establishing mutually beneficial relationships with fellow members!