All Forum Posts by: Garrett Addington

Thank you for your response! I have definitely thought about selling, but I also think it is in contrary to my goals of wanting to build passive wealth. Also #4 is 90% completed but it will need about $10k more before it is ready and I don't want to spend that right now since I am already spread thin on liquid cash.. 

In regards to waiting 6 months, I also feel like this limits me in my growth options if I were only buying 1 every 6 months.. However, I do agree that I will more than likely have to end up waiting 6 months for this specific situation but I am also looking to expand my knowledge so I can be more educated on what my options will look like the next time I catch myself in a similar position. 

Is there a better way to do this for next time? or are most people either waiting 6 months when they do this strategy or coming out of pocket ? I didn't know If I was just being impatient or if I just haven't found the right lender yet. 

Hey! I am 23 years old, and I have been a licensed agent for about 4 years now. I have recently acquired 4 rental properties referenced below, and I am looking for the best refi strategy to get my cash back out so I can continue to grow my portfolio.. Thanks in advance for any insight!! 

1- $85,000 condo that I owe $55k against (currently doing Airbnb with it)

2- $125,000 condo that I just bought it November for $85k cash. No note against it.***

3- $130,000 single family that I bought back in August and spent wayyy to much money on the rehab. No note against it.***

4- $240,000 single family that I bought back in May for $120k and put about $40k into it. Still owe $120k against it. 

I am looking to REFI one of the above properties with 75-85% LTV of the new appraised value without waiting the 6 month seasoning period. I am finding that most lenders will only lend up to 75% of my cost in the property or 75% of the purchase price if I REFI prior to owning it for 6 months... I suppose my question is if everyone is having this same issue, or if there is a lender that will do these terms so I can avoid coming out of pocket for each one of these properties. 

I have been able to find one lender that can do 85% of the new appraised value without waiting 6 months, BUT it is a 20 Year ARM with a 5 Year fixed and after that 5 years, it becomes adjustable with NO CAP on the rate, plus there is a prepayment penalty. The rate was fair at 4.72% with minimal closing expenses.. Do you think this is worth taking since it is the only lender I can find to do these terms, or is it worth it to continue the search for someone that could do it with more favorable terms?

Please see other loan estimates below and advise which would be more beneficial for my circumstance (Young, hungry, and looking to grow but I extended myself too thin and currently have almost ALL of my money tied up into these properties so I am looking to balance myself by getting some cash back out. Great income, 800+ credit score, etc.) 

1- 85% LTV of new appraised value with 20 year ARM (5 year fixed with no cap) at 4.72%

2- 75% LTV of new appraised value with 20 year ARM (5 year fixed with 2% cap/year and 5%cap/over the term) at 4.5% but I would have to wait 6 months

3- 85% LTV of purchase price with 15 year balloon but its a 4.1% fixed rate amortized over 30 years (high cash flow) but this would still have me leaving my own cash in the deal which I am trying to avoid

My intentions behind all of this is to acquire as many properties as I can without coming out of pocket for anything (BRRR). I have had other investors recommend a line of credit but I seem to be finding that it would still operate the same when I try to roll over that credit into permanent financing in regards to LTV and the seasoning period.. Thanks in advance for any input on this!!

Respectfully,

Garrett

Thank you @Jeremy VanDelinder, I really appreciate the helpful feedback! Very impressive flip on HGTV by the way. 

Thanks for the quick response! It will be a cash purchase but I will certainly double check to see if there are any loan guidelines that would prevent funding on a repaired fire damaged house..

I am in contract to purchase a house that recently had a fire, but most of the studs are salvageable, however.. all bathrooms were removed, all flooring was removed, all HVAC needs replaced, ALL plumbing and electrical also needs replaced, along with some insulation, windows, and other misc repairs.( the roof is still good miraculously ) Some additional facts that may help your response are.. the fire happened about a year ago, but just recently came on the market as a foreclosure. The insurance claim was denied due to arson.. I spoke with the fire Marshall and I am confused on what questions to even ask.. I am a licensed realtor and I have a lot of clients who do this all the time, so I have a decent knowledge on the remodeling process and costs but I have never really done a flip that needed more than a just little TLC, so I am ignorant in where to start on the due diligence for a situation like this.. some of my questions are listed below but I would love any additional advice and opinions. Thanks!

-Is there any specific documentation that I should request for the damage of the property, if so- who from?

-What additional inspections and or tests would you have done aside from the basic home inspection, termite inspection, and structural engineer inspection? (property is on public utilities, including gas)

-What permits will need to be pulled and when? ( I know this is all dependent upon the location, but looking for a general idea)

-Who would determine which studs are "salvageable" ? (I read on another posts that if the fire damage is deeper than 1/8 inch then it needs to be replaced but who confirms that and what is the process of having that done)

     -Also, how much extra do you pay to get rid of the smell (i.e., Kilz, Ozone Generator, cleaning solutions, etc.)?

-Dumb question, but I assume I will not be able to obtain adequate insurance until the damage has been repaired? or is there a specific type of insurance that I should still carry through the remodel?