All Forum Posts by: George Krajacic

Hi David, I congratulate you on your goals. If you are dealing with banks or PMLs I can’t think of the way to reduce your down payment. However there is the way to pull part or all the capital out upon refinancing. To achieve that one has to increase value of the properties by buying heavy fixers or the properties that one can increase value of by adding extra bedroom or bathroom or both. If it is done right, in the right neighborhood, one should be able to refinance and reduce your capital locked in the property. No free lunch! You want to pull your money out you have to work for it by increasing value of the property so that lender sill has its protection.

Good luck,

George

Hi Holly, One of my answer was not complete. I forgot to mention that one also has to deduct "as-is Value" from the sale price to get to the profit amount. I am sure you knew that but just in case.

Good luck,

George

Hi Cassandra, I like to address only part of your question. From you question I am assuming that you are new to the business. If that is the case than I would suggest learning to walk before you start running. Start slow and learn the business. If you are working on one project, mistakes can be handling easier than if you are working on three projects at the time and you are making same mistakes on all the projects.

Concerning you question on “how to juggle multiple mortgages?” I am assuming you are asking on how to qualify for those mortgages. If that is intended question, than I would need more information about your particular situation. If you share with us the price of the properties you are planning to flip and the amount of liquid funds available, then I would have a better idea on how to answer the question. Also, if you are new to investing I would suggest attending local Real Estate Investment Clubs meetings where you would meet people with same interest and have a chance to learn from the members or the speakers that clubs usually have at each meeting.

Good luck,

George

Hi Will,

It appears you are a smart guy thinking too hard how to beat the system. Neither of your scenarios would work because, as somebody stated in one of the previous answers, banks appraise the properties and they will loan about 80% of lower amount. However, I do know of a potential bank that might loan 100%. The bank’s name is “The Owner”. Let’s use your example. Tell the owner that you will give him $200K for his property if he agrees to accept $1000 interest only payments for one year. Now you are controlling the property with $1000 monthly payments. If the owner does not go for the sale then switch the tactics and tell him that you will lease the property for one year with option to buy for $200K by making $1000 monthly lease payments. If you do not have refurbishment funds get a partner or better yet if you have experience you might get the owner to fund the repairs by offering the owner 50% of the profits. I used those funding methods myself so I know they work. Try it you’ll like it.

Good luck,

George

@Brian Corbett That's a great book too. It will definitely help you make better decisions. 

I think when you have something that you don't want to just give away because it has some value, just list it at a below market price so it will move quickly.  Then you get a best of both worlds.   

At least it has you thinking about prioritizing your decisions about your time.  

Best of luck.

George

Hi @Joshua Dorkin

I noticed this post is two years old and I wonder if the problem has been rectified?   I want to put my Youtube channel in my profile, but I only have options to do so as /c or /channel (not /user).   

Thanks. Looking forward to an update. 

Hi Brian, You are starting to answer the question for yourself.  Just by asking these questions, you realize that you may not be prioritizing correctly and what you will end up seeing here in the answers will probably confirm what you are already thinking.  

I would like to recommend two books for you from experts who have figured out prioritization really well. 

The first is Steven Covey's First Things First.  

The second is the 4 Hour Workweek. 

Both are hugely beneficial for helping align your thoughts in the right direction.  I especially like the section about the quadrant where you focus your efforts on the "important / not critical" items for staving off emergencies and investing in long term success.  Also, if you have some house chores to do anyway, check out the audio version for multitasking.  It's my favorite way to "read". 

PS  Ever city has scrap metal guys that will come and pick up your scrap metal for free.  Just put an add in craigslist.org in the "free" section of craigslist "for sale" and you'll have responses within 5 minutes every time!   Even if there is some labor involved in removing it, most will be very willing to help in exchange for the scrap metal.  If the entertainment center has even a little value (lets say to a college student moving into a shared house for the first time),  offer it for free and they'll pick it up. 

Hi Christopher,

You will not get financing if do not have experience or down payment! Are you saying that purchase price is $240,000 and the bank is asking for 25% down which would be $60,000. If that is the case, I would suggest wholesaling to buildup you cash reserves. Another way is to get a money partner who has $60K and then you get a bank loan. I would always try banks first before going to hard money lenders. Hard money lender would also require 25% down; charge you 2 to 3 points and higher interest rate. Since this is your first flip, lenders might also ask for you to have higher cash reserve. I hope I answered at least part of your question.

Good luck,

George Krajacic

Hi Maria, now that I have a better picture of your situation let's make it simple and get you started. First keep a job for a while you will need it to qualify for the loan. You are in excellent position to buy your first flip with only 3.5% down with low interest FHA loan. I will assume that you know your city and good areas to flip in. Determine which size homes are most profitable to flip, then buy the ugliest home in the neighborhood that will still qualify for FHA financing. I do not know if you would have to move in to the home while you are fixing it, but in any case, within a year you would have perfectly fixed home ready to flip or rent. I am inclined to advise to keep it as rental since you will have low interest loan that we might never see again. I am not sure but check it out, you might be able to move out of the home within 6 month if you find a home to be either too small, incontinent location etc. and qualify for another owner occupied FHA loan. This will get you started and the rest is up to you. Also attend Real Estate Investment Clubs meetings and that will get you up the speed.

Take care,

George krajacic

Hi Maria,

To answer your question I would need to know much more about your situation.

• What are you planning to invest in?
• How much capital do you have?
• Do you have a job and what is your income?
• Do you own a house?
• What is your credit score?

As an example, let’s assume that you plan to buy a rental house. Above information which you would provide to the bank in a loan application would be sufficient for them to decide under what conditions they would finance your project. You would not need a business plan. House particulars would be a plan in itself (price of the house, projected rents, projected expenses and projected cash flow).

I hope this help or post additional questions.

Good luck,

George Krajacic