All Forum Posts by: Alex Khojainov

24.  Found an owner financed wholesale deal in West Baltimore (riot central) and lived in it while I gutted and rehabbed it.  Rents for $750.  I'm 27 now, just closed on my third house.

Will, thanks for sharing your experience with us.  I'm looking at a house in Baltimore City that's in an up and coming area....but it's split into a rooming house with 2 tenants late at least 1 month in rent and a third tenant that told the out of state owner that he already moved out......your story made me re-evaluate my legal budget.

I appreciate your time Will and I'll look into the options that we're offered as well as the ones you listed.

Thanks for the great feedback. My biggest fear was hearing 'this is a bad idea and will never work'.

Brandon Turner thanks for the feedback. I've been in CC debt in my teens and based on some of the threads on BP about overages on rehabs, I'll reconsider using the cards for long term funding. Finding someone to fund the purchase while I cover the rehab costs is a great idea that didn't occur to me. I'll keep you posted.

Will Barnard Do you recommend that I change my pay structure with my employer to be treated as an employee instead of a contractor so I can show more income on my tax return? I've been running most of my expenses through an LLC to minimize taxes at the end of the year, but it sounds like this isn't the best option in the eyes of conventional lenders.

Steve Babiak thanks for the input, I was under the impression that as long as rent collections * 0.75 covered all expenses and the property was cash flow positive, the banks wanted to see the rental income for 6 months or so. I'll definitely keep that in mind. As for landlord experience, I've lived in DC in 'group houses' where I acted as the intermediary between the owner and the tenants (myself included) as far as ensuring rent is collected and deposited, new tenants fill the rooms, the property is clean and any issues like toilets, boiler, furnace etc are maintained.

It sounds like I'm not in a position to buy and hold YET, unless I secure private money. My long term goal is being able to build a portfolio of multi unit properties, but starting out it sounds like rehabbing and flipping the property is the best way to go since I can't secure conventional financing to fully take over the property.

Again, thanks for the feedback.

Hi BP, thanks for clicking on this thread, hopefully I can get some advice on this deal.

I found a nice 4-plex in a C+/B- area in Washington DC that is being gentrified. 1BR 1 BA in each unit, renovations have begun (demolition has been completed, new drywall (unfinished) is up, new windows are installed). I'd say the property is 50% complete, need to finish drywall, cabinets, sand and stain flooring.

I'm 25, have 4 years of residential construction experience, all necessary tools and truck from working for a contractor. I am comfortable with the scope of the that needs to be done and have other 'staff' that I can bring on to assist with completion.

My main issue is financing. I have about $20K in a buisiness account, another $25K available in credit cards. No debt. I currently rent and subsidize my rent by renting out the parking spots behind our house so my main expense is about $300 a month in rent.

I went to a bank to see about a mortgage, but since I've been paid as a 1099 at my previous job I can't use my tax returns to get conventional financing.

Should I look for a hard money lender? I found several that offer 6-month, 12-month and 18-month balloon notes for multi-unit/income producing properties in the area, up to 60% LTV of ARV.

I found a comp. 5 unit building selling for $425,000.

Asking price is $199,000
1BR/1BA units rent for $990 in the area.

I want to get an HML for the ARV, fill the units, and then re-fi with a conventional lender.

At 100% occupancy the property is chugging out about 4k a month, which would be enough to cover the $1200 mortgage on a conventional loan.

Am I going to run into the same problem showing proof of income when I go to refi? What do you guys think about this deal? Any and all advice would be greatly appreciated. DC RE is coming up and I know it's time to take the plunge. Thanks in advance!