All Forum Posts by: Greg Kasmer

Brady - In addition to hard money loan you can also consider a private loan from a family member, friend, or personal lender. You might be able to negotiate  better terms (e.g. interest rate, etc..) with them as opposed to a hard money lender. However, you might face similar questions on experience and money in the deal than you would with a hard money lender. Good Luck!

Scott - I think you got yourself a great deal! Those numbers sound very similar to where I've BRRRR'd before and you're correct, a $200 per door cash flow is not going to make you rich, but if you do 10,20,30 of those deals they start to add up over time. The property is a classic and looks like opportunity to me!

Emily - Yes, I generally agree with Brandon. I haven't found a lender willing to loan off of the appraised value instead of acquisition price at closing. After 3-4 months you might find a lender willing to loan against the home if some work/value add took place increasing the overall value of the home. In the Philadelphia area I would suggest talking to American Heritage Credit Union, WSFS, and Sun Federal Credit Union. I've spoken to them before and I think they would be a good starting point for you. Good Luck!

Mark - Congrats on the deal. Do you know how the property will cash flow after you refinance? Will you be able to pull out some/all of your cash invested? Also, is their a reason you are waiting for 12 months of seasoning? Might be worth calling some regional banks to see if they don't have a long seasoning period. I've used a few credit unions where there was no seasoning period once the property had a tenant in place - which was about 4-5 months after I purchased the property allowing for renovation time and tenant placement. Just an idea. Good Luck!

Daniel - Not sure how you're determining the rental income, but I would not assume you can achieve a certain % of value of the property in rental income. I would suggest you look at rental comps in the area based on square footage and number of bedrooms. I would then use those actual rental revenues to bounce against your model. Mike and and Jaron may be correct - This area may not be good for long term holds and BRRRs properties. The other scenario you may want to think about is a shorter term rental strategy (Air B&B) or renting mid term to hospital workers/professionals for several months at a time - that may be more lucrative on the income side and enable cash flow, but then again you have the ebbs and flows of how often you can rent it out. Good Luck!

Rami - I'm an investor in the Philadelphia suburbs and completed several BRRRs. Let me know if you want to connect/talk as well. Glad to help!

Jennifer - I'm looking a multifamily properties in PA and have also put a few offers in NJ - I think their is still a gap between seller expectations and buyers, so I'm experiencing similar dynamics. Let me know if you'd like to talk!

Alex - When you say "cosmetically in rough shape" are you talking about the mold/mildew issue or other parts (kitchen, bath) of the home? I think the appraisers will compare the finishes in Kitchen and baths when comparing homes and determine if they are relative comps. I'd also had appraisers ask the type (and how much) work was done to the house. If you installed an A/C and painted the house I could see them determining that is about $15k worth of work to the house and maybe get you a $85-$90k ARV assuming the kitchen and bath is similar to other comps. Good Luck!

JooYung - If you like the first lender better, then I would go back to the seller and ask for an extension of the mortgage contingency. You can offer to either increase your earnest money, OR, think about providing some "non-refundable" portion of the earnest money to them. In the latter half it would cost you if you back out of the deal, but at least that keeps you in the deal for now until you hear back on the rehab amount. Also, I would go back to your contractors and inform them you need an estimate by 5/18 (or some other date prior to 5/22) in order for them to be considered for the work. See if you can push them for some answers quickly. Good Luck!

Khaleel - I think whether you do a cash out refinance or HELOC they'll want you to keep a portion of the equity in the property. From my experience a cash out refinance will typically provide max LTV of 80% (keep 20% equity). However, on the HELOC side I've seen lenders willing to go up to 90% of the value of the home. So, if you think your value is $160k, then 80% would be 128k and 90% would be 144k. If your current mortgage balance is around 120k I think your best shot at pulling out the most money is to go with a HELOC instead of a refinance as I don't think it's worth it to refinance and only pull out $8k in cash.