All Forum Posts by: Duke Hartman

Hey Ted, welcome to BP. You're going to love all the great info here. I'm a newbie as well, just took down my first deal this year in Hawaii. What type of deals and are you looking for and in what area? Aloha, Duke

Alright everyone, thanks for the helpful suggestions. I think we have a happy ending in the making. The winning advice in my case was to keep knocking on the doors of local small banks and credit unions. I was recently approved for a $50k HELOC! Some credit unions are apparently much more lax about their underwriting, and even their basic requirements for lending (e.g. I found a credit union that did not require 6 months to season the property before lending a HELOC, nor did they really verify the fair market value other than checking the tax appraised value). So while I see victory in sight (loan should close in two weeks), I will certainly take this hard lesson with me: always remember equity, debt to income AND seasoning requirements when attempting to get a HELOC or cash out refi. Thanks again all! Aloha, Duke

@Dan Schwartz thanks for this tip. You are right that the gross income from the property is only $4500, with $4300 in expenses. But that frees up my $1700/mo in rent that I used to pay at my previous house. I will be dedicating that cash flow stream 100% to debt repayment. I appreciate the suggestions of an equity play, but I am hoping to preserve our equity and squeak it out somehow with only debt. Friends, family and/or fools seems to be my best bet at this point ;-)

Hi guys. Thank you so much for offering these tips - I really appreciate it. Chris Eaker I will certainly keep talking to banks and hope to get one base hit, but my mortgage broker thinks it might be a lost cause. I need my car to get to work, so that ones out. Ken P. And Bill Thompson that is a great idea about borrowing against the 401(k). I will talk to my boss about it today :-) Dan Schwartz the closing date was March 31st. The units are really close to being ready. In fact I think the $1500 unit tenant can move in this weekend (already found one). We will start marketing the $3k unit next week once a few little loose ends are tied up (bathtub fixtures, hooking up appliances). The one thing I wanted to do before marketing the more expensive unit was to paint the outside in order to get top dollar, but I think I am going to have to forego that expense unless I can get more $$ now. Bill Thompson I do have about $21k in a whole life policy and was sort of considering that my last reserves. But yes, definitely agree with your points about the temporary nature of that money. And yes I think I will have to go begging to friends and family for the time being... Cash flow will get so much better in July but for now I guess I have to swallow my pride if these other options don't work. Thanks again - any other thoughts are still very welcome

Okay fellow Big Pocketers, I got myself into a big pickle. I hope you can help! I recently purchased my first deal, a three unit rehab (in Hawaii so don't be alarmed by the numbers I'm about to share). We are going to live in one unit and rent the other two. We are 85% finished with the rehab but my problem is that I need a little more cash to finish the rehab and pay back some of the credit card debt and family loans that we took on in the process. Basically the problem is that I was operating under the assumption that as soon as I got into the house I would be able to get a home equity loan on the property to help me finish construction. But that has not happened this far. Here are the details: Purchase price: $760k Mortgage: 80% conventional 30yr fixed, 3.99%, based only on my income = balance of $608k Appraisal price (during escrow): $875k My W2 gross income = $8000/mo Payment PITI: ~$3200/mo Fair market rent: Unit 1: $3000/mo Unit 2: $1500/mo Unit 3 (our unit): $1700, but we are going to be living there. Utilities and other expenses: $1000 Rehab cost: To date (after 2 months): $85k Est rehab cost remaining: $15k Est FMV after rehab: $1M I need cash from a HELOC or other source to finish the rehab and pay back personal lenders: about $45k (needed within 30 days). During the escrow process the house (unrehabbed) appraised for $875k. Thus, I thought even with an 80% LTV I should be able to get $700k-$608k= $92k out. However, the first bank I applied to (after taking a long time deciding) told me that they had a policy of only accepting the purchase price as the value for properties that have been owned less than 1 year. So I went to another bank that apparently did not have the same restriction, AND allowed up to 90% LTV for their HELOCs. I thought it was a sure bet. However, they just informed me today that my debt to income ratio is too high and they cannot lend me anything. They cannot count my rental income because it is technically a single family home (renting multiple units out of a SFH is a very common thing in Hawaii). I think it may have had something to do with the fact that I had some significant balances on my credit card of about $30k at the time from rehab purchases (that I pay off in full every month and I told the loan officer as much). But the bottom line is that I am at a loss for what to do now. I've tapped out most of the family connections I can and would prefer not to go begging to other relatives if I don't have to. I am working with a mortgage broker to see if there is any other way to get a home equity or personal loan, or even do a cash out refi. But I figured someone in the Bigger Pockets community might have some brilliant creative financing strategies that would work in this situation. Can you please please help me figure this out?? Thanks in advance for any suggestions 😅 Anxiously yours, Duke

I'm wondering if anyone has experience with resident screening companies such as the National Tenant Network? Considering this service to help get good tenants in the FIRST time. Thanks Duke

Hi all, I'm wondering if anyone has had success in finding quality help through website such as HomeAdvisor or Angie's list? Looking for contractors and handymen in Hawaii in my case. Thanks Duke

Brandon Potter yes that would be great. I have not figured out how to private message people on here - I clicked on your profile but didn't see an option to message you. Can you contact me? Thanks...

Hi all, I'm looking for a handyman, electrician, plumber, and carpenter. The current rehab is in Kalihi Valley on Oahu, Hawaii. Anyone know good and reliable professionals in the area? License not required. Job will start in about two weeks. Thanks, Duke

@Michael Mazzella thanks for the welcome! Glad to see you're still at it! I definitely would like to buy you a coffee or lunch sometime and catch up. Sounds like business is moving.

Thanks @Sherwin Gonzales ! I'll definitely be posting about my adventures here - will do my best to make them success stories and not war stories...

Thanks for the welcome and encouragement @Michael Borger . I think we may have met at a REIA meeting a while ago. Glad to know you can keep the investing going from oversea. I plan on doing that in a few years or so.

@Duc Ong glad to know there's another newbie learning the ropes next to me. Sure thing, I'll message you my contact.

Aloha

Duke