All Forum Posts by: Jeff Copeland

If you are contacting lenders and asking them if they "are interested in working with the BRRRR method of investing", two-thirds of them probably have no idea what you are talking about. 

The fact that you are employing a BRRRR strategy really has nothing to do with the lender's appetite for the refinance.

You should be looking for lenders who are interested in doing conventional refis (which is pretty much all of them, that's what they do: purchases and refis). In other words, you're not looking for anything special, just a conventional lender who is responsive, has good customer service, stays on top of the underwriting process, etc. On that note, you may have better luck with mortgage brokers (who can shop around for multiple loan products/options for you) than with local banks. 

Admittedly, you may find that underwriters are being somewhat conservative with all of the uncertainty in the economy, inflationary pressures, interest rates, etc. But, if anything, the refi business has dried up compared to a year ago, and they should be eager for new business. 

Can you be more specific?

In many areas, "unincorporated" just means "not inside the City limits". 

That does not mean you get a free pass on zoning, permits, inspections, etc. It just means you deal with the County government instead of the City government, and one is not necessarily better, quicker, or easier than the other. 

This is somewhat State-specific, and it's probably worth finding a great attorney in your market to figure out what is best for you. 

Also keep in mind that an attorney, a CPA, and a mortgage lender will often have competing advice when it comes to these things. 

For example, while an LLC is almost always best for asset protection (from the attorney's point of view), it will not get you the best residential financing terms (from the lender's point of view), so it can be complex and very situational depending on your financial position, risk tolerance, and goals.

BTW, we recently did a podcast episode on this exact topic (available at the link below in my signature and on our Youtube channel, which is not hard to find) you might want to check out. 

The promissory note you signed at closing (which probably also included an amortization table) specifies your repayment terms. Period. 

I suspect some of the calculators are just rounding to the closest whole number. And if that's what you're paying, them your amortization table should reflect the actual payment amounts.

Part of me gets the fact that you want your numbers to be perfect. But $0.37 (or $200.00 for that matter) is not worth losing sleep over. 

One thought is to use the leverage of the pending eviction to implement cash for keys. 

If you treat the occupant with respect and explain to them "Look, I didn't create this situation. I used my hard-earned money to buy this house as an investment in my family's future", etc etc. 

And explain to them that it boils down to two options:

1. Wait out the eviction. It may take a few weeks/months, but eventually the sheriff is coming to remove them from the property and they will have an eviction on their record for the rest of their lives, or

2. "Work with me here. I'll give you $1,000.00 (or whatever amount is feasible and appropriate) to be out by the end of the month (or whatever date is feasible and appropriate). You leave the house reasonably clean and empty, you hand me the keys, and I hand you 10 crisp $100 bills on the 31st."

Option two often ends up being cheaper and quicker for you in the long run. 

Here's the key: Use the right paperwork! Get it from a local attorney and make sure it is signed, notarized, or whatever is needed, so that if they don't leave, you have the right to move forward with the eviction the very next day. In Florida, this is often called an "Agreement to Vacate" or a "Mutual Termination":  

https://vimeo.com/295589587

Beyond that, it may be worth talking to your insurance agent about whether damages caused by a tenant would be covered, and to what extent. 

Here's a great overview of seller financing (and really any type of private financing works the same way): https://www.biggerpockets.com/...

And there are tons of resources and threads on Sub-To financing on BP. 

A more viable strategy is to use your HELOC to acquire a value-add property, with the intent of refinancing once the value-add component is complete. Use the proceeds from the cash out refinance to pay off your HELOC, wash, rinse, repeat. Essentially the BRRRR Method. 

The same general logic applies to a fix and flip. 

Otherwise, you are correct: If there is there is no value-add component or significant appreciation that allows you to refinance and recoup your initial investment , there's no real advantage to using the HELOC (aside from having the capacity to buy the property) from a financing standpoint. A HELOC is not intended for long term debt.

1. Get good at doing "pre-inspections" during your initial walk through / viewing. Know the key items to look for (especially FHA property condition requirements).

2. Don't order your appraisal until after your inspections are complete and you are very confident in the property condition. 

3. Negotiate for repairs rather than canceling. 

The most comprehensive guide I've found: https://www.therealestatecpa.c...

(no affiliation, just sharing a great resource)