All Forum Posts by: James Perdomo

@Jaysen Medhurst yes i like to be conservative to have some leeway. I have increased reserves to 15% and yes it includes capex and maintenance. I have a partner who would be putting up most of the rehab funds, we’ll look for a credit card with a promotion like a home depot one for the rest. I am also pretty handy and can do all the painting, hang cabinetry, flooring, wall tile. I’ll save myself lots on labor. Since i am in the early stages of my career, i dont have a problem with sweat equity and i have the time as well. Thanks for all your input!

I can cover $270 a month without touching the rental income. I did the refi at 70% and at 6.5% which is high. I chose the insurance amount from what i currently pay for insurance on my other property which is very similar but larger in SF. I essentially get a rental with no money down after the reimbursement. What do you think @Jaysen Medhurst?

@Jaysen Medhurst HELOC. I meant $3250 a year. totally screwed that up... Cant edit the post lol. What do you think though?

Congrats! sounds like a slam dunk!

I have a deal about to go into contract. I am trying to decide on how to finance it. The agreed offer is $50K and it needs about $35K in work that will probably last 2-4 months. ARV is $130K

Option A: I just got approved for a line of credit secured by my other rental property which i own free and clear and is rented for $1100. The LOC was approved for more than enough than i need to close but the monthly interest payments would be around $3250 which i can't afford. I looked at this option because i did not want to commit to a 30 year loan. My plan was to refinance to a long term loan to pay off the principal of the LOC, but if i need 6 months of seasoning, that would cost me close to 20K in interest (makes me sick to think about). Although, having the line open after refinancing would be a plus to have, but it is a lien against the property.

Option B: Cash-out Refi my rental property for a much lower monthly payment estimated at $460 (incl. insurance and taxes and at a 6.5% rate which i know is high but title is in the name of my LLC). The rent will easily cover that and the rest of my operating expenses which are just vacancy and cap ex reserves - (20% $220/mo).

Option C: Apply for a fix and flip loan and convert it into a long term loan after property is rehabilitated. The property will rent for $1300 easily and is in a great area. I will have to pay closing costs twice and most likely pay a higher rate (i've seen around 7-9%). 

Option D: Wholesale for a $10-15K fee and keep it moving.

I don't touch any of the cash flow in my current rental and just saving up to do more deals or reserve it in case of any capex (it was a full gut so probably unlikely for sometime). I rather hold it then wholesale as i want to build my rental portfolio. I would love any insight and opinions on what you would do and what other things i should consider here. Also, if i did accept the LOC, would i still be able to do a cash out refi if their is a first position lien but the line is unused?

Thanks for reading.

@Sharon Vornholt Thank you! You are absolutely right. Going to increase the mailing tenfold by the end of the year.

@Watson Hilaire PP 100k Repairs 22k ARV 185K. We're paying for repairs with a company credit card. We have the cash in hand and also have the draw money from the HML. Contractors are already working. We anticipate to be out by september.

Investment Info:

Single-family residence fix & flip investment in Allentown.

Purchase price: $100,000
Cash invested: $3,000

Contributors:
Eury Vargas

Mailing consistently for 7 months until we came across an executor of a will who was getting rid of his parents home. We raised all the money to purchase and only came out of pocket for closing charges.

What made you interested in investing in this type of deal?

Meat on the bone

How did you find this deal and how did you negotiate it?

Direct mail marketing. In person negotiating.

How did you finance this deal?

Raised 50K from a private lender and 50k from hard money

How did you add value to the deal?

Updating entire house, fresh paint, flooring, adding half bath, finishing basement.

“The more you find out, the more you find out you need to know” - Rob Kiyosaki

@Eury Vargas Can you recommend someone?