All Forum Posts by: Joe Mueller

Private lenders: All over. Co-workers, friends, family, bigger pockets...

If it's a profitable scenario, investors will be interested.

Joe

Get away from this lender !

In most communities around me one could call the building or code enforcement depts and ask their thoughts on it. Or file a FOIA and see if something comes up. Maybe try calling? If it's not looking good you may want to avoid the property all together.

Hi Mike- hard money may bleed all your upside out of the deal depending on what your projected ARV and exit strategy is at even some of the lower rates I have seen between 9-14%. You may be better offer partnering up with a private lender with a potential equitable interest in order to get the deal done -- unless you're confident you can get 52 units done very quickly. What about having the seller finance the transaction on a shorter term note while you fund the repairs and then refi out?

I agree with Jonathan M. Try the harp program, it's designed for situations just like this, and from what I understand of it, can remove negative equity based on what other properties are valued at on the appraisal.

The key factor is, you need to refi the home before you rent it out, as the benefits reduce for non-owner occupied properties to the point it may not be worth it.

That said, I found myself in a similar situation 2 years ago, living in a 3/2 in a nice area that was growing too small for my family. We were about $50k under water based on comps.

I found a great new home, rented out mine, and moved out to our new home. As I expand upon my contacts in investing, I met a mortgage broker who recommended the Harp program for my 3/2 that I had rented out at $1550 a month. Unfortunately, because I no longer occupied it, the rate/payment was only reduced slightly less that the current payment, but also reset the amortization clock back to 30 years, so I opted to keep my payment the same, and keep it as a rental, even though I was losing just a touch of money per month.

So far it's been great, as I screened hard and got a great tenant who has been there since we moved out, and every month that goes by, I know I got into a much better opportunity, gained equity in the purchase of my new house which was a great deal, and the mortgage gets paid down. It's another property in my portfolio, and soon I may be able to refinance it out for more favorable terms.

You gain wealth by owning property they say right?

Good luck in your future endeavors.

Joe

We will see if the boys let that one stick ;)

Jim-

Welcome to BP, make sure you listen to the podcasts and good luck!

Out in the northwest burbs... Originally Hoffman Estates/Barrington/Palatine. Current selling and investing in Elgin/Algonquin/Cville area.

Welcome to the best group of investors around!

What a great story. Motivational.

Thanks for sharing

Joe