All Forum Posts by: Johnnie Bembry

Hello BiggerPockets Family,

I'm putting together my plan to BRRR a property. Can you look at my plan below and provide input? My biggest question is whether I'm legally allowed to fund the rehab with a business credit card even though the property is under the LLC, yet. Anyway, whether it's good or bad, any input is appreciated!

1) Secure funding for a property (probably my personal funds)

2) Create an LLC and secure business bank account & credit card

3) Secure a property (in my name)

4) Fund rehab with business credit card

5) Find and place a tenant into the newly renovated property

6) Cash-out refinance the property into LLC

7) Repeat 

I'm thinking about brrr'ing a house and making it available to section 8. I've heard a little good and a lot of bad from others outside this forum about section 8 so I'm seeking other opinions here. If you have any experience in dealing with section 8 & its tenants, what was your experience like? Also, what was the process of getting your house approved for section 8 like? Thanks in advance! 

Hey @Bellman Tumasang, I'd start with a secured credit card. This is usually for people without credit or bad credit, meant to help build credit. If there's something your wanting to purchase then maybe a low amount personal loan (w/co-signer) and just pay that down every month. Lastly, you could ask your parents to make you an authorized user on one of their credit cards too. All these will help build your credit score. I've also included a breakdown of what makes up your credit score. 

Good morning BP, 

Can I buy a property with a conventional loan from one bank then cash-out refinance with another bank? 

In my scenario, I found a bank (Navy Federal) that is willing do to a $40K mortgage but they only have a HELOC option and no cash-out refinance option. The ARV of the property is $70K-$75K so I'm trying to rehab it then cash-out refinance to get my money out and repeat. (The first bank also has a 6-12 month seasoning period, case by case basis, according to the loan officer.) This would be my first property so I want to make sure I'm able to refinance and repeat. Thanks in advance for your help!

@Emile Plas This sounds like seller financing so I'd simply offer better terms. If he/she declines, I'd think about your finances. Would you have anything in the reserves just in case something went wrong (it will)? 

@Drew Whitney I use this site https://www.calculator.net/rental-property-calculator.html as it seems to flow quicker than BP's but it's also pretty basic. On a different note, I feel like spending the time calculating deals is a great education piece. 

@Jake Burgdorf Newbie here but I'd say the biggest things are educating yourself (Bigger Pockets, YouTube, Books, etc.), practicing analyzing deals (daily), start looking at building a team, and raising the funds for your future property. Lastly, don't take a bad deal just to get your first property but also don't get analysis paralysis.  

I'm also a newbie so take my thoughts lightly but in my opinion this isn't a good deal. After your mortgage payment, taxes, vacancy (5%) and assuming you're using a property manager (10% of rent), saving for CAPEX (I used 10% of rent) and other maintenance costs (5% of rent) the cash flow would be less than $100. The $500 insurance a month/$6,000 per year is a killer! I think BP has their own calculator for buy and holds so I'd try that too. I personally like Brandon Turner's 12% CoC return and $100 per door rule of thumb for multi-family properties but I also thinks it's subjective to many variables.

I'm looking for Detroit realtors, lenders and contractors. Could you guys provide any recommendations? Thanks in advance! 

@Justin Tahilramani Good point, I updated my post (thanks) but small cities, between 10k-12k people.