All Forum Posts by: Jon Reed

The first question you should always ask is for three recent references. If the contractor can not confidently direct you to three people he has recently worked with who would talk positively about him then there is no reason to ask any more questions.

Try talking to a few local banks. They will be much more likely to loan on fixer uppers. For example, a few local banks in my area will cover 90% of purchase price and 100% of renovation costs as long as the total principal of the loan is less than 80% ARV.

So, you would have the home under your personal name to get the FHA loan. You would then make an LLC to manage the rental side of the home. You would be 'hiring' the LLC you created to manage the property.

There is nothing shady or illegal with having an LLC to manage the property while having it titled under your personal name.

What is the strategy you are using on this home? Are you doing a live-in flip? 

Also... do the math.. see what the ROI is for adding a bathroom and making it into a studio. Also check out your zoning in the area and see if you can actually turn that home into a duplex. You may also run into issues with utilities since they are all going to be grouped together, or were you also looking into splitting all the utilities?

Hello! 

I am not a lawyer so first up... go ask a lawyer in your area about any weird local laws you need to be aware of.

Second, get an LLC and make you and your partner 50/50 owners of the LLC. Then have all leases written up to the LLC. Problem solved + some extra liability protection.

BRRRR (with cash from grandma or somewhere) that property then if you really can do it for $40K + $2K in reno costs then refi it out at $76.8K.

However.... What do you plan on doing to the home for $2,000 and taking 2-3 months? That is a SUPER small budget... Just painting a small 900 sq/ft home will cost $400 in materials alone. 

Simple. You make it happen.

Find out why you can't make it happen then make a plan to overcome that issue.

All depends on your situations...

Do you have enough cash to cover the renovation costs? What are the renovation costs?

How much interest would your grandmother charger? Would she want to/able to cover purchase price + renovation costs?

How long do you plan on living in this home? Is this going to be a live-in flip or a long-term personal residence?

How risk adverse are you?

How much time do you plan the renovation to take? Are you going to be doing it yourself or finding sub contractors or hiring a GC to run the job?

You haven't talked to enough local banks then. Our local bank actually does 10% down on the purchase price and finances 100% of the renovation cost as long as total debt on the property is 80% of the renovated value of the home.

It took some hard work to find the bank that offers the best deals but they are out there and worth it!

I would be excited to hear how someone with limited cash/creidt, no hard money, and no private money, no partnerships were able to scale much faster than your plan. You are always going to be limited by the amount of capital you have access to (either from HELOC, savings, or outside investors/partners).

I would suggest interviewing local banks to see if any of them would be willing to get rid of the 6 month seasoning period. I found a local bank that will refi out our BRRRR properties as soon as we want, as long as we have a renter in place. So that can cut down your time between BRRRRs from 6 months to just 2 months (depending on how quickly you rehab and rent out the units).