All Forum Posts by: Keith Shadle

Bump for contact info!  Thanks for letting all know...even when found out about 3 years later:)

@Timothy Hero. PM sent.

Roger that.  Many thanks @Josh Caldwell $ @George Despotopoulos.   Was thinking more "mom and pop" style investors to avoid larger constraints by traditional lenders and no 6 month mark on anything or heavy underwriting.  Got a family member on one in first position making 9%.  Thinking there could be others that would want similar.  I can see how this upcoming November could be a wild card for some.

Hello,

Do more seasoned investors use Private Money to "fund" their deals after a purchase?  Or, Refi their money back out after the deal has been closed in cash?

Seems doable and easier than paying a large private money operation 2 points, 6% and a 5-4-3-2-1% early termination fee.  Anyone use individual or small org private money at say 9% for 6-8 months to cash themselves out of a deal they already own?

I have two properties I was able to pull down, partly because I was able to move fast with my own cash and not hunt for a lender. My DTI is not great but the properties cash flow is. I should be able to refi after 6months...but I don't want to wait & don't want to do delayed financing at the moment either. Local banks don't seem to want to lend to a out of state investor either (Indy investments and I'm in San Diego). Want to use the velocity of money and keep going!

Having an already cash flowing property (which I do) that can cover the higher interest payment for short term seems like an easier sell for a possible private lender rather than a deal that "looks like it could work."  Could be a way to start growing your money network??

Drawbacks I am seeing are title company fees putting the lender in 1st position for a period of time before you put better debt on the property and then cash them out.  

Do folks do this, or am I thinking too hard?   Thanks!

Keith

I worked with Bank of England on my first Indy BRRRR and used Delayed Financing. That was almost two years ago and rate was 4.75. Probably much lower now.

Any options with Private Money cashing you out?...if that is even a thing?  Would pay a higher interest only payment for X amount of time (6 months???)...then refi with a conventional lender after 6 months for more options and much better rates.  Just a thought.  Do folks do this?

Hi @Jibu V., If I estimated that high I would have had to take that much more out of my HELOC, which I would be paying interest on. I don't want to pay interest on $ I'm not going to use. Though I would be able to get unused or excess funds back from title company with no issue. Did that on my 3rd purchase.

Having only 15k in there kept me to it too.  I had 20 or 25k, it would have been easy to spend and then my #'s would not have worked out. 

Thanks for the question!:)

No problem @Vincent E peters!  Glad it could help.  Once I got the financing streight in my head it helped for sure.  Good to see you are in SD!

@Shimon P. The $15,000 is what I used for rehab.  I should have stated that I was lucky in guesstimating that amount as it was a tad over $15k when all said and done (+/- a few hundred).

The title company held it because I deposited it along with the purchase price of the home at the time of closing.  So when I refinanced the bank wound not just see the purchase price...but the purchase price + the $15k that I added.  That was the new purchase price.  I was able to pull that $15k back out again at month 5ish.

I paid the individual contractors with my credit card.  Paid myself back and paid off the credit card when taking draws on the $15k held by the title company.  Hope this helps!

Many thanks @Jimmy Hodges, @Aaron Ward, @Yolanda Branham:)  5 min after I got the offer accepted a weight sort of lifted off my shoulders.  "That wasn't so bad" I thought.

Yessir @Alexander Felice! You and other BP Bigs are virtual mentors to many upon many of others looking for ways to learn and grow. Very thankful for episode #301. I was literally was zooming in on one of your HUD's from the deal posts on your site, making sure I got the line # correct, when talking to the title company. Ha!

Thanks again @Alex Keathley! Would love to get my cash out months earlier and not have to worry about DSCR and other factors! I went with a Fanny/Freddy bank to get the best rates, though thought that was the only option for me at the time.

Portfolio lenders can lend to individuals who invest in out of state properties? I have a LLC as well so maybe that will help.

Due to Covid my sea days have been drastically reduced.  This will be reflected in my monthly W2 and will make it harder to refi my other two properties I assume.  So I am all ears to other options!  Thanks:)

Thanks @Nicholas L. 

Yes, based on the photos of this particular property vs others I felt confident purchasing based just on photos.  I could wrap my head around carpet & paint.  Not so much with walls and basement fixes.  This property had neither of those issues.

I did feel the purchase price was very reasonable.  Was not the best area but I needed one under my belt.

It was a 4 bedroom which helped a ton as well and the siding on the house looked good and needed no updating, again helping with my decision.

I also looked at Tax Assessed Value of the property (go here for Indy: https://www.indy.gov/workflow/...) and it came back at $43,200.  So my purchase price was less than assessed so that was good in my eyes and again helped as well.   

Though caveat...my second purchase (soon after this one as I had motivation) I got burned on due to relying too much on Tax Assessed Value.  Duplex was tax assessed at $110k.  I bought at $80k and put $30k in leaving me all in for = to the Tax Assessed.  Surely the appraisal would come in higher than tax assessed value???....nope.  $89,000.  I should write it up in another post or something so others won't get similarly stung.  Got half way to fixing the issue though:)))