All Forum Posts by: Kevin Woodard

I've heard up to 75% ARV for fix and hold deals. I haven't seen 80% though, not to say it doesn't exist.

If your intent is to live there then this shouldn’t be an issue. If your intent from the onset was to rent out all units then I am sure this meets some definition of fraud. 

Hi Nathan, are you looking to occupy the units? You may get competitive rates with those shops, but the quality of the product will vary. I’m in the process of doing the same and would be happy to help and share what has been helpful for me. 

I can't speak for all lenders but I would suspect the vast majority of lenders will require that you have an LLC. It comes down to various laws surrounding who/what can lend money to who/what. Loans made to a business fall outside of certain laws jurisdictions.

What state are you operating in? I know a lender that does JV deals with wholesalers out of California, I'd gladly put you two in touch.

If there is a rehab component, you could use a bridge loan with a construction component (fix and flip loan) once you have that ARV where you want it. Refinance and minimize cash in the deal and thus increase your ROI. Everything can be done in the LLC's name.

You and your partner should put together an agreement with the terms of the partnership. 

In the menu of BiggerPockets there’s a network tab that has lenders broken down into a few categories. Just putting it out there of what you’re looking for lenders will reach out. I would also check with local groups and ask any investor in your network. For vetting / screening purposes you can look up license information with: 

NMLS Consumer Access

AAPL Member Lookup

Companies should have a page here on BP that you can search for reviews. 

A refinance is simply that. Refinancing the property that is currently financed, either by you or a third party. You can go rate and term or cash out. With a rate and term you are keeping the equity in the property (or whatever else you’re financing) and simply getting a new, and hopefully better, rate and/or term. Cash out refi is taking out equity from the property which appreciated, however the method of appreciation. 

A HELOC is a type of home equity loan that like Jasmin  mentioned is a line of credit, secured by your property. The rates will most likely be variable so holding it long term may not be advantageous to you.

They are both useful and can work in concert with each other. Let’s say you have a primary and get a HELOC to force appreciation on a distressed property. Now that property is worth more money and you can cash out refinance to pay off the line of credit and walk away with extra funds. Reinvest that capital so on and so forth. They each have their purpose and I wouldn’t necessarily compare them. 

Seth, for starters, good work. It's no small feat to find a property suitable for a BRRRR in today's market.

I’d be more than happy to assist free up some of that equity. 

The lender may ask for historical data to see where the property was. However, the right lender will underwrite the property with current leases and a valuation capturing updated value and market rents. Hope this helps.

P/I would’ve been $1,248 and some change with the numbers you provided, then add in T/I.

Limited supply, extremely cheap money, and an influx of investors will make finding discounted properties more difficult. 

If you have your geographic market known, you have a range of what rents will be, reverse engineer your maximum loan amount and ultimately ARV. From there you can build out what your target property is: purchase price and rehab budget (scope).

If you go the conventional route, scaling in a short amount of time, relatively speaking, may pose an issue. Some investors accept the fact they pay a little more to scale faster. Some want to save and scale slower. All a matter of preference and if you in it for speed or comfort.