All Forum Posts by: Ko Kashiwagi

Hi AJ,

Definitely best to speak to an attorney but I have seen many investors use their unused LLC (that was previous for other purposes) for their real estate purchases so it's not an uncommon practice. If you are going to obtain financing, many lenders will want to see that the LLC is for real estate purpose, so you may need to amend a few things like the operating agreement but it shouldn't be a huge hassle.

Unless you need the business history for a specific reason though, it would be less risk if you just dissolve it, then open up a new LLC that is real estate purchase.

Hi Jacob,

In most cases a cash out refi would be the option here because it's paid off (so it's not like you have a low interest first position) and most lenders don't touch HELOC on investments anyways. Cash Out refi would have a lower rate, lower payments and usually higher leverage.

LOC is used in very specific situations, typically for short term uses as well.

Hi Radhika,

It sounds like it's a matter of comps - whether other student rentals are doing the 1-3 points. You could check out other student rentals and call the PM managing those as these questions are market specific.

Hi Logan,

Was the budget in line with the original scope of work and was the ARV in line with your original expectation?

In looks like you're doing deals in Austin which I heard has taken a huge downturn but if your budget & ARV was close to what you expected the biggest factor you can change is the purchase price. Not sure how flippers calculate margins in that area but generally most investors look to purchase at ARV times 0.75-0.8 minus the costs (rehab budget, commissions fees) to make enough profit. So in this case something like:

$605,000 x 0.75 - (costs) = Purchase price

$605,000 x 0.80 - (costs) = Purchase price

Welcome and love hearing these ambitious plans!

With your house hack & remodel experience most likely will be a great foundation for your future deals. If you are comfortable with the risks, continuing to do those value add deals will expedite your portfolio growth!

Hi Matthew,

If you have the freedom to down size and sell the house & make the sacrifice, I don't think it's crazy at all. I would look into leveraging the house before going all in for selling (HELOCs, refinances) & renting the house out (if it debt covers) because you would have to pay commissions and taxes on that sell.

If your background is in residential then it's probably an easier transfer of skills to do 2-4 units than trying to get into true commercial MFH. The barrier to entry in my opinion is much lower in most markets for 2-4 units than commercial too. You can always change your strategy down the line if conditions change.

Hi Evan,

Some DSCR lenders will require it to be signed in US, but not all - I've closed DSCR with clients in foreign countries. Typically they need to sign at the US embassy. You could navigate all of this if your partner lives in the US, and you make him the sole guarantor with title vested under the LLC (you'll need to get a LLC for this structure).

LLC vesting is not required as there are programs that will allow personal name vesting, but it will slightly limit your options.

I would watch out to confirm important info by double checking in writing, checking their reviews and making sure everything is documented. For example whether you can sign in the US or not - I've seen so many clients get told one thing by a lender and get overpromised recently.

Hi Jason.

In most cases this would be two separate loans with the purchase and refinance. Purchase with cash or with construction loan, then a take our refinance. Where is this property located? Depending on rurality that would change whether to go institutional or local bank too.

Hi Raj,

Congratulations on getting under contract! The two inspection should cover 90% of the due diligence items, but it's a great idea to look into it deep. The big ticket items you'd need be cautious are:

If the inspector mentions a specific issue that they are not specialized in, you can get specialists to take a look. For example, if they note a potential issue with HVAC, you can get a HVAC company to check it for you. On top of the inspection, you can have other layers of due diligence with title, survey and appraisal.

I get deals sent in Palm Springs and Joshua Tree all the time. DMed you