All Forum Posts by: Steve LeBlanc

Steve LeBlanc has started 9 posts and replied 71 times.

Originally posted by @Shiloh Lundahl:

@Steve LeBlanc here is the follow up if you are interested:

Purchased 7/11/20 just leased out 8/20/20.

Link on Zillow https://www.zillow.com/homedet...

Purchase 160k including closing costs

Rehab and holding costs 35k

Total in 195k

Option fee 5k

Loan from bank 160k (plus 5k fee for closing costs) appraisal came in at 230k

Loan from private investor for second position 24k

Total out of pocket (195 - 5 - 160 + 5 - 24) 11k

Rent $1350

Mortgage $750

Taxes $50

Insurance $40

Repairs/maintenance/Cap ex/vacancy/turn over 0 (As you can see, the property was just finished with the rehab and it doesn’t need any repairs nor will it need any cap ex within the next few years. Also, as lease option tenants they take care of the property and the maintenance. Additionally, their lease is for 3 years and I doubt that it would become vacant but if it were to become vacant, then I would be able to just recoup any turn over costs with the next option fee).

Second position lender gets $200

Cash flow $310

Cash on cash return 310 x 12 = 3720/11000 = 34%

Lease option sales price $239,900.

Total estimated return if the tenant were to exercise the lease option the last month of the 3-year option period 239,900 - 151,000 loan balance - 24,000 - second position note + 11,100 (310 x 12 x 3) for cash flow = 76,000.

IRR over 3 years would be 76000/3/11000 = 230% per year.

Thank you for sharing that Shiloh. Indeed, the numbers look really good.

0 Votes

Here's a happy update on Ron and Sherri Wilson from the U.S. Department of Justice:

United States v. Defendant(s) Ronald Wilson, Sherri Wilson
Case Number 2018R00108 and Court Docket Number 19-CR-00410

Defendant Ronald Wilson was sentenced by the Court. The Court ordered the defendant to the following:

Incarceration of 7 year(s) 6 month(s)
Followed by Supervised Release of 3 year(s)

3 Votes

Here's a happy update on Ron Wilson from the U.S. Department of Justice:

United States v. Defendant(s) Ronald Wilson, Sherri Wilson
Case Number 2018R00108 and Court Docket Number 19-CR-00410

Defendant Ronald Wilson was sentenced by the Court. The Court ordered the defendant to the following:

Incarceration of 7 year(s) 6 month(s)
Followed by Supervised Release of 3 year(s)

2 Votes

Originally posted by @Brett Tvenge:

@Steve LeBlanc do any of these products have no seasoning requirements?

I've found that few have seasoning requirements as long as it was a cash purchase.

0 Votes

Originally posted by @Wendy Harden:

@James Free I went through Midwest Equity Mortgage

Just wanted to do some follow-up. Response from Midwest Equity Mortgage:

"my Chief of Cap Markets got back with me this afternoon, he says we don’t have an outlet for this product at this time."

0 Votes

I clearly struck a nerve @Shiloh Lundahl. My apologies, wasn't my intention. I certainly do not claim to be an expert, but do have 13 years experience in the Phoenix market as well as nationally. This is by no means my core field, I just do this for fun.

Most deals that people share can use a little "debunking" because they are rarely 100% genuine. Yours was perfect, I simply added some more clarity for the audience because those little details like the lease option are pretty key in doing calculations, as I showed.

And you're right, I did want to know where people were able to find cash out refi opportunities. Your deal admittedly caught my attention because Phoenix is hardly a cash-flowing market (it's an appreciating market). UNLESS, you're in the very distressed areas, like the one example you shared. And that's not a dig...at all, C-class almost always cash flows well and I share in your strategy in other markets.

Many, if not most lenders, are not doing multi-family cash outs under $300k, $400k, $500, etc.

My particular deals that drove me to start the thread are around the $140K mark (4-plex) renting for $500/door.

And there is nothing wrong with Netflix, sir.

0 Votes

Originally posted by @Shiloh Lundahl:

@Steve LeBlanc I just closed a property with my daughter yesterday.
Purchase price (including closing costs) $160k
Rehab 20K
ARV 213k
Sell on the lease option for 225k with a 4K option fee
Get a long term loan for 160k
Monthly Lease Payment $1350
mortgage (4%, 30 years) $760
Taxes and insurance $140
Tenant takes care of repairs and maintenance 0
Because it is a lease option managing the property is minimal 0
Monthly cash flow $450
total that I have left into the property after refinancing 20k

ROI (450 x 12 = $5400 / 20000) 27%

If I bring in a second position lender for 10k at 10% for 3 years, then my cash flow would go down by $83 a month but my ROI would go to 54%. With 30k created in equity.

This isn’t really one of my better deals. It’s just the one I picked up yesterday.

Looking at the property, I would be shocked that it rents for $1350 especially in that neighborhood (also indicated by the annual taxes of $530 and low insurance). But, okay, you collect $1350 in rent.

I would agree that you have a great cash flow opportunity there...but structured quite differently than most scenarios in that you have the lease option.

Whereas for me, I'd have ~10% cost in a PM and another ~10% in set asides for mx/vacancy bringing ROI to about 10%. I noticed you didn't add any closing costs into your cash out of pocket calculation...which still counts.

More realistic numbers in that scenario are:

$450 cash flow

minus $135 for PM

minus $135 for set asides

Remaining CF: $180/month x 12 months equals $2160 annually divided by $23000 (including some closing costs, lenders and title don't work for free unfortunately)...ROI = 9%

0 Votes

Originally posted by @Sean Julian:

@Steve LeBlanc

Have you tried PenFed? $100 gets you a savings account and $500 gets you no fees. Then they were willing to do an 80% cash out down to $50K loan as long as I held the place for 6 months. It might be worth a call. They are all over the US. I invest out of state.

https://www.penfed.org/mortgage-center

As of 13 July, PenFed is not doing investment properties.

2 Votes

As you can see from the thread, it's not that easy to find "suitable" or "efficient" cash out refinancing for investment properties that are excellent opportunities, but "too small" for many lenders to take on.

2 Votes

@Patrick McGrath with what lender?

0 Votes

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All Forum Posts by: Steve LeBlanc

Steve LeBlanc has started 9 posts and replied 71 times.

Post: Where Are You Getting Your Cash Out Refinance Today?

Post: Steve Haight/Linda Labbe/Toledo Scam/Seirra Real Estate Services

Post: Ronald Wilson (Ron) & Sierra Real Estate Services, Toledo OH

Post: Where Are You Getting Your Cash Out Refinance Today?

Post: Where Are You Getting Your Cash Out Refinance Today?

Post: Where Are You Getting Your Cash Out Refinance Today?

Post: Where Are You Getting Your Cash Out Refinance Today?

Post: Where Are You Getting Your Cash Out Refinance Today?

Post: Where Are You Getting Your Cash Out Refinance Today?

Post: Where Are You Getting Your Cash Out Refinance Today?