All Forum Posts by: Lauryn Meadows

Hey everyone!

So I've talked to some lenders in regards to the BRRRR strategy. I've done this with an 8 unit over the last 12 months and once this deal is wrapped up we are really wanting to scale our business.

The bank I’ve done the 8 unit deal is wanting me to take it “slow” and let the new loan season before I take on more debt. Another bank I’ve spoke to will only do one loan at a time- so one deal at a time. Which could hinder my ability to scale. I’d like to go from 8 to 60 units by the end of 2020.

I'll have an $82,000 HELOC to utilize as my down payment, but I want to recycle this money and not get it stuck in a deal.

Another bank I spoke to said that banks aren’t doing cash out Refis in our area, and that big banks are buying up a lot of the smaller banks and calling “due” anyone that has these portfolio loans on 5 year balloons. Leaving investors in bad situations. Luckily, I don’t have any balloon notes at this time.

Are you guys working with local lenders for the cash out portion, seasoning periods and are you utilizing your own cash for the renovation or using hard money lenders?

@George Blower my family remember has mentioned and done some light research on ROBs. I believe once he actually cashed out or rolled over his 401k he’d be working primary in the investing business. However I doubt he’d allocate a salary at first. Does that make a difference?

@George Blower thank you so much for all of this info! I’m going to pass it along.

@Justin Windham thank you for this great info!

@Steve Vaughan I was just thinking the same thing. I had the same issue last year when I was laid off from my W2. Good point!

Also he’s looking for a tax strategist/ financial planner (one that knows real estate) in his area as well.

Hello BP! I have a family member looking wanting to exit his corporate job and start investing in RE. He has $1m+ in his 401k. What are the best tax strategies to mitigate the tax burden and avoid the 10% hit on being under age 55?

Hey Michael! That is what we are doing now (value-add) and then refinancing on a portfolio loan. I love the model! If I could do that with all of the multi families in my market in good areas I would. I guess my concern is, not finding a property soon enough. I want to keep the ball rolling. In this case, I'm considering building four unit multis. Also, If i do them one at a time I will still have flexibility to buy other properties at the same time. 

I'm interested in learning more about building small multi families in my market. I appreciate any feedback. Here is my idea: Buy a large enough piece of land to handle the project I'm planning, build multiple small multi family buildings on land. From a financing perspective, I'm wondering if I can buy said land, then build a four plex on the land on one loan. Do 10 of these on 10 separate loans and have forty units when it's all said and done. I have built my primary residence using subcontractors. This allowed me to come in 80% LTV and finance 100% of the loan at the end of the day. Of course, I started with the 20% start up costs but was reimbursed that at the end. This was with a local bank on a 20 year note.

I’m in a rural market where income is below the national average. There are a lot of slumlords in my area. We’ve done value-add to this point and have not had problems filling our properties with qualified tenants.

There is another investor building small SFH in clusters (basically square boxes-nothing fancy but new) and renting them out about $100 above market rent.

Now, here are my questions..

Is there a residential fannie/ Freddie loan that can get this done? If I can get a 30 year loan to increase cash flow that’d be great.

What census data should I be looking at for developments? What are long term pros and cons?

Could it be that people really want a nice place to rent but there just aren’t nice (by nice I mean C and B class properties) to rent?

What am I overlooking?

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We’ll financially be ready to start another project in June and I’d like to keep the ball rolling. In the mean time I do have mailers for small to medium sized multis going out.

Note: I know I’ll need a strong construction SOW and land costs to figure costs, value, cash flow, etc

I was listening to a podcast where FIG was being interviewed. I really like part of their business model.

With that being said, what 30 year fix rate loans are out there for new construction? I’d like to build ten four plexes on a lot. One four plex at a time and on different loans. That way I’m not over extending myself by developing them all at the same time.

Also, let's say my husband works as the GC and we come in at 80% LTV. Can we finance the 80% and at the end of the day not have a DP?

I've done a construction loan on my personal residence before and I had to start with my 20% down payment to start the construction then the bank would lend the other 80%. However, we subbed out all of the work and was able to finish the project at 80% LTV so our last 20% draw was ours to keep. Is there any Frannie/ Freddie products like this aside from the FHA owner occupant loans? We will not be occupying them.

I’m pretty sure my local bank would do this but on a 20 year portfolio loan. If I can maximize the 10 mortgages rule with frannie/ Freddy in a construction zone like this I’d like to build 10 of these on separate loans.

Thoughts? What loan product do I need?

Thanks!