All Forum Posts by: Kerry Baird

Yes, you can use HELOC or HEL (Home Equity Loan) funds for down payments, and then rehab, put a tenant in place, and do a delayed-refinance.

Search for "Mike H." who has used this strategy and moved from just a handful of properties to 50 in the past 3 years.  I love his story!

As I see it, you can sell the properties and buy multi.  You can refinance properties and buy multi.  You can 1031 exchange into multi.

Yes, you can bundle a number of properties into one loan.  A number of lenders are advertising this.  I've talked with Aaron Chapman at National Security Mortgage.  Colony American, Civic, B2R are other names to look into.  

And hopefully @Jeff B. will chime in again with more guidance.  

As a smaller property owner (have 5 SFRs in my own portfolio and 10 in JV) I had not collected all of this information in one place. It has been eye-opening to look at the trends going back. In fact, it is interesting that your numbers validate the old "50%" expenses rule of thumb.

In addition to looking at these expenses as part of the purchase analysis process, as you suggest in this post, I am having to pull this information as we are aiming to submit it to a lender for a possible refinance.  

Additionally, I had never considered doing a regular assessment of value, and so did not build those costs in.  Great idea!  

This prompts me to consider "best practices" with regards to refinance vs selling. I'm wondering what sort of criteria you use in counseling an owner to sell vs refinance a property. Would that be at a certain loan to value ratio? Or a when certain amount of depreciation has been used? Or some other metric of performance, such as COC or ROI.

Your post prompts me to think of another "new investor mistake." We should determine in advance the end-point of our investments.  Is it "pay down and hold forever?"  Or refinance at x% of equity?  Sell when such and such condition is met?

I appreciate your post.

Don't know about Navy Federal, but my last two loans were with the same bank. One was for an investment property, while the other was a VA owner occupied. The lender wanted to see all bank and credit statements going back 3 months. They wanted to see the transfer of funds from the house we sold in the UK and they wanted to "see" each transfer on the "from" side and then to the "to" side. I had to do some screen shots for them. Also, the underwriters insisted that we close our oldest and largest credit card, and wanted to see all of the electronic documentation for that.

In regards to Navy Federal, I would love you to post back what you find.  

All the best~

When I left my job in the military, I had just bought Land Rover and had a high car payment that put us upside down financially; this was motivation for me to take massive action to create some immediate income.  We'd already purchased rentals in the slow-and-steady manner, so real estate was not foreign to me.  However, doing real estate creatively was foreign.  

With very little money, but a lot of motivation, this is what happened: I started doing direct mail to households in pre-foreclosure. I found addresses in the local paper and mailed them, but there are also a number of services to buy lists. I didn't have the cash to buy a list back then. I printed up iron-on t-shirts and door hangers, put flyers on cars at K-Mart, all saying "We Buy Houses." I found a partner at my local REIA and together we went door-knocking the houses that were heading to auction. The phone began to ring; I went out immediately to talk with potential sellers. We were able to buy a number of houses subject-to the existing financing. I stopped looking to the MLS for deals.

As to the money side of things, I rehabbed the houses using a couple different credit cards, with a goal to turn them around in 3 months.  I did need funds to bring most of the loans current, to stop the foreclosure, and to provide moving money (first and last month rent).  In one case, the seller was very motivated due to a recent divorce, and was not yet late on her payment but was fearful she would be.  She wanted to be rid of the house immediately and sold it to me for $10. The house was missing one strip of tile in the kitchen and otherwise was pristine. I had a buyer waiting for that house.  

In one case, I worked a short sale directly, and paid a few thousand dollars for a second mortgage that was worth $15k.  Because they would be wiped out at auction, the second was willing to take something vs nothing. This contributed to profits on that deal.  We rehabbed it and sold.  

It *can* be done.  You must take massive action.  And bad stuff could have happened...I took bigger risks than I would take now that I am older/wiser.  

Look at my profile...there are a number of sub-2 deals.  But, they could have been hard money deals, or lease option deals just as easily.  Learn how to use these "tools" in real estate: direct mail, lease options, subject to, hard money.  

Congratulations on your success!  While it is difficult to invest from APO, AE, it isn't impossible. Great job finding a way to partner up on deals.  Keep blazing a path for others!

I started replacing carpet with an Allure type of laminate, during tenant turnover.  Your area may "require" carpets, due to tenant expectations.  I hope that this flooring lasts longer than carpet.  If you are curious, search the forums for "hardening rentals" or similar terms.

There are a number of us who have walked a similar path.  First, start with where you are: Clean up or improve your credit, work on saving.  You'll always need funds for down payments, or for reserves (often 3 to 6 months of payments for your mortgages, set aside), or for rehab funds.  We bought our first home as a young military to military couple, in England.  We also bought our last house in England, and three houses back in the US, while over in the UK.  

I recommend you read Mike Summey's Weekend Millionaire's Secrets to Investing in Real Estate, for learning how to buy based upon NOI, and grow wealth with buy and hold. Also, Keller's Millionaire Real Estate Investor...and FLIP. You want to see what inspires you. We have lived in fixers and improved them over time, we have flipped, we have fixed-rented and then sold to our tenants, and we have done buy-and-holds. Now, nearing the end of the career, we are using the "debt snowball" to pay down and then pay off the properties we still hold.

Be sure to set up alerts, look for real estate investing meetups, clubs or REIAs.  And dig into the podcasts, if you haven't already.  There are nuggets of gold in those podcasts.  All the best~

My hubby and I attend a every-other-week meetup down in Palm Bay.  This helps us to network, and visit with like-minded individuals.  We support those who are doing deals, and encourage those who want to be doing deals.  Occasionally, we view properties others are working on.  And every once in a while, our house is the location of a couple of fierce CashFlow games.  Drop me a note if you want more information.  ~Kerry

We waited a long time before we used the VA. We saved up down payments and used conventional loans, using our dollars for investment properties first. Then used the VA.

Here's what I know about them; there are many lenders here who will chime in and can offer you current rates.  

You need to order your certificate of eligibility. You can go up to 4 units, and must owner-occupy for at least a year. If you have a spouse or friend with another VA eligibility, it is possible to combine them for a total of 8 units. We had to have 5 years left on the roof, and if our roof had been any worse, we couldn't close with the VA on our current house. So the program is not intended for heavier fixers.

We also had to demonstrate with a letter from our command that we had steady future income, so it is more difficult (but not impossible) at the very end of a career.  A bank makes the loan, and the veteran's administration backs the loan, so you still need to qualify with the bank.