All Forum Posts by: Fred Ramos

Michael, not that I've done it because I am not there yet but from my understanding you could try multi-family (5+ units). With $150k (20% of $750K) to play with and a good history of property management i would think you would qualify. From what I've read and heard, financing on multi-family is based more on the projected performance of the property than that of the borrower. hope this helps. good Luck!!

Welcome Niki. My wife and I invest here in Denton as well...Let us know if you plan on doing any wholesale deals here. Good luck!

Douglas, Like Elisha stated Rent minus mortgage does not equal cash flow.

don't forget to factor in PITI (principal, interest, taxes and insurance) as well as kitty for repairs (50% Rule).

The main thing I see here is that yes, low income housing can be acquired at very reasonable prices and from my experience, they will cash flow well....However....keep in mind that you will be dealing with different types of tenants as well. Not to knock anyone or be stereotypical but there is a difference between the types of people that will show up to rent a $500 a month unit versus a $750 a month unit in the same town.

Sure, you could rent to section 8 (some have found success with it) but in my opinion, tenants that have to pay the rent out their own pocket will be more respectful of the property (Most times)......Just my 2 cents.

Based on the numbers you posted of $160K (Low Side) ARV, A hard money lender could loan you 65% (flip, 70% for buy and hold) of ARV ($104K). With That, The only money you will need out of pocket is anything over $104K. this will negate the 20% down requirement and means less out of your pocket. This is a true definition of OPM :)

besides, like others have said, most banks won't give you a conventional loan on a rehab project.

Sally, You should be able to find a lender to loan on a buy and hold property with 20% down (even on an investment). This generally applies to the first 4 mortgages that you hold. on the 5th, the requirement jumps up to 25-30%.

Hope this helps.

Looks like extremely high rates to me as well. Make sure to follow up on what David suggests to work out a better situation for yourself....besides, David's numbers look more in line with what is usually available.

As you probably already know, it's going to be tough burning the candle at both ends. I wish you nothing but success young man!

Congrats Eric!!..Always nice to see someone succeed.

Sounds like you've picked up a little experience and hopefully it will serve you well.

Some things to consider:

you didn't mention how long this rehab will take.

1. Did you factor in all of your hard Money costs?

2. How long is the HML good for?

3. Are you being charged interest on the full HML or just as you pull it?

4. have you factored hard money lender inspection fees, how many inspections will they be doing?

5. Are you doing the work or do you have a contractor?

6. if you're doing most of the work (because you can), how much longer is it going to take you to complete the project?

7. Are you also working a full time job?

Also, J Scott makes some very good points, think about them deeply.

looking forward to reading on your progress! Keep us posted!

25-30% down comes on your 5th mortgage....20% on first 4.

Check into reputable Hard money or private lenders....they will usually

loan between 65-70% of ARV. High origination fees(usually 3-4%) and high interest (12-16% Interest only) and usually 3-12 months.

If it's a flip and you're buying low with a high ARV, this may be an option to consider.

If it's going to be a flip, this tells me that the unit requires repairs/updates.

most traditional lenders will not lend on a house that is not ready.

Do you have more than one exit strategy? You may want to consider the possibility of holding (not with hard money) if the unit can't be sold in a reasonable amount of time.

not a flipper, just my thoughts ;)

way too long of a period so whoever it is will have no motivation to move them quickly.....10 days max.

Sam,...Should have sent him a 3 day notice to vacate on the 5th....filed for eviction on the 8th.

Hopefully it states in your lease that he/she would be responsible for legal charges associated with the eviction.

Sometimes...the 3 day notice performs miracles.

If he's paid up to date, it's too late for you to do anything about it since you accepted his money. But if (when) it happens again, just let the due process take it's course. follow all the rules of an eviction and you should have no problem. By the way, if/when it comes down to that, schedule a damages hearing for a day or two after the eviction date. this means that should they do any damage to the property, you will get a judgement against them for the amount of repairs. hard part of that though is actually collecting (They can't pay the rent for a reason).

Hope this helps.

I think I have a pretty good insurance man here in the DFW area...has really saved us some money on our properties.
Try Ryan Morgan with TWG Insurance...214-838-5408...He works with multiple carriers....good luck.