All Forum Posts by: Scott Hollister

Hello @Michael Randle,

All lenders have different products. Typically in CT you can get a rehab loan at 12%. They will finance 85% of the purchase price and finance the rehab 100% up to 75% of the ARV.

@Tatiana Gershanovich brings up a valid point, if you want to learn what hard money lenders are looking for then check out my recap of our local BP meet up. We hosted a featured BP HML and we learned some valuable knowledge.

• Side note, there is a HML in CT that will finance up to 75% of ARV with $0 out of pocket. However you have to put up collateral. Be careful because you can lose your collateral with this strategy.

Also, nice stay away from the rehab of a fire home:) haha

Good luck Michael! 

Hello @Jeremy Williams! You have so many great responses on this thread and great advice to chose a path that will work for you in your situation. 

I think @James Masotti hit the head on the nail with his reply. You NEED to change yourself first, no one else will do this for you. 

The best part you ask? 

Is that you CAN do this. 

Most of the advice is along the style of Total Money Makeover, it is $11 dollars shipped on amazon. Check your local thrift store for a copy first. This book will give you great advice on how to climb out of your current situation and into a one of prosperity. 

Stay positive, work hard, be thankful day in and day out. 

If you need help, just ask:)

Hello @Zatch Jason Pouchprom, 

Yes, this strategy is great if you perform an equity play. You have to be able to force appreciation somehow to make your exit strategy work. You have a good "monopoly" mindset, lets see how we can make it work for you. 

1. The goal with Real Estate investing is to become wealthy. The best way to become wealthy is to increase your net worth each month/year. With this strategy you will lose money each time you do this because you're just buying "list price" houses. 
2. This strategy might work if you can find 4 units that cash flow WHILE you're living in the property. (But think exit... we still can't refi out)

You lose money because: 

• You throw away that 3.5% down. That is equity you cannot get back out because your LTV is at 96.5%.
• Closing costs. By the time you close you'll most likely be OVER 100% LTV.

Refinance time:

• This is your exit strategy, a great one IF you had equity. The house you bought was in "livable" condition because FHA loaned you money on it. Lets say your house appreciated 1%-3% over the course of the year. You're still far away from the conventional LTV of 80/20.
• Even if you were able to, refinancing so soon would add in MORE closing costs and you would start a new 30 year note. After a year of paying mostly interest due to the amortization rate:(
• And once you have multiple properties, there are guidelines on reserves. Typically 6 months of mortgage, taxes, insurance. So in addition to all the costs of refinancing you will need another large chunk of money. 

My "newbie" wisdom: 

• Find a way you can force appreciation with the low money down. Fannie May has a loan program, the homestyle that requires only 5% down. With this product you have a better chance of creating equity. That equity play allows you to pull your money back out and repeat the buy, rehab, rent, refinance, repeat strategy and obtain the house with no money out of pocket. 
• Think down the road as well, some banks allow HELOC up to 100% LTV. You can use this, partner with hard money and do the BRRRR strategy. Then do EXACTLY what you said you were going to do with a LOT less hassle of going conventional "list price" FHA homes. (Just a recommendation to get your creative juices flowing)

My advice: 

• If your brand new, then a FHA house hack is an amazing way to get started. Try to live for free while renting out the other units. 
• On the next one, find a way to do that equity play. Force appreciation. There are multiple ways to get this done, partner with someone, hard money, etc. The goal is to pull your money back out. 

Best of luck Zatch! 

Hello @Jeremy Stringham,

Nice appreciation with your home, congrats! Will you be able to sell it for $475k in your market now? 

Moving forward with your Real Estate business. What are your goals? 

• Do you want to fix and flip homes? If so, I would recommend staying in the price range of your first time home buyer. (easier to sell due to larger buying pool)
• How about buy and hold? If so, then build off what you're doing now. Creating appreciation. $650k is plenty of liquid to have multiple projects going at once. (First, build your systems and teams up before you scale larger)
  • Maybe its a mixture of both?
  • Maybe you like the vacation market? There are plenty of different ways to invest in Real Estate. 
• As for finding an agent: call around to your local agents, interview them and see which ones have/currently have rentals or flips. Also, make connections with your REO agents that can feed you deals. Local BP meet-ups:)

The best advice: be boring if you decide to flip, find a niche in your market, use the same materials of quality, make connections, have a team in place, etc. This book is a great resource that has helped me with my rehabs. 

Hello @Dmitriy Dorogan,

Take that 8k as a lesson. Learn from that experience what you can, improve on it next time. I think you're suffering from postpartum investing:) We as humans have this innate ability to look back and reflect on our experiences. My advice would be to focus on your present/future investing, you made money, not the most, but you're in the green. 

Like you said, moving forward...

As far as a split goes, the possibilities are endless. You will get lots of advice from a wide range of investors on here, which is good. (Don't forget to stir up your own pot of creative ability)

Typically, with the split your referring to someone brings 100% of money, you do the leg work, is 50/50 profit split. In my personal opinion there are better ways. Find private money, offer a % return on their money while you make 100% of the profit above paying them off at closing. 

• My ultimate and best advice I can give in my short career: Make the deal work for all parties involved, do it with integrity so that all of your future deals will find success as well. This is a business built off relationships, create win-win scenarios. 

Welcome @Reduell Crowder!

You have come to the best place to learn Reduell! Keep that excitement going as you learn to treat flipping homes as a business. 

Tips: 

• Your local meetups/networking here are the best places to meet your mentors/coaches. 
• Pick up these two books on flipping houses. This will save you time and money on learning the business. 
• Have you been listening to the podcasts? (This is my favorite thing to listen to on my commute to "work")

I'll leave you with this. Keep doing what you're doing now, connecting and asking questions. Do not underestimate the power of education:) 

Welcome @San Nguyen!

I started lurking as well. I just want to point out that you WILL find success helping run your mothers rental property the right way. And this is why: 

1. You found BP:)
2. Amazon Audible. That tells me you're hungry for knowledge and you're filling your "dead" time with awesome audio books. (I just started Grit yesterday) 
3. When you panicked, you sought out knowledge from credible sources. (And good ones at that, @Brandon Turner will be happy to hear!)
4. You became OBSESSED! Which Grant Cardone will be happy to hear about. ha! 
5. You made your first post! That is ACTION! To keep going, check out 22 1/2 more ways! 

Best of luck on the site San! 

Welcome @Malcolm Ndjiharine!

Anytime I hear empire I get excited! I would assume building a real estate empire is a lot like the TV show Breaking Bad. At first, its for the family. To keep food on the table while making them comfortable.  Maybe we pick up water works and railroads. But then, I want to own the whole monopoly board:)

Congrats for you having great ambitions! 

We had a great event! If you missed it, check out the notes from the meeting in this blog post!

@David Kerner you have all you need. 

• I know of national HML that loan up to 85% of purchase price and cover 100% of the rehab (Under 75% ARV).
• You would be able to rinse and repeat the Buy, rehab, rent, refinance, repeat option until you get tired of doing so. (You get that 15% and closing costs back)
• Just connect with a commercial lender/local credit union that does not have restrictions on cash out refinance time frames. 

I see that this post is a year old, any luck since then?