All Forum Posts by: Nicholas Reece

@James Carroll; Between my regular job and running GC over the rehab, I honestly just haven't made it as much of a point to network as I should have. Other than our 1 SFR, this is our first multi, full rehab experience. So...maybe next time.

@Jennifer Beadles, @Christian Bors; Made a few more calls today and found someone not bound by the seasoning period with 4.75% interest rate @ 70% LTV or 75% after the 6 mo. I already have another lender, bound by the seasoning, offering 4.5% @75%LTV. I'll keep calling around until I get the answers I want. Just like shopping for cars, like I always tell others that are buying houses, yet I don't apply the same logic to my own situation, lol.

I got this requirement from the first few that I spoke, so I'll keep calling.

Thanks @Zach Quick! 

Thank you biggerpockets community for the instruction and support that has allowed us to be in the position to need to ask these questions. My wife and I bought an apartment building just outside of Houston with a hard money loan in early April. The rehab costs have far surpassed our budget due to some masked issues(missing copper lines in walls, dangerous wiring almost throughout...all covered with sheetrock) Also, the city is requiring us to pour new approaches at "multifamily" thicknesses; about $9k worth. Fortunately, I had reserves and we are able to roll some of these onto credit accounts. We are nearing the end of the project and have a few things coming up concerning the refinancing that we need some advice about.

Basic rundown of numbers:

4 units, each is a 2 bdrm with jack and jill bath(1.5), open concept, at ~1100sqft.

Purchase price: $110,000

Appraised as/is value at purchase: $130,000

Appraised ARV: Range of $225,000 to $275,000 "depending of finishes" Estimated rents $750-$950. We anticipate the actual value to be higher since the comps were all over the place.

Cash for purchase: $50,000

Hard money loan: $150,000($80k in escrow) 4 points and 11.9% with a $3k extension fee after 6 mo.

Out of pocket cash/credit for repairs not covered by HM: ~$45k

We hope to have them all rented by the end of September and to be refinanced out of the loan before the extension is required. My questions are concerning strategy really. I always intended on doing a cash out refi, but was unaware of the 6 month seasoning. As I have less than a month at this point to refinance and not pay the extension, should I keep looking for private money or lenders with high upfront points and chase the higher 75%-80% LTV, or pay the extension fees and cash out at 70% LTV with fewer fees and lower interest rates? We have a lot of cash tied up in this and I would like to wrap some of these credit accounts up into this loan. There are even a lot more questions due to the unknowns concerning the actual ARV. At a minimum, we should see the highest of the previously mentioned range.

What say you BP? Thanks for any suggestions, or for any other strategies/vehicles y'all recommend!

Thank you biggerpockets community for the instruction and support that has allowed us to be in the position to need to ask these questions.  My wife and I bought an apartment building just outside of Houston with a hard money loan in early April.   The rehab costs have far surpassed our budget due to some masked  issues(missing copper lines in walls, dangerous wiring almost throughout...all covered with sheetrock) Also, the city is requiring us to pour new approaches at "multifamily" thicknesses; about $9k worth.  Fortunately, I had reserves and we are able to roll some of these onto credit accounts.  We are nearing the end of the project and have a few things coming up concerning the refinancing that we need some advice about.

Basic rundown of numbers:

4 units, each is a 2 bdrm with jack and jill bath(1.5), open concept, at ~1100sqft. 

Purchase price:  $110,000

Appraised as/is value at purchase: $130,000

Appraised ARV: Range of $225,000 to $275,000 "depending of finishes" Estimated rents $750-$950. We anticipate the actual value to be higher since the comps were all over the place.

Cash for purchase: $50,000

Hard money loan:  $150,000($80k in escrow) 4 points and 11.9% with a $3k extension fee after 6 mo. 

Out of pocket cash/credit for repairs not covered by HM:  ~$45k

We hope to have them all rented by the end of September and to be refinanced out of the loan before the extension is required. My questions are concerning strategy really. I always intended on doing a cash out refi, but was unaware of the 6 month seasoning. As I have less than a month at this point to refinance and not pay the extension, should I keep looking for private money or lenders with high upfront points and chase the higher 75%-80% LTV, or pay the extension fees and cash out at 70% LTV with fewer fees and lower interest rates? We have a lot of cash tied up in this and I would like to wrap some of these credit accounts up into this loan. There are even a lot more questions due to the unknowns concerning the actual ARV. At a minimum, we should see the highest of the previously mentioned range.

What say you BP?  Thanks for any suggestions, or for any other strategies/vehicles y'all recommend!

@Rita Koroll, the absolute best thing you can do is to continue your education by listening to the podcasts and reading some of the great books recommended through this sight.  RE is a for the most part a long game plan.  There was a great audiobook  my wife and I listened to that really made us understand that learning and being patient was the key to success.  It was the Weekend Millionaire and was full of some great strategies.  

I would highly recommend a book by a local San Antonio guy Danny Johnson, who has been on the podcast more than once.  The book is free on Amazon.  Flipping Exposed...I think.  Look it up and download for yourself.  Lots of insight.  GL

Following...

Make sure you know the true value of the property, understand the costs associated with the repairs you intend on doing(think minimal), and if anything else, you will have owned a home you lived in and possibly built some equity in the mean time.  If possible, look for a duplex that you could live in one side.  I think that is the absolute best way to learn a lot of different facets at once. 

I had a similar experience with an agent I had contacted about an MLS listed HUD property. After agreeing to put in the offer for me, then getting the address, then asking me for my bid amount, she suddenly "remembered" that she was already "going" to put in an offer for "an investor she had been working with for years and you know it would just be a type of conflict of interest if she put in offers for both of us and don't you see that's why she just couldn't help me." Yeah, that happened. In my initial anger, I asked her about the obvious conflict of interest in asking me for my bid amount. And then I calculated the angles and immediately started playing dumb. You know, cause I understood her position and maybe next time. Basically I contacted an honest agent, raised my bid, and got the property. But it cost me more than it should have.

The Simplisafe system works on a cellular platform with a battery backup of 8? hours.  You'd have to consult them to make sure you could get monitoring service, but it's only $15 a month.  Hurdles aside, this property will be a win across the board and we(my wife and I) are looking forward to sharing our experience with BP soon.  Thanks!