All Forum Posts by: Pat McCandless

It's near Samuel Huntington School.  And I haven't seen much in Newington.  Any multi families I've seen have been pricey.

I have my eyes on a property in Norwich CT but am not totally familiar with the area as I've grown up and still reside in Central CT. Any investors in the Norwich area care to share your opinions? It would ideally be to perform a BRRRR strategy so I would be looking to hold it as a rental. Can you also confirm what the market rent is there? From what I've seen it's about 1100 for a 3 bedroom.

thats only part of the equation to determine if you are "gaining" or "losing".  Timeline, income generated from rent, closing costs, etc. all contribute to the bottom line.

the 15% is the annual interest-only payments on the loan amount.  So 15% on 429K is $64,350.  Divide that by 12 (months in a year) and your monthly loan payments are $5,362.50.  Now you need to determine how long it will take until you Refi to see how long you will need to make those high-interest payments.  The 5 points are 1% of loan amount per point, so another 5% on top of that is $21,450.  If it took you a whole year from purchase to Refi, you would essentially pay 64,350 + 21,450 = 85,800 in interest (yikes!).  If it only took you 6 months, your total interest payment on the loan would be cut to 53,625.

@Mike B. so would you say that hard money shouldn't be used for the BRRRR strategy unless you have a property with a huge discount? From posts that I've read on the BRRRR strategy you would need to wait a minimum of 6 months after purchase for the appraisal to not be effected by your purchase price. As long as you can find a tenant and refinance within the 6-12 months after purchase it should work using a HML right?

Wendell De Guzman I'm assuming you used your own funds for the purchase and rehab? My fear is using hard money lenders for the BRRRR strategy, all my rent would be going towards the interest payments on the loan until I could get it refinanced, right? Private money sounds much more ideal.

Mark Avery glad to hear there are opportunities in state. My issue, being a beginner, is that (from what I've seen) the areas to start small are in the not-so-desired areas or in places I'm just not familiar with. I am a very calculated person so maybe I'm just waiting for too perfect of a deal, and instead I need to just go for it. My thinking is that everyone needs a roof over their head so if you can turn a property into something as affordable as any other property but look the nicest, why wouldn't they want to buy or rent your property over the others? On the other hand I've also heard the saying don't buy where you wouldn't want to live yourself. Then my personal standards get in the way of taking the plunge on a deal.

Carlos Velasquez thank you for the motivation. How were you able to purchase the property with only 10k out of pocket? I thought HUD homes usually require cash, I could be wrong. Also how quickly were you able to pay off the credit cards that you used for the renovations? Did you just pay them all off once you took out the HELOC? I purchased my primary residence a little over a year ago so I would not be a first time home buyer, and I have access to business lines of credit that would be a good option to use for renovations. Also, do you have any more numbers to share on that property? Bought for 63k, how much did you put into renovations, what was ARV when reno was complete and how much equity were you able to pull out with the HELOC?

@Rosston Smith I agree, I just don't have family members to borrow from and I'm not sure how to go about it with anyone else since I don't have a history with REI yet. Any tips on how to go about that?

So - I'm still looking to do my first deal and wondering if any of you successful investors would care to share the numbers on a BRRRR deal that you used hard money lenders to purchase the property and maybe even cover the rehab costs. I'm curious to hear if it's possible or if the HML's are too risky for these type of deals since you want as much equity as possible when you refinance. On top of it, has anyone done this with an out of state property? I'm located in Connecticut where taxes are brutal so I'm intrigued to find something where the taxes won't eat away at the cash flow. I'm seeing PA has some decent areas to start. Or since I haven't even done a deal yet, is it a waste of time looking out of state? Appreciate any feedback or insight.

Thanks!