All Forum Posts by: Mathew Pezon

Hi Kyle, that's correct at a high level. Keeping in mind you'll have interest payments to the bridge lender, closing costs to buy the property (most times hard money lenders charge points), and then refinance costs. The $36k cash out refi could get reduced to $25k or lower depending on all the closing costs. So in this example you wouldn't recycle all of the funds when factoring in the other costs. Another risk is if the property doesn't appraise for $240k but for $230k, it could further reduce your money recycling. How to offset the risks? Buy the property at a lower price. Good luck! 

Here are the steps:

1) Find a great deal and sign and agreement of sale

2) Find a bridge lender to lend you 90%+ of the purchase price and 100% of the renovation costs (assumes all in you are 75% of ARV of less)

3) do the work, manage the contractors

4) When the work is done, submit a loan request package to a local bank subject to the property being rented. The local bank pays off the bridge lender

5) Once you have a signed lease, finalize the refinance and have the permanent lender pay back the bridge lender

6) Repeat

I hope this helps!

When residents do NOT have utilities in their name, in our leases the payments go to the oldest charge. So you'd apply the "rent" payments to the outstanding utilities, meaning rent is still owed. The you proceed with the process for outstanding rent. 

when residents DO have utilities in their name, then it's up to them to meet the obligations. 

Great responses above ^^ Definitely great info.  I would add that once you buy, the key is to manage right. You can cut off a couple hundred to thousands of dollars here and there by getting the right loan. But if you rent to the wrong tenants not only will you have a bad living arrangement but all that research for the right loan product goes out the window when you have to do a $10k+ turnover. In summary: buy right, finance right, and manage right. Good luck!

Great post and deal. Keep the good work. I love working with Conquest Funding. Great company. 

Sorry, the last words got cut off. It's more work later if unknown permits happen to show up. 

Hi Frankie, totally get it. The reports are wonky and Allentown city recently upgraded their system. They're doing a good job but some open admin items remain and I've seen required permits that are not on the CO reports, too. They pop up from time to time. 

The best way around "surprise" open permits is #1 and #2 above. If it's a competition amongst buyers, IMO buyers should still submit a RTK. They are responsible for any future code items anyway. 

Another avenue if buyers do not get a clear CO with their purchase: they should still request due diligence in the AOS and ask Allentown directly via the RTK. If there's a tight deadline, go down to city hall on Hamilton St and ask the Bureau of Standards and Safety to provide any permit history. Yes, it takes work up front. But it's more work later.

Hi @Mikey Bentivegna,

Start by doing your own research on the local real estate market and once you have an idea of how the the local market looks like, start connecting with real estate agents to get a better understanding of the local market. Once you know the market well enough i.e. what type of property to invest in, start connecting with lenders. Determine your budget and available financing options and go from there! Good luck!

Hi Alexandra!

Upgrade your strategy and utilize social media platforms such as Facebook, Instagram, and Twitter for promotion. Make sure you have great professional pictures.

Also try expanding your reach to other rental websites like HomeAway, FlipKey, and Zillow. These platforms cater to a wide range of travelers, including those looking for mid-term rentals.

Hey Matt, not for this one but hopefully for next month's meetup! And I'd love to be a presenter again soon once things settle down a bit!