All Forum Posts by: Joe Villeneuve

@Adam L. I have what you're looking for, I'm not the source so I'm not going to sell anything to you.  I'm not going to post the info here for privacy reasons...this source would get calls from every Tom, Dick, and...well you know why.

Contact me directly though and I'll get you the contact info of my source.

Joe Villeneuve
REcapSystem
A2REIC

@Will Pritchett As far as how long you need to hold the property before refinancing, that depends on the lender.  Most banks, or other traditional lenders, will require between 6-12 months of seasoning before a refi.

On the other hand, non-traditional or private sources, like mine, may not require any seasoning at all. Although I do have a local bank that will do 75% ARV with no seasoning.

Joe Villeneuve
REcapSystem
A2REIC

@Manch Hon Actually, there is room for passive investors.  This market is full of them...from California.  California investors flip houses in their state, and invest the profits here in CF houses.  Very common.

...and the $50k I mentioned is usually the ceiling.  The question was "How to spend $300k"  I assume cash.  If someone was coming in with $300k cash, they could easily buy/rehab 6 houses, and cash flow each with property managers at $400...that's $2400/month.  Since they were all cash deals, every property has 100% equity, so you refi each of them and do it again.  That doubles your return to $4800/month. 

When you can't get any more mortgages, you become a cash partner for someone that can, and split the returns.  When that partner can't finance any more, you are the cash partner for another partner that can, and so on...

Joe Villeneuve
REcapSystem
A2REIC

Yes, as long as the original property still cash flows.  What good is the equity otherwise?  When you refinance equity from a property, you've just put yourself into a cash situation since those new funds have not lienable ties to the new property.  That means that the new property also has 100% equity, so you can refi that one too, and keep repeating this until they won't give you more loans.

You must remember that every property must still cash flow after the refis...including the original one.  

Joe Villeneuve
REcapSystem
A2REIC

I'd figure out what I wanted to get out of it "after I invested" it.  Then, chose the best way to get there.  What I would do is a combination of what some have said above.

I'm lucky here that the market allows me to invest in SF rentals and get very high returns.  I'd start there, since you can put your cash into it, but never really spend it since you could recover it all refinancing it, and re-use it on the next deal.  That establishes my base monthly income to cover my monthly expenses.  How far I go depends on my monthly expenses, but here it would take anywhere near the entire $1M.

Next, I'd take the other $800K +/- and use it as a down payment on a NNN single tenant commercial deal. Then I would setup my daughter to do the same thing.

Joe Villeneuve
REcapSystem
A2REIC

Why is that Black Magic. Keep in mind what I wrote, "put that same $50k in" a house. I didn't say buy the house for $50k. That $50k cash represents purchase and rehab. The rehab justifies the added value (to $62k). My lender will lend between 75-80% ARV/LTV, with no seasoning, on Non-OO.

Joe Villeneuve
REcapSystem
A2REIC

So where's the "cash out refi"?

Joe Villeneuve
REcapStstem
A2REIC

What details are you lost in?  This is my main exit, and entrance strategy.

Joe Villeneuve
REcapStstem
A2REIC

@Account Closed was being a little conservative.  Here's why, you take that same $50k he was putting into each SF, and the house is probably worth at least $62k.  Refi out the $50k, use it again, keep repeating this until your arm gets sore.  Now multiply that times 6 (6 x $50k = $300k).

CCR is infinite, since you never actually spend the money...it comes back to you with every refi.

Joe Villeneuve
REcapSystem
A2REIC

In my opinion the answer to all your questions is yes. Most people/investors are very short sighted. They don't know how money works, and they miss the big picture. The big picture here is cash flow, and recovery of your cash in (CCR). If you are happy in a 100% CCR within a 3 year period, and you are obviously cash flowing during those three years, and beyond, then this is a great way to build wealth and not go broke while doing so.

Also, where are you getting the 15% from?

One more thing.  Is there a pre-pay penalty from the seller?

Joe Villeneuve
REcapSystem
A2REIC