All Forum Posts by: Kent Verge

I work with a local bank here in Arkansas, and they haven't been as restrictive. The couldn't, however, make a loan on the house in Florida.

Thanks @Shaun Weekes but after reading the guidelines again this morning, I don't this it qualifies for delayed financing. I got a small amount of owner financing to help with some of the rehab costs, and it's essentially a mortgage with 90% down payment. :| 

At least I have time to talk to some bankers if we end up waiting a year. It may be that I need to spend some energy looking for a portfolio loan for the remaining four properties (or all five).

I'm thinking ahead a bit, and I had a question about doing a cash-out refinance.

For some background, I bought a buy-and-hold rental for cash; it included two houses: a 3/2 in the front, and a separate studio cottage in the back. I plan to rehab both and initially planned to do a cash-out refinance when complete.

There were some difficulties with financing this deal, mainly because I already have five loans for other houses, so I raised funds with essentially a HELOC and a crowdfunded personal loan to purchase the house for cash and cover the rehab. Because of the change in plans along with some unplanned rehab costs, I likely won't have the funds to rehab both houses up front (although I can find additional funds if needed).

I read about Fannie Mae's "Delayed Financing Exception" which looks like it may be an option for this property. That said, I'm not sure that I can secure additional funds and finish the rehab on both houses within the 6-month window. I know that the rehab will be completed on the main house in time. 

Would it be possible to do a cash-out refinance with the rehab complete on only one of the two houses? Since some demo has begun on the cottage, would I need to get it back into a liveable condition first, or could it be included in the valuation in an as-is condition? Based on recent sales in the area, the ARV of the main house alone would be more than ample to allow a a full cash-out refinance, less rehab costs, under delayed financing, but I'm not sure how the cottage would play into the refinance valuation.

I know I should have figured out the exit plan earlier, but the last minute change in financing of the purchase threw in a monkey wrench.

Thanks in advance.

You would have to do something to improve it, somehow, to raise the value. I'm not sure, looking around that area, how much more you could get and if you could even make back your additional investment for a bit of rehab. You'll certainly want to spend more time looking at comps than I did.

If I remember @Mike Palmer it was a cherry (Ultra). I have the details, but not handy right now. It's the second photo that @Drew Wiard posted.

I only installed it in the traffic areas: living room, entrance, hall. The bathrooms got the Trafficmaster groutable tiles, and I didn't do anything in the kitchen. I always use carpet in the bedrooms.

Yes, we had to remove and reinstall the trim. I suppose you could use the gap left by carpet, but it wouldn't be a perfect fit and you'd still need to remove it from one wall for the last row of flooring.

As about their house and why they want to sell. Michael Quarles walked through the questions he asks during a phone call in podcast 77 if I remember correctly.

Sorry, I didn't read through all of the follow-up posts before replying, so some of the comments above may not apply. Nonetheless, personally, I'd rather be up front about my screening criteria and then still talk to the prospects. Sometimes they call even though they don't meet the criteria, but I'm able to screen those out quickly anyway.

First of all,if you don't have a good process, software (a website) isn't going to fix it. If you aren't doing a good job manually screening, the website isn't going to do any better.

Second, if you go back and re-read the process you described in your initial post, would you do it if you were renting? I don't have a problem with directing people to a website or auto-responding to an inquiry to an ad, but you really need to do the screening in person or the process will turn off good prospects.

My ads all list my website, and I have a dedicated page for each available property. It has tons of detail (way more than the ad) and most prospects know all about the property when they finally call. My "For Rent" signs also include the website as does the voicemail they get if they try to call after hours.

The site itself includes a "Call Me" link using Google Voice. It also includes a page to allow them to schedule a showing (it uses a free tool called Appointy); although only a handful of folks have used this, it's still another avenue for people to make contact.

I'm of the opinion that you should make it easier for prospects to reach you rather than harder... 

Is your accountant living the lifestyle you aspire to live? My guess is that he isn't...

If you do a cash-out refinance, you have cash to do with as you will (including to buy property at an auction).