All Forum Posts by: Ricky Reese

@Jason D, right I figured the HML would want you to have some skin in the game. That should also help cut down on the amount you would have to borrow. Absolutely makes since that the HML would fund the comps and not just assume you know how much the ARV would be. Thanks for the feedback.

I've been reading and studying the excellence of using the BRRR method for real estate. I want to paint a hypothetical BRRR picture that I would like feedback from the BP community. Let's say I was off the mark with estimating ARV for the refinance. I use a hard money loan (12 months) for purchase and rehab. Purchase: 40k, rehab: 15k, total: 55k. I finish the rehab and I bring in tenants. I go for the refinance to get out of the short term loan but all appraisals (hypothetically) come to 45k. Would you still refinance into a conventional and owe the HML 10k?

@John Warren, that would be a great strategy to use. The power of the BRRR method combined with using a HELOC should be great. Also, yes the debt service will be the deciding factor on trying this strategy.

@William Levi Corcio, that's a good position to be in. I'm hoping to hear OF COURSE you can use it for a down payment.

Hey BP community, I have read a few forums about the importance of a HELOC. I understand they can be very useful if used responsibly. For my current situation, I use conventional financing. The typical 20% down and 30 year term. Hypothetically, if I had equity in my primary property or rentals, could I use a HELOC from one of them for a down payment for another rental property? I know conventional banks and credit unions frown upon "borrowed" money for down payment. Not sure if a HELOC would be considered "borrowed" since the equity is there. Thanks in advance.

Thanks @Wayne Brooks. I was afraid that would be the case. That fee does nothing for the property and it increases the money needed upfront for the deal.

I recently found a property from a local advertisement. Upon thoroughly reading the advertisement and contacting the "seller" we agreed on a purchase price. The agreement (hypothetical numbers) was for $80,000. The "seller" then stated that he would have to "assign" the contract to me. This is my first time dealing with this type of transaction. He stated that $5,000 of the total would be for him at closing. The remaining $75,000 would be for the original owner for the property. My main concern is the $5,000 due to him at closing. I plan to use the Credit Union as my lender. I'm aware of the 20% needed for the main price of the property. Will I need to also pay the full $5,000 PLUS the 20% down payment? 

Thanks for the advice. I will be looking to connect with a reputable attorney in my area.

I'm currently reaching out to private owners for the opportunity for an off market deal. Assuming me and the potential seller reach an agreement on price over the phone or by email, what type of document or form would I need to make the agreed upon price official?

@Bjorn Ahlblad, I appreciate it. I wanted to make sure I was doing it right before doing too many.