All Forum Posts by: Rivy S.

@Andrew Postell wow that is great information. I don't know much about the financial technicalities of an LLC-- like can I just give it money from my personal acccount to lend back to me? when I repay it from me to the LLC with the loan, can I put that money back in my personal account?

However, you've given me a lot to think about! I will do my research.  Thanks!

This sounds to me like an excellent way of doing a BRRR while skipping the seasoning, right? The only part is to be careful that the original loan from your LLC to yourself should be as close as possible to the final amount you'll be approved to borrow from the bank minus closing costs of the loan?

@Christopher Phillips  Thanks for your response! I'm not sure  I follow though... Why would the appraiser see the credit, or the purchase amount altogether? The appraisal isn't happening in the  context of the purchase, which is being done with cash.  It's being done in the context of a delayed finance transaction, after I purchase and lightly renovate the property.  (Within six months, so delayed finance rather than cash out refinance)

Also, in my case the objective of the  concession is not to bump up the sales price, it's to cover a repair allowance that the sellers don't want to handle.  Does that change anything?

Any lenders or buyers out there that have done this before? The property is in Indianapolis btw. 

I've had a cash offer accepted on a duplex.  The inspection turned up some issues that I'd really like the seller to fix, but they are not willing to, and instead offered a price reduction.  

However, I will likely be applying for delayed financing on this property. My lender will lend up to the lesser of A.75% of LTV and B.100% of purchase price (this is during the delayed finance time period, so within the first six months). So if I get a price reduction, it will lower the amount that I can borrow against this house. Can I keep the sale price the original offered amount, and get a cash concession at closing, so I'm essentially walking away from the closing with the money in hand to pay for the repairs? Would that money need to go into escrow to prove its only being used to pay for repairs, or can it come to me directly?

My lender said he thinks it is legit for me to get a check directly, but I'm wondering if anyone has done anything like this before, I really don't want to end up in jail for fraud :) 

If this is legit, I'm wondering what's stopping anyone from scamming the system. 

Say I want to pay 100k for a property.  I arrange for the seller to agree to a purchase price of 130k , with a 30k cash credit at closing.  Boom, now I can borrow 130 against the property instead of 100 (assuming it appraises high enough).  Doesn't seem like that should be possible. 

@Shane Bracewell Holton Wise.  Water/sewer/trash is often around 160/month.

2 units (a duplex), almost 2 years

Property management

Yes, cashflowing, but not by a whole lot. I'm looking at around 8% CoC after all expenses, including reserves. (Water/Sewer/Trash is the real cashflow killer)

@Bode Adeyi It looks like the calculator is calculating this as a wholesale deal, and those are the numbers that will be relevant to the buyer who you sell to.  

The "down payment" number seems to reflect the difference between the loan of 79,321(which is is 70% of the ARV) and the purchase price of 82,283. So it's not really a down payment, but the portion of the purchase price which is not recoverable by the loan.

increasing the size of your loan is always going to increase the size of your payments, unless rates have gone down which they haven't.  

Right now your loan is at about 71% of your properties value. That's right around what a cash out refi will give you (most lenders will do cash out refis up til 70% LTV, some will do 80) , so I don't know that there's much value in converting the loan, unless you need another FHA one. You've done an awesome job in that in 10 months the same size loan went from being 96.5% of your property value to 71% of your property value. I don't know much about FHA loan but if you are paying PMI (due to having less than 20% equity) you should be able to ask to reevaluate that.

@Rachel Degennaro  Technically, you can have up to 10 conventional loans.  Many lenders give you problems past 6.  (Never waste two ppl, like a spouse,  on a single loan if each of you can qualify independently) 

The bigger problem I think you will have if you scale quickly is DTI. I believe most lenders will not count rental income as income until you can show two years of rental income on your tax returns. Once you've got that, each income producing property will help your DTI. Prior to that (and I may be wrong here) I believe it will just count towards your debt.

There's almost no benefit in committing to the higher payments of a 15 year loan. The difference in interest rate makes almost no difference. So I'd get a 30 year. Nothing is stopping you from increasing your monthly payments to shorten the length of the loan (assuming no early payoff penalty), which will get you the same benefit (less interest over the life of the loan) but with much more flexibility.

And btw, I guess I'm super conservative, and also still a newbie, but I do 8% for vacancy and 10% each for capex and maintenance, because I'm assuming a long term hold, and that eventually *everything* will need to be replaced.