All Forum Posts by: Ryan A Rodriguez-Wiggins

Also, it might not be a "ran out of cash" issue but more of a cash flow / timing one. With COVID a lot of city offices have been extremely backed up, so the permitting process can be super slow. If you buy the property hoping to fix it and rent it in a month, just heads up I would factor in double the time you think it will take when you run your numbers. That way you're not sitting with a property waiting around for weeks and can't do anything.

Similar to Jennifer's response, its possible that they found additional investors to partner with, especially if its a cash deal, and opened an LLC specific to that property.

@Melody Rault

Good point, if its specifically called out on the pay stubs they will see it. However, from personal experience, I still think its less of a red flag if you already have the cash in your bank account because they won't need a letter of explanation of where the additional funds came from.

Thinking back, I believe what I did was pause my 401k contributions during that period, so let's say you usually contribute 500 a month to your 401k, and now you have a loan you need to pay back of 500 a month, it nets out as roughly the same take home in your check (this example doesn't account for the tax difference but hope this makes sense). Thanks!

@Michael Loza

Np!

@Michael Loza

As most have mentioned this is a great strategy, I've done it multiple times myself. One thing to be mindful of is that your lender may be looking at your income to loan, and by taking out a 401k loan they may need to re run their calculations.

Also, and it sounds like this is similar to the cash problem you have where they won't let you use additional funds, the mortgage company wants to know where the money is coming from. So in the future its best to take the 401k loan out two months in advance so it sits in your savings account and looks like cash, not a loan. Just FYI.

@Brandon Sturgill

Yeah, I hear you. Also not looking to be a slum lord lol.

I think pooling cash is the way to go, and maybe a bit nicer neighborhood if the crime is that bad there.

Much appreciated!

@Bernice Monroe

I was thinking 55k purchase, 30k reno, rent between 900 to 1200, let's say 1050 to be safe. That should give you a refi of 105k, pull most of the cash out.

@Brandon Sturgill

Thanks for the link! Great report.

@Brandon Sturgill

Thanks Brandon! Yeah, I mean based on the pictures I figured we could drop another 30k in it and rent, then refinance.

Re: bullet holes lol. Wow that's pretty serious.

I like the idea of pooling funding and doing something where we don't hate ourselves in the morning but still get good ROI :)

@Julio Silva

Sounds good! Thx