All Forum Posts by: Ryan Blake

As a property owner, I get a lot of these calls. Daily. I also report every one of them to https://www.donotcall.gov/report.html#step1. I know there is some back or forth on whether these are considered an unsolicited sales call or not. But the VAs just don't work. Too many people doing the same thing doesn't land strong results. Text messaging is probably the same. I think the cycle is now back to door knocking, direct mail, and bandit signs. But it will go back to calling when the fad dies down and people are getting fewer calls and it will become profitable again.

AI texts are still pretty easy to ignore. I know you are pitching your program or software that you want to sell, but I don't think it is really solving the personal contact problem. I do agree it will probably work better than a barely-trained VA but it still will have varied results.

@Jose Saladin you will likely not get a CO (certificate of occupancy) to be able to legally rent this out. Consult an attorney to review the zoning and see what is possible. Now you can always rent it out and just keep it on the down low but just be aware of the risk. Cost will likely be around $120 - $160 / sqft depending on finish out and how much one the existing house needs to change.

@Allen Zhu I think looking at rate only is not a good position. Look at what you need first, then look at the rates. For instance a lender that requires a 15% down payment will have a lower rate, because for them there is less risk. But based on your prior posts it looks like you are doing the BRRRR method and you would probably rather have a higher LTC. There are companies out there that will offer 100% LTC but they will have a rate closer to 12%+. For the BRRRR method, this would likely be more advantageous to you. It keeps more money in your pocket and if you refinance within 2 - 3 months, the interest rate will not make a big difference. For instance, a 10% interest rate on a $200,000 loan would be a payment of $1,660 / month where as a 12% interest rate on a loan would be $2,000 / month. There is a $340 difference but if you had to put down a 15% down payment that means you would be putting down $30,000 more at closing which would be left in the property unless you held it long enough to do a cash out refinance ($200,000 x 15% = $30,000). So it really comes down to what is the best strategy for you.

Doug Higginbotham - A Smart Choice HVAC

He works mostly with real estate investors. Has done at least 4 projects for me. He is older but his team is all younger and they do the heavy lifting. He is based out of Arlington / Grand Prairie.

254.715.0244

I think you may need a new lender that is able to grow with you. Most lenders will let you do more than 1 at a time. Most will let you do 3+ at a time. I would also suggest finding a 100% LTC (loan to cost) lender that will fund all of your rehab and all of your purchase. San Antonio is a hot market still for flipping. Tougher to make rentals work at the moment but I hope that will change soon. I will be honest I do not know much about that Virginia market. Feel free to reach out if you have an lending questions.

Possibly. I would also check to see if you are able to refinance with your long term lender. The transaction will not constitute as an "arms length transaction" and may cause issues for you. It also may cause a taxable situation for your friend or family member. You will want to consult with a tax professional about that as well.

@Tyler Garza I have heard of delayed financing but that is not something that can be done in conjunction with hard money in the last 8 years and 700+ loans I have been a hard money lender on. He would need to explain more on that. Every DSCR lender and do things a little differently since they are all portfolio loans. This could be something specific to a certain long term lender I have not worked with. You would need to wait until you do a refinance out of the hard money loan. (I wrote this before reading Shiloh's explanation)

It looks like Shiloh just got a Hard Money loan. Hard money will lend to you on a purchase of a home with a rehab escrow amount (not sure what a rehab credit is). For example, lets say you have a house that you can purchase for $100k and it needs $50k of work but will be worth $200k after it is fixed up. A hard money lender (hml) will lend you the $100k to purchase (or $90k if you have a 90% LTC lender) and will escrow the $50k so you can access those funds as work is being done to the property. Once the property has been fully fixed up, you will now owe the HML $150k. You will get a refinance (not a cash out refinance) for $150k and payoff the HML. This tends to have very low seasoning requirements, like 1 - 2 months. A cash out loan would have 6+ months typically and if it is a traditional loan it would be 12 months.

A DSCR loan will not work for what you are trying to do. DSCR lenders lend based on the Debt Service Coverage Ration and if you are living there you do not have incoming rent to offset the debt service (payment). Some DSCR lenders will do it based on expected rent but still, they would not want you to be doing an owner occupied home with their loan. This is related to lending laws/regulations created by the Dodd-Frank Act in 2010. It limits the risk that lenders can take when lending to primary home buyers and requires certain checks are made. Hard money and DSCR loans generally do not vet the borrower enough to meet these regulations. And many DSCR lenders are no Registered Mortgage Loan Officers (RMLOs).

You will need to get a conventional mortgage for your refinance of some sort if you plan to live in it. There are of course some exceptions to this, but I am speaking more generally here.

@Shiloh Lundahl It is a complex strategy but if @Tyler Garza does his homework, finds local resources, and follows the laws, it is very attainable. I don't work in OK but in the state I am in, we have people do similar. Never living in a flip but selling their person home or taking out a HELOC to then pick up 1 - 2 rental units. Then after holding for awhile moving those through a 1031 exchange into a larger multi family property.

Tyler, Travis is right, you need to do your homework, but probably wrong in telling you to not pursue the work. If you are in this, get in it. Study it, got to meet ups, and learn your state rules and regs. Most of what you are looking to do is possible. It will take work and research, but it is possible.

@Tyler Garza You are correct. The % of LTC is the amount funded of the costs needed. So the inverse of that % is the down payment. I would suggest not finding a stand in. Most, if not all, hard money lenders make the person signing on the loan also sign an affidavit. Having you live there, could put them in some legal trouble if it ever became public with what you are doing. The time you would need to live somewhere else would be the time you sell your current home (or rent it out) until the flip home is refinanced.

I agree with  @Shiloh Lundahl. Only tweak, find a lender that offers 100% LTC (loan to cost) or as close to 100% as possible. That will keep your out of pocket lower and your $70k would allow you to buy two properties. When you refinance, move into one of the properties and then rent out the other.

This may create a brief moment where you will need to live somewhere else. This is because Shiloh was right, hard money loans CANNOT be for a primary home, ever. If a lender tells you otherwise, I would really reconsider who you are working with. They would not be offering you a hard money loan (loan based on the hard asset) and instead they are lending to you as a traditional lender with private money. That would be a allowed but they should be doing more due diligence and requiring a lot more documentation than what an asset based lender would require. Know that if you want to do a cash out refinance on a primary home, it will likely need a full 12 months of seasoning (holding time) before you will be allowed to close. Your hard money fees may eat you up during that time. You may just want to do a traditional refi and take out a HELOC after a couple years as you continue to build equity.

Once you have your primary home refinanced, you should be fine. Get your personal home done first. Then do the second property with the other 1/2 of your $70k. You can always get a DSCR loan for the second property which is just an asset based long term loan (based on the rents or expected rents vs your income and personal ability to pay).