All Forum Posts by: Scott D Burrows

@Andrea Sealey

HELOC's take around 3-4 weeks to close, depending on a few things, could be longer or shorter, just generally in this time frame, from my experience at least.

A conventional mortgage may be about the same or a little longer, usually a bit longer, from my experience. 

However, the HELOC is reusable and once you have the line open, it typically will be re-usable, once paid down, immediately (usually will stay open for 5-10 years).

Items to watch for with HELOC:

• Make sure upper-rate has a ceiling. 
• Check if it has into-period (usually a year)-take advantage of this. 
• Try to get a 90% of equity line of credit on personal home, if possible. Many banks will do this. 

Conventional mortgage:

• As @Andrew Postell mentioned, it will be fixed for the life of loan.
• Low-interest rates.
• Many have occupancy requirements, but banks will not remove a loan that is making money, so.... 
• Limit of ten properties. However, many ways around this if you get to where this is a problem-which would be a good thing :) 

Commercial Financing: 

• Be CAREFUL 
• Do your homework and know your numbers very well and what cash flow you are ok with
• Some of the top reasons that new businesses go out of business is because of expensive financing... so BE CAREFUL  

If you need anything else, feel free to message and I will be happy to help!

Good Luck,

-Scott

@Hai G.

@Chris Mason would definitely know. He is certainly knowledgeable in this space. 

I believe he is saying to call small, local banks in your immediate area (these will probably have less than 7-10 locations) and ask to speak with the COMMERCIAL department, residential lenders will just say they can't do it, even if their bank does do them. 

Make sure to ask for commercial lenders right away. Otherwise, you'll be stuck in residential going back and forth with people that don't know what you are trying to do.

-Good Luck,

Scott

@Jay Hinrichs

What do you suggest as an alternative to an LLC?

Personal umbrella protection? Since you have a lot of experience and are very successful, would love to hear your input on this. 

-Scott

@Jeremy Mims

The tradeoffs would be just that, looking at your case externally.

However, I assume that there are more legal parts to this question than I would be able to answer and I won't try to answer your question. 

On the face of it, 5% is better than 13%. However, hard money loans generally are done by private individuals and definitely very fluid or flexible to what you need to do on a flip.

Also, a homestyle loan (rates in the 4-6%) would also work for a distressed property, as it includes repairs and home cost into the total loan amount. Recommend you ask @Diana Muresan as I have worked with her and recommend. 

When you are saying new construction loans, do you mean conventional loans? 

If so, the tradeoffs would be a longer time to wait for closing, etc. Hard money would be a more seamless process, while still does require appraisal etc. However, a lot less middlemen involved with hard-money lending. If you are tempted to go the hard money route, give a call to a friend of mine at RCD Capital, Jonathan Surak. They have flip loans and landlord loans (8% interest only, which will come out to roughly the same payment as a conventional with principle pay-down (private so they don't count towards your property limit with conventional mortgages). 

Anyways, good luck and hope I didn't confuse you more. 

Summary: 

• New construction or conventional 
  • Better interest rate
  • Slower time to process and close 
• Hard money 
  • A little quicker
  • More expensive

Sincerely,

Scott

@Cameron Riley

I can't tell you what to say. 

However, I will tell you how I do it. 

I use Cozy verification services. Renters pay $39.99 and run the report themselves, I don't handle any of the information or payments. 

After they do this, I get an email that says I have an applicant, I check qualifications and go from there.

Usually, if they qualify and I like how they presented themselves I will accept (no evictions, late/delinquent payments, etc). 

Also, I never present myself to be the owner, but refer to the "owner" as if I am representing him and this helps to deflect a little bit. 

Here's an example of a message that I would send to someone who doesn't qualify (no more than a day after)...there's no reason to ghost someone:

"Thank you so much for your interest in this property. After looking through the applications, we have selected a tenant that best suits the properties criteria's for qualification. Again, thank you so much for your time filling out the application and have a great day! 

-Burrows Properties LLC"

Hope this helps,

Scott

@Christian Popp

Not sure what your options are here.

Do you have enough for down payment? You might think about going to some real-estate meetups and see if anyone needs a person for property management or maybe even get into real estate at some point, just to help you with self-stated income. However, I'm not sure of your options. Wish I could be more helpful. 

I know there are banks that do self-state income for self-employed people. But, they will usually want to see around 3-4 months of bank returns, etc. 

Good luck with everything, 

Scott

@Andrea Sealey

First Question: You are going to want to do a homestyle loan. 

I have worked with @Diana Muresan and she can help you with this, she's licensed in all 50 states. 

Second Question: Just use Google and type in mortgage calculator. A basic calculator will pop-up, go ahead and plug in your total loan amount and an amount for just interest and principal payment should show up. 

Again, good lenders on this topic would be @Chris Mason   (if in California)  @Andrew Postell (if you are in Texas)

Good Luck with Everything,

Scott

@Cynthia Osorio  

I recommend calling a place I have worked with in the past called RCD Capital. My contact there is Jonathan Surak, he should be able to take care of you on this no problem. 

Let me know how it goes. 

Also, be careful with private money lenders, a lot of them can be very shady and frankly con-artist like. 

Congrats on finding this deal!!!

Good Luck,

Scott

@Shaun Williams

The numbers that @Don Konipol is using seem very correct to me. 15% return would be what someone would expect to receive as your a smaller investor with an unknown track record using other peoples money. I'm sure you are good at what you do, but without having a track record it is risky in the eyes of lenders and your question should be what amount of interest would offset the apparent risk that your potential partner is taking on, and this also needs to be an amount that still provides you with some form of cash flow. 

Congrats on your presentation and the interest received. Make sure the numbers work and cast out your line. If it is attractive enough, I have ZERO doubt you will be able to draw a lot of private capital on your terms. 

Also, probably wouldn't hurt to get legal advice from investment attorneys in your area, specifically, as @Justin Kane mentioned.

If you have any other questions, I would be happy to help. Have a great day. 

Good Luck,

Scott

@David Lee

The expert on BP, in my opinion, is @Andrew Postell regarding what you are going to do. 

Also, from my experience here, thousands of people do what you do with no consequence. I'm not saying that there won't ever be a consequence, but more than likely you are worrying over nothing. 

Reach out to a couple lenders on here such as mentioned like Andrew or @Chris Mason and they should be able to help you with your worries regarding this issue. 

Again, you are more than likely worrying over nothing. 

I don't see a problem with switching to your personal name other than possibly a seasoning requirement to truly be in your name (i.e. having it in your name for six months before being able to apply for homestead, etc).

Good Luck,

Scott