All Forum Posts by: Mike Burkett

@Luca Ruggiero  If you are planning on using a traditional lender to finance your purchase, the car payment negatively affects your debt to income ratio and will play a factor.  If you use a hard money lender, they are more interested in the amount of cash you have in the bank, your credit score, and your experience level.  All three will determine whether they will lend you money and how much they will lend you.

@Jesse Daconta Assuming the bank hires an appraiser to value the property, the appraiser will use all three valuation methods, cost, income, and comps. For apartments, income approach carries the most weight. They will use the comparable sales to determine the cap rate for your property as well as help them in determining the appropriate NOI for your property.

@Vante'e Keena  If you are planning on using hard money, you will need a minimum of 20%-25% of the project cost in your bank account prior to buying the property.  Project cost = purchase price + rehab amount.  That assumes the lender will lend you 90% of the purchase price + 90% of the rehab amount.  If you are buying a property for $100,000 and it needs $20,000 in rehab, at a minimum you would want to have $24,000-$30,000 in the bank.  

@Khaled Seirafi  Difficult just because the property is located in Texas?  Not true at all.  

@Tyler Maten Since it is your homestead, you will need to work on your DTI. I'm not aware of any commercial loans that will work on that property. Happy to answer and questions for you.

@Inmer Manzanarez Lenders should be easy enough to find. There's a bunch of us here on BP. You need to get pre-qualified based on your experience, credit, and amount of cash you have. Not all lenders lend the same % of purchase price, rehab, and ARV, so find one that makes your $45k work for you. To answer your BRRR question, you would need to know how much you can rent the house for. Let me know if I can help.

@Jenny Tran  We offer proof of funds letters all the time to our clients.  Based on their credit, experience, and cash available, we are able to estimate the loan amount we would make to them to buy a property.  That amount along with the required down payment and closing costs allow us provide to the seller a maximum purchase price the buyer would qualify for.  If potential buyers had to provide only bank statements or other cash account statements to verify funds, then the universe of potential buyers would shrink dramatically since roughly half of buyers use some form of loan to close on properties.  Good luck in your new venture. 

@Michael Dorn  There is a meet up at the Lion & Crown in Addison once a month.

@Giovanni Pisano Have you ever done any business with this guy before? Do you plan on doing future deals with him? If you are not sure and want to use this deal as a test run, you might consider running the deal through your LLC and your bank account. You and the partner would execute a joint venture agreement stating all the terms of the deal (i.e. who puts up the money, who does the work, who makes the decisions, how are sales proceeds split).

@Chris Fuller  Do you or did you have a loan with Anchor?  How are they taking advantage?  What the heck is a junior lender and how are they falling victim?