Skip to content
×
Pro Members Get
Full Access!
Get off the sidelines and take action in real estate investing with BiggerPockets Pro. Our comprehensive suite of tools and resources minimize mistakes, support informed decisions, and propel you to success.
Advanced networking features
Market and Deal Finder tools
Property analysis calculators
Landlord Command Center
ANNUAL Save 16%
$32.50 /mo
$390 billed annualy
MONTHLY
$39 /mo
billed monthly
7 day free trial. Cancel anytime
×
Try Pro Features for Free
Start your 7 day free trial. Pick markets, find deals, analyze and manage properties.
All Forum Categories
All Forum Categories
Followed Discussions
Followed Categories
Followed People
Followed Locations
Market News & Data
General Info
Real Estate Strategies
Landlording & Rental Properties
Real Estate Professionals
Financial, Tax, & Legal
Real Estate Classifieds
Reviews & Feedback

All Forum Posts by: Stefan Abel

Stefan Abel has started 3 posts and replied 24 times.

Post: Referral for Blanket Mortgage

Stefan AbelPosted
  • Rental Property Investor
  • NYC
  • Posts 25
  • Votes 3

@Matt Moylan I am looking into Blanket Mortgage to refinance (2) properties in Huntsville, AL. If I were to refinance with conventional loans at 75% LTV, one of the properties would be below the typical $50k min loan amount that every bank I have contacted requires. Hoping to combine both properties using Blanket Mortgage. Any recommendation on Lenders would be appreciated!

Post: 104 unit closed in Birmingham

Stefan AbelPosted
  • Rental Property Investor
  • NYC
  • Posts 25
  • Votes 3

@Caleb Bryant Nice work. Good to see your expansion. What was it that convinced the seller the sell at discount if others went on MLS?

Post: CNBC Article on Huntsville, AL

Stefan AbelPosted
  • Rental Property Investor
  • NYC
  • Posts 25
  • Votes 3

@John White thanks for sharing. This is really great to see/read.

Post: Alabama investment option - analysis paralysis- help!

Stefan AbelPosted
  • Rental Property Investor
  • NYC
  • Posts 25
  • Votes 3
Originally posted by @Jan Kerr:

With a 1031 Exchange, You have to put identified properties on a list by a certain time frame, but you do not have to make the decision on the specific property to purchase to roll the 1031 over at the same time. Put all of your choices on the list, as many as you can find, and give yourself some time to narrow down the list later. That is why they give you the time.

Just reading up on 1031 earlier this morning. My understanding is that you can add up to 3 properties to your list without any limit on property cost OR You can add as many properties as you want as long as the total purchase cost for all properties on your list does not exceed 200% of the original property sale price. 

For example: 

Original property sale $100k

Property 1: $75k

Property 2: $75k

Property 3: $75k

Property 4: $75k

Listing property 1-3 = $225k (OK because 3 listed)

Listing property 1-4 = $300k (NOT OK because greater than 200% of original sale)

Of course, I just read this today so double check...

Post: Private Lenders in TN

Stefan AbelPosted
  • Rental Property Investor
  • NYC
  • Posts 25
  • Votes 3
Originally posted by @Jordan Woolf:

@Peter McDonough I am not sure if it is an agency loan. The rate we discussed were 5.5%. I spoke with another investor from the area and he knows someone who has completed 15 deals and uses this bank.

Sounds promising. Do you know if this is a 30yr fixed rate? 

Post: BRRRR Financing in Huntsville / Birmingham, AL

Stefan AbelPosted
  • Rental Property Investor
  • NYC
  • Posts 25
  • Votes 3

@Todd Rasmussen

This is all very helpful. I appreciate the time you took to explain your path forward.

Post: BRRRR Financing in Huntsville / Birmingham, AL

Stefan AbelPosted
  • Rental Property Investor
  • NYC
  • Posts 25
  • Votes 3
Originally posted by @James Gates:
Originally posted by @Stefan Abel:

Hi All,

I am diving in this month and taking steps to BRRRR my first rental property in Huntsville and/or Birmingham, AL before the end of the year (hopefully sooner). First step is to secure financing and then on to building a team. Flight booked for last week of August for face to face meetings.

My Plan is to obtain a HELOC on my home to purchase properties in cash then convert to a Cash-Out Refinance after seasoning period.

Although I have heard of using a HELOC as a source of short term financing I have not specifically heard anyone speak of using with BRRRR specifically. When it comes time to obtain Cash-Out Refinance I will have a HELOC with a total credit line of $400k and roughly $120k (or less) on loan (purchase price + rehab). I'm aiming at $400k because I should qualify for this amount and want to be able to have ability for simultaneous deals in the future.

My question is, will lenders view the HELOC negatively even though the intention is to pay off using the Cash-Out Refinance? Are there any other limitations on this financing strategy I may be overlooking? Thanks in advance!

Hey Stefan! What you are describing (HELOC --> BRRRR) is exactly what my partner and I are doing in the Huntsville market. Please feel free to reach out if you have any specific questions on the process, but I can tell you that generally, I have not run into any problems with using a HELOC and then 6 months later refinancing the property on a conventional loan. My HELOC payments on a 50K balance are only $100 a month, and that is what the bank takes into account when they run your debt-to-income ratio. For us it has been a fantastic strategy to jump-start our investing journey, we went from 0 -> 6 units starting with basically no money other than the HELOC. My HELOC is from a local bank out here in Cali but if you need a few recommendations on refinancing lenders hit me up with a direct message.

If you want to take a look at an in-dept description of what we are doing here is the link.

 https://www.biggerpockets.com/forums/223/topics/685820-first-brrr-complete-details-pictures

Thanks for the mention Caleb!

-James

Hi James. I did read your discussion when you originally posted a few months back. Very inspirational!

So you did not have a lender lined up until you were well into the process. I will definitely check with lenders but as I am looking to obtain a line of $400k, I am wondering if the Refi lender (if not the same as the HELOC lender) will take into account just the $100k or so on loan at that time or the entire available line. If the Refi lender potentially forces the closure of the HELOC (as @Alexander Felice noted was a possibility above) that will be another hit as there are typically fees associated with lines closed within 36mo of opening.

I will PM you direct on more specifics. Really appreciate the response.

Thanks to @Caleb Bryant for linking James to this discussion! 

Post: BRRRR Financing in Huntsville / Birmingham, AL

Stefan AbelPosted
  • Rental Property Investor
  • NYC
  • Posts 25
  • Votes 3
Originally posted by @Edwin L.:

Have you tried a commercial lender? Rates are higher but it's asset based and not on your DTI.

I have not. But thanks for the additional option!

Post: BRRRR Financing in Huntsville / Birmingham, AL

Stefan AbelPosted
  • Rental Property Investor
  • NYC
  • Posts 25
  • Votes 3
Originally posted by @Alexander Felice:

When you go to refi, the bank will pay the HELOC if they don't feel comfortable giving it to you. In really tight situations they may make you close it. They will know the HELOC is for the home purchase because they are going to source the funds.

run your plan by the lender in detail before you buy anything, this way you aren't guessing what will happen. 

delayed finance is 75% LTV or 100% HUD1 whichever is lower

Thanks. Do you think there is an advantage or need to obtain each loan from the same lender? I'm starting to think this might be a less risky path but at the same time ma ybe difficult to find a NY credit union willing to finance a 30yr morgage in AL or if an AL credit union will consider a HELOC on a house in NY.

Post: BRRRR Financing in Huntsville / Birmingham, AL

Stefan AbelPosted
  • Rental Property Investor
  • NYC
  • Posts 25
  • Votes 3
Originally posted by @Todd Rasmussen:

@Stefan Abel

We've been doing exactly what you are looking at. When using the delayed financing exception, our refinancing lender was limited to refinancing based on the purchase price of the home and not the appraised value of the home after repairs. They also repayed our HELOC directly (Not ideal for a Brrrr deal).

If you are doing a Brrrr you are looking for a cash out refinance using the appraised value of the home and not going out of your way to disclose the HELOC was the source of the funds to buy and rehab the property (I don't think they will ask). HELOC will count against DTI just like any of your debt will, so make sure you talk to your lender's underwriting department to make sure you will qualify with added debt service. We were confident we would still qualify so we skipped that step, but make sure you are cautious before sticking yourself with something. After your cash out refi you will have laundered (for lack of a better term) HELOC money sitting in cash in your bank account which frees it up to be 20% down payment. If you are confident you can cover all of your investments with cash, you can repay your HELOC and then draw on it for the next deal if that is preferable for you. We are just paying down the HELOC using our W-2 income and keeping the cash available so we have the option of using it as a down on a larger project if it comes up.

Are you describing the seasoning period as the time HELOC funds sit in a bank account to resemble the rest of your cash assets or the time you own the property before a lender will refi based on your appraised ARV?

Thanks for your response. Did your Refi lender lend on purchase price of home or LTC (including cost of home+rehab)? Did you source both loans from the same lender for your property and the lender essentially pay themselves back to close out the HELOC?

I'm not quite following when you say "...HELOC money sitting in cash in your bank account which frees it up to be 20% down payment." It sounds like you used your HELOC for down payment and not for full purchase price.

The seasoning period I am referring to is time owning property prior to Refi.