All Forum Posts by: Stephanie Martinson

@Amy Wan Thank you for your help. I'm just planning one investor for this one SFR. Do you suppose a promissory note would suffice? I know you can't give me legal advice, but does that seem like it could work?

Thank you to everyone for your thoughts and help.  If I can avoid it, I'd like to simply use a promissory note and skip the securities lawyer.  @John Corey It would be like a syndication with only one passive investor... is that even called a syndication anymore?  Ha!  It's not a joint venture, but I'm not sure what it would be called.  

@Logan Hassinger Thank you for your help. I wasn't sure if I needed a PPM or if the promissory note would be enough. I'm not sure what a JV agreement is, but I will look in to it.

Good morning,

When BRRRR investing, is it best to try and buy the property in cash or to finance it? If it HAS to be financed, what type of loan would you recommend?

Thank you!

Steph

Hello everyone,

Has anyone done syndications on a small level and invested in a single family residence with investors' money?  I'm looking at doing one with 1 investor buying in at $50,000.  

House- $175,000

Repairs- $15,000

Hold period- 3-5 years

8% preferred return- Around $4000/annually (money from rent minus mortgage)

20-30% return at closing

Then I would keep the leftover annually and at closing minus carrying costs.

Any idea if I need a securities lawyer or if I can just sign a promissory note?

Am I missing something?

Thank you for your help!

Steph

It seems like a bit of work for a small deal, but I wanted to try a syndication at a small level while I'm looking for deals at a bigger level.

@Joe Villeneuve Your realtor will write up an offer for whatever price that you offer- it's their job to try and guide you, but it's your money at the end of the day.  If you think $45k is fair, and you are willing to buy "as is," then I say go for it.  The worst the owner can do is say no.  Your realtor may get annoyed with writing a low offer, but if you can justify why you want it at that price, he/she should be understanding.  

@Tim Herman Again, thank you for educating me.  I will soon be fitting in nicely to the Bigger Pockets forums because of you.  I need to look in to joining the BP pro and getting better at using the calculators provided.  I used it for this project, and it did show negative cash flows.  It seems like this deal would be good because of the $50,000 equity, but you are right, that isn't including any of the extra fees to sell, or including capital gains tax.  

Can you tell me why you take the ARV x 70%? I was thinking it would be 80% because of LTV...

I also was being conservative with the ARV at $300k, maybe I should ask a few brokers what their comps would be.

@Sue Hough thank you for your response- I appreciate the feedback and opportunity to learn.    This property is an off-market property and it's been vacant for a long time.  It's a seller's market here, so I'm trying to figure out a way to make the property work still, maybe to no avail.  I wonder if it would be worth it to keep working the numbers at a lower price still.  $90k or less even.  It is just hard to know exactly how much money would need to be spent because there is so much that needs to be done.  It's distressed for sure, but in a nice neighborhood.  I brought a contractor through it a year ago and he was thinking $150k, so that's where that number came from.  

This could be an example of getting too caught up in a property where the numbers don't work.  I just want them to work because I drive by this house every day!

Thanks again- you both are great!

Thank you for educating me, Tim.  Have you done many BRRRRs before?  

Hello,

I'm looking to do my first BRRR deal, but I'm not quite sure it's technically a BRRR.

It's a gutted house- $100,000 and I would get a new construction loan, put $25,000 (of my Dad's money) down on the loan.   

Rehab it for $150,000.  

Refinance for a conventional loan and give my dad his $25,000 plus 6% interest= $26,500.  

The comps in the area are around $300,000, so after construction there would be around $48,500 in equity.  

I may have to sell it, or move in to it because I'm looking to quit my W2.  

Any thoughts? Is this considered a rehab property instead of a BRRR? You all are the BEST!