All Forum Posts by: Tom S.

@Caleb Sonneman  There are non traditional options out there such as owner / seller financing.  I did a bunch of my first deals that way.

@Lucero Cruz Narino  Maybe try calling instead of texting?  And yes, if they're not interested, try to find out why. 

Good luck!

@Akshay Bhaskaran  Yes, certainly complete your due diligence.  You can at least get it under contract, then order an appraisal, inspection, etc.  

As others have mentioned, the seller can just sell and put the money in a CD at 5%, so why offer financing at 2%?  There are tax advantages to the seller, but definitely dig deeper.

Good luck!

@Brady D'Hont  Brady - on your questions to me, I invest local (VT) and have contractors mostly in place, depending on the exact location.  Once you start to do a few rehabs, you can walk the place and at least get a rough estimate in your head.  Then I would make the offer and use the inspection period to get the contractors in and get better numbers.  

I also use local banks that can provide purchase + rehab financing all in one loan. The bank will do an appraisal based off the ARV, so that way the numbers are already known up front and generally, minimal surprises.

As mentioned in my original post, the goal is to create equity,  and get your DP back out through a refi (and still leave equity in the property) and still have a cash flowing rental property.  Then take that DP and repeat!

@Brady D'Hont Similar to what others mentioned above, for me the BRRRR method is a good one. Using round numbers, starting off with a $25k DP for a $100k property and saving up for that is the hard part. Then BRRRR, and ideally pull out $25k after fees for your next DP, also leaving equity in the property and have it be cash flowing. Then repeat that process a few times. Having a good W2 job is certainly helpful for getting the best loan terms.

I also did a number of seller financed deals that I purchased.  With the two strategies combined, it's been very successful.

Hope that helps and good luck!

@Hector Serna I'll take the opposite approach of the others, I don't know the area and it may be a good deal. But cash wise, if you're renting it for $2k and your mortgage is $1900, then you're losing money each month once you account for vacancy, maint, CAPEX, etc.

Plus with it being an investment property, 25% down on $180k = $45k cash (plus closing costs), plus another $20k for repairs, that's $65k cash out of pocket to be break even each month at best (and again, prob losing money each month accounting for other expenses).

@Aarielle Pannesi  Great to hear you found a potential deal!  For investment properties, I prefer to look at my local banks first (which can be the same as a portfolio lender).  They tend to be more flexible on the property condition, documentation, etc but have slightly higher rates.

I did two refi's last year before rates started rising.  My local bank offered me 4.5% on one property.  The other I used Sofi, a national lender, and they offered 3.125%.  SoFi was full doc but had a slighter better rate as you can see.

Both loans have no pre-pay penalty.  Hope that helps!

@Mike Campbell  I don't think I'm understanding where the "cash" is coming from in this deal.  It's a seller finance so say you put down 5%, or $10k on a $200k purchase and the seller holds the note.  The seller wouldn't have $25k cash, only the $10k you gave him for the downpayment, which I'm sure he would want to hold for security.

Unless you're giving him say, $50k down, and he'll give you $25k back?  

As a side note if you're not sure what it's worth, get it appraised.  You don't want to pay $200k or $225k when it's only appraised at $175k.

@Havan Surat  As others mentioned, very tough to get 100% financing.  Also remember even with a high amount of financing, the lender will want to see you have reserves to cover the project in case it goes over budget. 

You'll also need to "front" the initial work, and then you'll get reimbursed under the draw schedule of the loan.  The initial work can easily be $10-20K + before you get any money back.  And of course there's the standard closing costs of the loan, initial insurance payments, permits etc.  So be sure to factor all that in.

@Deb G.  Also try some of the local banks to your area. VT can be very specific to your county, so do a quick search of your area, or check with the banks or credit unions in your town.

Welcome to BP!