All Forum Posts by: Account Closed

Quote from @V.G Jason:

Sounds like you just kept staying extremely leveraged, that works in a booming economy which seems to be your timeline. Try that through some cycles, you'll get laid out like a towel.

It wouldn’t even be possible through a few cycles. You’d never get the NOI or the equity to be able to leverage at that speed. As with every strategy here on BP, it’s only advisable during certain parts of a cycle. 

Neither of us were married but my relationship survived it all. It is repeatable…it only requires any two people that have an income and trust one another completely. A married couple is actually ideal because the tax exemption is double for the family upon sale. The married couple would need to take on the loans as individuals and be named on the deed as individuals. 

To be clear here…your HELOC payment will become part of your DTI calc

Using simple numbers let's say your HELOC is for $50k and your monthly payment during the draw period is 1% or $500/month.

You now have an additional $500 in debt that will hit the debt side of your DTI. If your DTI was at 50% before the HELOC, this can be a deal killer so run the numbers accordingly.

Quote from @Eliott Elias:

Quote from @Scott E.:

Quote from @Eliott Elias:

If the investor stops making payments the owner will have to foreclose on the investor to deed back to their name. The investor probably want's to avoid that, but is a possibility. 

Not true. Everything about this is wrong. Elliot are you a robot or a real person? I see you around the forums every day and most of your posts are either misguided or full of hot air. I'm not trying to be the forum police here but it's annoying to see somebody consistently offering bad advice on posts.

 How so? Be more specific and offer some real value to the people here.

Elliot the owner does not foreclose on the investor. The bank forecloses on the original owner because they’ve stopped receiving payments. He’s right, you’re spreading misinformation on this particular post. The investor runs zero risk of ever being foreclosed on in a sub to deal. They are not a named party to the loan. 

I’ve done my fair share of speculating so I see the angle. What I would say here is that you need to have multiple exit plans in case you’re flat out wrong on the appreciation. Negative cash flow can put pressure on to make an emotional decision. Refinancing and taking on equity investors are the typical route but they won’t work if your home value drops $50k in the next 5 years. Make sure you can fully detail out a few strategies that won’t crush you. Then, fire away. 

Just throwing my two cents in here. If leaving cash in these deals is slowing you down it's probably time to take on equity investors. Give up 50% equity and pull down $100k to move on the better deals. As you go you're going to learn to buy into better price-to-rent ratios so that your DSCR loans still pencil at 70%-80% LTV. But for now, this is a quick way to access your equity without the refi fees.

Hey Bob,

I know that area well. I have a rental there at Norterra in the Union Park Community. I’ve got several all over the north valley and I will tell you that a realtor is helpful. Phoenix is full of bad pockets that only boots on the ground can identify remotely. In fact part of your search area is in an opportunity zone. 

Going at it remotely from OOS isn’t something I’d recommend. Zillow won’t tell you that the neighborhood you’re looking in is next to a cement plant or worse, a wastewater plant that wreaks like sewage half the day. 

This isn't a sales pitch but I am a realtor so take that for what it's worth. There are deals on the MLS. There are deals through wholesalers too. The golden ticket is finding someone to help you identify them from afar.

Quote from @V.G Jason:

Alright, so I'm trying to understand something as an OOS about seller financing. If I go to say Charleston and want to buy a property, I'll likely have a real estate agent take me around and show me the good neck of the woods & bad areas. When it comes to an offer, if I want to propose seller financing, how do the agents get compensated? From the downpayment? 

I'm thinking the areas I want to go to will both have agents on both sides, as these will be likely MLS properties. 6% of list price versus 6% of downpayment isn't a small difference.

Typically the agents are compensated regardless of the type of financing used. Their agreements with their clients stipulate that they be paid for their efforts. The agent still gets paid in an all cash transaction too.  

The seller agrees to a certain commission with their rep, and that sellers rep agrees to pay the buyers agent a cut of that fee. 

Hope this helps!

Assign some value to the property you own. Let's say it's worth $50k. Create an LLC and generate a partnership agreement. Spell out in the partnership agreement that you will contribute the land plus $50k cash. Your JV partner will contribute the work/materials to build it and all parties agree this work will be valued at the equivalent of a $100k owner contribution on behalf of the named partner on or before an agreed upon date. Each partner will own a 50% share of the LLC. Obviously much more to the partnership agreement terms but that's the nitty gritty. Good luck!

I feel like most of these answers are a bit short sighted so I'll throw my two cents in. The goal is to stack assets and bank on inflation/appreciation. If you get to $3M in assets that appreciate at a modest 3% per year that's $90k per year in passive equity you earn every year. In my market that's 10 houses. You could get there in 1 year if you're buying right and doing the BRRR method to recycle your liquid cash. Now sure…you can make $90k doing 2-3 flips per year also…but that's not passive and it's at a much higher risk.

Most people flip for a while to get cash and then transition to being more passive. The BRRRR is the shortcut to getting there in essence.