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Author Topic: What is Rehabbing?  (Read 20396 times)

Offline Mortgages

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Re:What is Rehabbing?
« Reply #15 on: February 06, 2005, 06:50:53 am »
Hello everyone!  I was away all last week so I am catching up on posts this weekend.  Mr. Fancypants has got the goods on this one and we have been discussing loans that help rehabbers.  True rehab loans also help with the problem of seasoning issues when selling the property, conventional banks don't want to finance flipping! But when you purchase a bank owned or distressed property the rehab loan helps you get from point A. (purchase) to point Z (sale) without seasoning issues.  During the renovation phase it will require inspection of progress and title updates which will allow you to sell legitimately at a much higher price.  Also good rehab loans will allow you to escrow Mortgage payments so that you don't pay a dime during construction.
Provider Of 100% Investor Financing
Renovation and Rehabilitation Loans
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Offline Ivseenproof

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Re:What is Rehabbing?
« Reply #16 on: February 10, 2005, 05:38:29 am »
Hey Fancy,

Do you mind sharing which financial institution you've been working with to get your 80% ARV, no down pymt, low interest rate and no prepayment penalty.  I have a pretty strong debt to income ratio, solid credit history and nice amount of cash reserves and the companies I've talked to act as if I'm speaking a foreign lang. when I start mentioning the conditions of the loan I'd like.  I've only talked to 4 institutions so far but they all act as if these terms are impossible and I'd like to save myself any unnecessary wheel spinning.  I realize that your experience in the market prob has your lender comfortable w/ extending you these terms and that a newbie like myself will prob have to settle for a little less but I'm just trying to find a company that acknowleges that these kinds of terms exist and one day, when I've proven myself as a savy REI, will extend them to me as well.  Thanks in advance!

Offline thob77

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Re:What is Rehabbing?
« Reply #17 on: February 24, 2005, 05:08:53 pm »
Bring out the "ole dog and pony show".  On my first rehab, I laid out my plans for my REI.  It also helped that I had a standing offer on the table for a property with 2 rehabs on it.  Bankers Like to know that you are serious.  My first 5 rehabs were with the same banker.  We had never met before my first visit.  I laid out in detail what I wanted to do to the properties and how I was going to do it.  I also gave him an itemized cost "gestimate" sheet.  It also helps if you do your best to sound confidant and secure in your plans.  Hey, I was really nervous the first time.  Now me and my banker are on first name bases and I value his opinion on my projects.  I hope this helps!

Offline acoolmariner

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Re:What is Rehabbing?
« Reply #18 on: February 28, 2005, 01:11:08 pm »
Mortgages/Mr. Fancypants,

I'm capable of doing very nearly all work on rehabs myself (elect. plumbing, heating I won't do myself). The lenders that I've been working with say they want licensed contractors to do the work. Is that standard operating procedure or are there lenders who will let me do the work myself? Do I need to get a license or is there a way to work around that?
Knowledge is power, Ignorance is powerless.

Offline Mr.fancypants

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Re:What is Rehabbing?
« Reply #19 on: February 28, 2005, 04:51:55 pm »
I've heard lenders say the same thing. My thinking is that they do it that way for risk protection on their loan. Any joe-blow could run a scam. The thing I recommend is to buddy up with a contractor. I use the same guy on all my deals and we're informal partners. Hope this helps.
Work smarter, not harder!!!

Offline acoolmariner

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Re:What is Rehabbing?
« Reply #20 on: March 01, 2005, 02:42:04 am »
Mr. Snappybritches,

Yeah, this is what I've been doing and that's been working out just fine. I have the time and the background, but maybe it's better this way anyway.

I just purchased a 3Bd, 2Bath home on a small Island. 1/2 acre, 1200sq. ft., Mountain and Water view on both sides, 135K. Largest lot, but smallest home on the Island, cheapest on the Island by 350-ishK. The shape of the house and the plot it sits on, lend themselves perfectly to the additions necessary to bring the home to neighborhood value, but without looking like they were an afterthought.  I have some experience in home design and have drawn up plans that will increase the sq. ft. to 4000. Comps in the area are going for 490K with 1K less sq. ft. and the last four sold were on the market for 4 days, 7 days, 9 days and 19 days. If I'm already in possession of the property and most of the work can be done by me, if all the permits are in place and it's all to be inspected anyway, would protection still be an issue? Are 'construction loans' looked at differently or does all that money fall under the same type of loan?  Any details are yours for the asking.
Knowledge is power, Ignorance is powerless.

Offline joehagan222

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Re:What is Rehabbing?
« Reply #21 on: March 01, 2005, 05:41:50 pm »
If you are capeable of doing all the repairs, find a (PLUMBER<ELECT<Heating & Air>etc person who has a license,and get them to inspect your work. Then you can get them to sign off on your repairs!!!! Useually mine just charges a couple hundred (OR SO) to sign off. According to the distance they have to travel.
Just for you (BABY)!

Offline sestep

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Re:What is Rehabbing?
« Reply #22 on: March 04, 2005, 12:11:38 am »
Mr Fancypants,

Do you know the name of the loan program you are using?  I have 1 rental that I bought in Aug 04 and am clearing $150 a month.  I also just bought a house that I am rehabbing as we speak.  (closed 12/31/04).  anyway, my loans are thru homecomings financial, I have 100% investor financing, I pay slightly higher interest rate for this, and to avoid a prepay penalty I pay a little bit more on interest.  Homecomings will allow you to have 1 million in loans.  Your product sounds better though since I am paying principal.  My husband and I have very good credit, so I would like to check out the same type of loan as you have on my next rehab.

Offline acoolmariner

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Re:What is Rehabbing?
« Reply #23 on: March 06, 2005, 10:46:02 am »
joehagen222,

That is a damn fine idea. I never even thought of that as a possiblity. Have you done this before? Is it reasonable to assume that a contractor would put his name to work he didn't do, provided it's done correctly? As a contractor talking to an ex-contractor, I suppose he could tell if it was done right....I could with a Fluke and a few other tools. Great idea. Thanks. -acoolmariner
Knowledge is power, Ignorance is powerless.

Offline joehagan222

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Re:What is Rehabbing?
« Reply #24 on: March 06, 2005, 05:40:47 pm »
Hey Cool;

There may be some contractors who will sign off on a job they didn`t do,but I was talking about an indivdual licensed in there field who would like to make a few extra bucks! There are many who work for a large company for wages! They are lead men who usually have a crew under them. I know of several in the D.F.W.Tx. area! You just need to look and ask questions! (OK)!!!!!
Just for you (BABY)!

Offline moke

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Re:What is Rehabbing?
« Reply #25 on: March 16, 2005, 03:53:29 pm »
hi

coolmarine

wen you buy a place you can get a licence from city hall

to fix the place,in a lot of states that is.

if the lender wants you to get a contracter tell them to drop dead.or

#$$^^& off.

go for it!!

moke

Offline joehagan222

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Re:What is Rehabbing?
« Reply #26 on: March 16, 2005, 08:49:13 pm »
 Hi,

Rehab is to rehabilitate a house that is in need of major repairs.
Just for you (BABY)!

Offline Inittowinit

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Re:What is Rehabbing?
« Reply #27 on: May 24, 2005, 03:42:36 pm »
Wow that first reply to such a general question was one of the BEST replies I've seen. Thanks for such a clear, spelled out approach to what sounds like a great way to invest in properties.

The responses are great!  Very informative and helpful.  I even printed a few out!!!!   :D

Offline suzcooney

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Re:What is Rehabbing?
« Reply #28 on: May 29, 2005, 10:31:52 pm »
Hi Mr Fancy pants.

I just bought a house in Baltimore City.
that needs work.
As I dont live there i live in New York City.
I find it hard to get to know contractors.
And I have been totally stung in the past for eg with pluming,gas .
I already have a house rented and I eventually had to pay 3 plumbers to fix a simple job.
I wanted to know if u could help me with my new purchase.
It needs total rewiring and plumbing all the walls need plastering what is a rough estimate for each one of these the house is about 1400 square foot. Please respond I would really appreciat it.Any baltimore people out there ?????????>? ;D

Offline AKwldlndfirefghtr

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Re:What is Rehabbing?
« Reply #29 on: May 31, 2005, 02:32:08 am »
To go a bit further, how do taxes come into play?  What are you paying on taxes from your sale, and at what rate?  Some sort of short term capital gains right?  You can claim expenses, such as contracting fees, but say you did some work, you can write off the supplies as an expense, but isn't there some way to also write off the time (aka pay your self) for the work done.  

Just curious how the whole picture comes into play.

Thanks in advance.
Cheers :beer:

Jason

 




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