Am I using to much of my money

Financing, Hard Money Lenders, Private Money
1

I am a rehabber digging myself out from a pile of bricks. :slight_smile:
I have 4 unit bldg ARV $300K refinanced to get 80%LTV. Existing mortgage 145. I am expecting approx 95K. I want to buy another 3 unit bldg. Lenders say I have to put 15% down. Should I use my money to buy, 15K and 15K to fix out of my pocket, total $30-35K Credit score 510, low DTI ratio - Is there a better deal for me or better way to buy. 3 unit price 105K

2

I am not a mortgage broker, but I have seen some financing deals where the repairs and other costs were added to the seller side of the purchase-sale. In your case, that might be 15K. So the sales price would reflect that increase. This would free up your 15K cash you would have invested in the property for fix up.

3

Thanks for the suggestion. I realize just because you have money - you should try not to spend it.

4

If there is one thing that I have learned in REI it is to use OPM (Other Peoples Money) :beer

5

If you can afford to do it 100% out of pocket and still have money for reserves go for it. Save on interest and points. Obviously if you are going to fund a few more deals while this one is going you should hang onto your cash as much as possible and outlay only what you have to. If you don’t plan to do anything else until this sells I don’t see why you wouldn’t try to save some money and and use your own cash.

6

I am a mortgage broker and every deal is different.

Simple rule of thumb; 'What will cost me less? To use my own money (and have less on hand for ANYTHING else) or borrow what I need until I can sell the project (have to add in EVERYTHING for the next X months until it sells).

The easiest way to do this is to get a broker so you’re not dealing with imaginary numbers - know both sides and what their potential profit/pitfalls are and then make your decision.

Your education is your best defense against making a mistake.

Good luck,