All Forum Posts by: Mitch Dowler

Robert I don't see retail properties as being viable buy and hold investments in western Washington. I am currently working on a Homepath deal and it will be a great investment IF I can get a deeply discounted price. It has been on the market a long time with a failed sale and no other offers. I am currently in the counter offer process. I use Property Evaluator Pro on my iPad as an evaluation too. It is easy to enter the numbers you know such as list price, offer price, taxes, and insurance. Use a conservative vacancy and maintenance percentage rate that you are fairly certain off. After the debt service and all expenses I like to see at least $200 in positive cash flow on a single family. The software allows for multiple units as well. Tough market here in western Washington but a good rare deal may be found. I also purchase buy and hold out of state where there is a lower price point and it is much easier to find strong positive cash flow for under $150,000.

Amanda, sorry I didn't reply to your question. Credit score is not the end all point in tenant screening. I look at the number, type and how recent collections are. I look at whether there was a bankruptcy and what has happened since. I look at public records for criminal convictions and evictions. I have some wonderful tenants that went through a bankruptcy and lost their home because of unforeseen circumstances.

If I were in your situation I would take personal action on my own credit report. I did this myself many years ago. I would select three of the negative items on the report and dispute them with all 3 major credit reporting agencies. Note that this is work and requires patience. Do not accept simple statements such as "collection was verified" or a screen shot from the credit reporting agencies data base. Ask for a copy of the original documentation to validate the dispute. Remember that they only have 30 days to investigate and if they can not produce this demand that it be deleted. You want items deleted if possible, not marked as paid off or charged off.

You will likely be able to get many items removed in this way and others you may not but in the end your situation can be improved greatly. If there is any partial information listed demand it be fully documented or deleted as well. Watch that items age out as they should and become familiar with the law on credit reporting and collections.

If you are communicating with tenants, walking the property, asking if tenants need anything and evicting tenants, then by definition you are not a silent partner but an active investor. It is a big, big difference in what was agreed to in the investment and a big difference when it comes to filing your tax return.

Fannie Mae was slow to reply and came back with a full price counter to my offer. I am coming back again with an incremental boost up on my offer. There was a failed sale on this place and no offers since. It was even posted as an ad and didn't sell. I know the neighborhood well having lived in the very desirable area and do still have another rental nearby. I am a persistent type so drive on I will. If I don't end up with a Homepath this time I have another ATM Machine investment waiting in the queue.

Just like conventional Fannie/Freddie investor financing. Some only go up to 4 properties, others will finance up to 10. I work with brokers that specialize in investor financing to get the mission accomplished. Brokers that primarily work with owner occupied can cause delays and failed closings.

I just want to reiterate that the Homepath program DOES NOT require PMI ore mortgage insurance for a 10% INVESTOR purchase. My lender knows this, my real estate agent knows this, and Biggerpockets has a page on the Homepath program as well that state this. The interest rate last week from my lender was 5.25% with no points. My lender knows my situation well and I just completed a refi with them one month ago.

http://www.biggerpockets.com/mortgage/homepath-loan/homepath-loan-or-fha-loan/

There have also been changes to the Homepath program which make it a better deal than it once was for investors. The Homepath web page specifically states that financing for more than 10 properties and up to 20 is under the following terms:

• Up to 20 financed 1- to 4-unit properties
• Individual and LLC borrowers eligible
• Loan to value max 70%
• No lender-requested appraisal
• Flexible mortgage terms (fixed-rate, adjustable rate)

http://www.homepath.com/investors.html#mortgage-info-content

Research for yourself and find an experienced Homepath lender and an experienced Homepath agent as I did. Do not rely on the information I pass on alone or the information from detractors.

You can claim to only be the property manager but a lease must be signed by the property owner or the agent of the property owner. Ownership of property is a matter of public record. Even if ownership is via LLC that just adds one more web site to locate the LLC members. It could be very worthwhile to live there the two years required to land that owner occupied FHA loan. After two years move elsewhere because you have already met the owner occupied requirements. If you hire property manangement to to care for your tenants they will probably never know you own the property.

I am not clear on how you are trying to make this purchase. Is this an invest to be owned by your Roth IRA? SDIRA investments can not have debt service that is personally guarranteed. It would have to be an non-recourse loan that only the IRA is responsible for. You may also be thinking of liquidating funds from the Roth IRA so that you personally own the investment. If you have a tiny salary how would you pay the mortgage if you had a vacancy in one or both units simultaneously? What about major repairs that can crop up unexpectedly?

By federal law section 8 is optional for the landlord. Chicago is actually breaking federal law if they require it to be accepted. There are several activist type markets in the U.S. that I would recomend not investing in or exiting at first opportunity.

Ha! I bet I received some of your mailers. I get them constantly from other investors wanting to purchase my buy and hold single family in Dallas :)