All Forum Posts by: Afam Agbodike

You can do it, but you will almost certainly be leaving money on the table. Turbo Tax is going to take the most conservative tax approach as they don't want anybody coming back to them saying they got the taxes wrong. A professional will most likely be able to more than pay for their fees in tax savings, plus save you time.

Quote from @Misti DelMar:

Also, good to know that the down payment remains the same as the appraisal. I didn't know that! Thanks again :)

Just to clarify: the downpayment is not the same as the appraisal, but it is not affected by the purchase price, unless the appraisal comes in below the purchase price. My main point is that the downpayment is not impacted by offering over the asking price (although I still suggest finding a property that you don't need to offer over asking)

Hi @Misti DelMar Don't be discouraged, $20k-$30k will definitely allow you to buy, especially given than you are open to location.

If you are planning to owner occupy you can do 5% down with a conventional loan, or 3.5% down with an FHA loan, which gets you anywhere from $400k to over $650k, which leaves you with tons of options. If you are planning to rehab, you should look into the FHA 203k program, which will allow you to also finance the rehab costs, while still only putting 3.5% down, I did one of those myself. There are more hoops to jump through, but it is definitely possible.

I don't like bidding over asking as it doesn't suit my personality, but one thing to know, just because you bid over asking doesn't mean you need extra cash. The loan will still have the same downpayment requirements regardless of the fact that you offered over asking, as long as the property appraises.

There will be plenty of realtors happy to work with you so don't worry about that at all. Some markets may not work for you, but usually the properties that go over asking are the nicest ones, but since you are looking to BRRR you want the less attractive properties anyway, just look for properties that have been on the market for a month or more and you shouldn't have to worry too much about having to over bid.

Keep up your spirits and good luck! Keep researching and learning, you are on the right path.

@Nick Furukawa If you've got good income, but limited savings, I'd suggest going for a smaller property. You can get in as low as 3.5% with an FHA loan, I believe on up to 4 units, but you would have to live in one of the units for at least a year.

I'm in CA, so I can't speak for NV, but it is pretty standard for lenders to require certain things be finished before closing a loan, and water heater strapping is one of them. It doesn't really have anything to do with value, but risk to the lender. If a water heater falls, it can cause serious injury or death, and can also cause lots of damage to the property, so the lender wants to minimize their risk. If you paid for the water heater to be strapped you can potential show the receipt for the work, or talk to your agent to see if the fee can be waived, but you might just have to take the hit.

Hi @Karla Simmons I worked as an agent many years ago worked with a few owners that rented to section 8 tenants. One of them preferred a mix of about 50/50 section 8 and market rate on his properties. The quality of the tenant had very little to do with with whether they are section 8 or not, they can be good or bad just like a market rate tenant, you need to do your best on screening and setting expectations as you would with any potential tenant. The benefit of section 8 is you are pretty much guaranteed your rent as long as you keep the apartment up to a minimum standard (which was not very stringent based on the properties I saw).

seconding Brandon, you can just do a cash out refi, or HELOC. A HELOC would likely be faster, but higher interest, but you can always refi into a fixed rate loan after the remodel.

@Gil Segev I believe all of the states I posted above have many properties well under $100k. My method:
1. Go to zillow

2. Type in a state

3. Enter my max purchase price

4. Select the type of properties I'm interested in (such as single familty)

5. See what comes up.

I just did that for texas and it shows over 1,300 properties matching my criteria. Of course most wont actually work out, but I then start clicking around and see how they look.

After that I find a town that looks promising, and search the town name for rentals, to see what the going rates are. After that if it looks good I start looking in more detail at the town, does it flood? how is the crime? Etc. How long are the properties on the market?

There are many places with properties under $100K that look promising to me, positive potential cash flow and beating the 1% rule. I can't say they will meet your criteria, but my preference is to find properties that have been on the market at least a month. If I can get into contract I'll do a home inspection. I know it will cost money, but it will save me from buying a money pit. If you find a good real estate agent they may be able to connect you with a contractor who can give you a rough estimate for free.

@Gil Segev Can you look for a different market? Going in out of state on highly competitive bidding and not having an opportunity for inspection sounds very risky, can you choose another market? Not all markets are as competitive as that.

Hi Leo, good luck on your search! I'm new to this world as well, just started searching a couple weeks ago, but there are a LOT of areas in the midwest and south with properties under $100K that are cashflow positive, hitting above at or a bit above the 1% rule. I'm still a ways from picking the market I want to be in, but I've looked in OH, IA, GA, AL, TX and a few other states and have found a number of promising locations, especially if you look outside of the major cities. I haven't dug in deep yet, so it is possible they have terrible crime problems, or something else that will make it less interesting, but so far I've been pleasantly surprised. For the most part it's nothing mind blowing, but I think as Rookies we shouldn't expect too much in our first deals, but the opportunities seem to be out there!