All Forum Posts by: Alex Aronson

I am buying a 3 bed 2 bath attached house for 10k cash. House needs 5K in repairs and has an ARV of 45K. If I do a 75% cashout refi, for a mortgage of $33,750, what obstacles do you see me running into?

IE small mortgage amount, seasoning, etc?

My realtor is putting a deal together for me to acquire a large number of duplexes from a seller (10 to 30 plexes all together (20-60 rental doors)). The duplexes are all fairly close together in a rental rich, blue collar, low crime, neighborhood, already producing income. Some of the tenants are Section 8.

Any lenders interested in the deal? Amount to be borrowed will be $1,000,000 plus.

Credit Inquires can hurt your credit even if the inquire is with an entity that you have a present relationship. The issue is, how is the inquiry coded. If it is coded as the bank is just checking to see how you are doing, that is soft, if it is coded as you are seeking funds, then that is a hard inquiry which will hurt your score.

I would send the bank the following letter:

Dear Creditor:
In a recent review of my credit reports I discovered an inquiry from your company. I do not recall authorizing you to review my credit. Accordingly, I would like to be sent proof that I initiated or requested for you to review my credit. Please respond at your earliest convenience.
Based on the FCRA, I must have authorized you to review my credit with written permission. Please forward a copy of that written authorization. If you are unable to provide me with proof or do not retain records of such authorization, please promptly remove the inquiry from my credit report (name which credit bureau) and send me written confirmation of the removal.
Thank you for your timely reply.
Sincerely,
Joe Consumer

This should fix your problem.

I have met two agents out of several hundred that I thought to be ethicial and had my best interest at heart.

Ethical agents for the most part (even in states where they are suppose to exist) do not exist.

Hello,

Can someone with experience buying commerical properties outline what someone should expect in obtaining the loan process?

IE Letter of Committment, Letter of Engagement, Average Closing Time, different type of inspections required, etc.

What fees should somone expect to pay and when while completing a commercial loan.

How much profit have you thought about trying to get from this project.

The way I do my analysis is like this.
Retail price is 95K
Subtract 10% for error = new goal retail price of 85,500
Subtract another 10% from my new goal retail price for closing cost and commissions
Subtract how much profit I want
Subtract how much rehab is going to cost
Subtract holding cost (utilties, insurance, PI, taxes, ongoing yard maintenance).
After all of that, you should be able to deterim the most you will pay for a property.

Most banks do not have an appitie for real estate investors unless they already have a good relationship with them. You might want to try a commercial bank that deals with flipping property like ReCasa Financial. Business like that will fund your purchase, soft cost, and rehab cost at 100% as long as the cost do not exceed some % of the ARV.

If i were a bank, I would be concerned about your cash reserves since you do not have a track record. Older homes offer much larger challenges when it comes to knocking out walls and stuff.

If I were a lending institution (which I am not) I would feel better if you had a puff and power rehab (paint, carpet, fixtures) you were going to do as your first rehab.

Justin,

All realtors are licended by a state agency so you can complain at the state level such as in TN, we have the Tennessee Association of Realtors. Also, many realtors are in various associations that are area specific. For instance, in Memphis TN we have the Memphis Area Association of Realtors otherwise known as MAAR. These associations have a review board and can place fines and recommend pulling licenses. If you want to find one of these associations, just google your states name and the words associations of realtors.

Mike,

When attending a local REIA, becareful of the people there. The associations are great for learning and networking. At my REIA, I have found a lot of sharks. The sharks do not want to hurt you infact they want to help you success, however they most often do not provide you with the best deal to start at.

I would recommend developing a Business Plan. For example, write down where you want to invest and what you want to invest in. How many properties do you want to accumulate in year 1 and so forth. Who do you want on your team (real estate investing is a team sport and does not start out a singular sport): Real Estate Agent, mortgage broker, banker, inspector, insurance agent, CPA, real estate attorney, property manager. I have walked away from 3 deal because my team mates told me to (IE the house repair is more than you can handle, that part of town is nothing but problems, you'll have a hard time with that property).

Read as much as you can on this sight. I found the Kiyosaki books (Rich Dad series) to be motivational and to think like a investor. I read other authors for more detail in the topics I learn from. Do not pay for a 3K class when you can get the info for free at your local libaray.

Ask a lot of questions here and at you reia.

Buying real estate in any size city is ok as long as you buy right. I mean well below market price.

In smaller cities, you need to look at the job base, how many industries are there, and how are the few major employers concentrated in?

For example, think of small coal towns in PA or in West VA or textile towns in SC. When the industry dried up or changed, those towns did not go away, but the population and the value of the land and buildings went way down?

Doesthe small town that you are looking to buy in have any of the following?
-Close to a bigger town (less than 30 minutes away)
-Have a State University or a real good private University?
-A regional hospital?

If you say yes to one of these, your small town has some staying power. If you say yes to two then you are probably ok. If you say yes to all three, I would start buying all that I can as long as you are buying right!

Good luck, and happy investing.