All Forum Posts by: Allen Fletcher

@Lance Muller

Try to get the property from the executor. If the plan was for the home to be taken back by the bank, find out what is owed on the house, and if the numbers make sense offer to assume the loan. In this situation the bank should be willing to deal or else they will have to go through the foreclosure process and sell the home. This is a bad thing for a bank's bottom line; whereas if they let you take over the loan their books are unaffected.

If the bank is not willing to deal you can offer to buy the home for what is owed from the executor. This will be a slight headache for the executor, but a lot less of a headache than letting the bank foreclose. 

If the two options above do not pan out, you may want to go to the bank and offer to buy the house directly from them. They may have rules and regulations that do not allow them to sell directly to you without going through the auction process, but it is worth a try.

Good luck,

Allen Fletcher

I started out investing solely in the securities markets so I am 10/90 currently. As most everyone above has stated, it really depends on you what the best asset allocation is. I am very comfortable with stocks, bonds, funds, notes etc. and thus have the majority of my assets there, but I am expanding and have found a great avenue to increase my financial stability, real estate!

Good luck,

Allen Fletcher

@Bryan Wilson

Try looking in the forums and on the blog for "subject to" this is probably the most common way of assuming another person's mortgage.

A couple of tips when trying to purchase real estate using sub2:

1) Make sure the lender is okay with the transaction. The seller should look through their closing documents and find a section that states whether or not someone can take over the loan. Also talk to the lender, if you just transfer the deed and start making payments, the lender may call the loan and then you have to pay the balance in full or they can foreclose.

2) Make sure that all mortgage related documentation is sent and controlled by the buyer along with the money. This is just to make sure that nothing shady happens and you lose money or the property.

3) Have a back-up strategy for getting the property refinanced. This is essential to ensure there are no hiccups down the road that could cause you to lose the property.

Good luck,

Allen Fletcher

@Eunice L.

I just closed with them on 23 May and it is true that there is a lot of bureaucracy, but I made sure to keep on top of them and told them up front that they had to close on 23 May. We were actually ready to close (on my end) on 11 May because I kept on them, but the seller was not ready till 23 May so I could not close earlier.

As for the loan type it was a VA loan with $0 down. It is an investment property, but it is a live in flip. While I was shopping for the best deal (I always shop every type of mortgage at the same time to figure out if it is better to rent in an area and buy properties to flip, buy using VA, buy using conventional, etc.) I found that rates on conventional loans were a little higher (4.25% was the best case). Thus I went the route that I did.

Regards,

Allen Fletcher

@Eunice L.

Do a little shopping I just acquired a property using Wells Fargo and got 3.75% negotiated with them to waive all of the fees. It required that I bring other lenders' offers to the negotiating table, but it was worth the effort. Remember that you are the commodity, not the bank's money. If you approach financing with the attitude that you are the valuable asset and prepare your presentation to follow suite, then you will find that banks will fight over your business.

Regards,

Allen Fletcher 

@Jason Malyon

Typically whole life insurance is not a very efficient use of money. Cash accumulates very slowly and the premiums are pretty high. Retirement annuities are a great source of monthly income, but you do pay for the ease of handing over cash and getting a guaranteed monthly paycheck down the road. In your situation I would do the following:

1) Get term life insurance. At your age (assuming you are healthy) we are talking $250k-$500k can cost $15-$50 per month.

2) Re-adjust your budget to live off of only one of your salaries. Try to reduce expenses, pay down, debt, etc. so you can live on your salary alone. This will free up your wife's salary for retirement savings, investing, and building a financial cushion for a stress free life down the road. You may think it is hard to do, but remember live like no one else today so you can live like no else can tomorrow.

3) Create an estate plan that covers all of your bases. If you create the plan early than you have a long time to build it to meet your needs in the future.

Hope this helps,

Allen Fletcher

@Jonathan Jaime Velarde

My advice is to not reduce your retirement savings and instead find other ways to scrape together funds for investing in RE. You are still young thus every dollar you put into your IRA and TSP will have a lot of time to grow. Try instead to find a couple areas in your budget that can be tightened or find another source of income and save 100% of that. One of the bonuses you have being in the military is the fact that you can use a VA loan which requires very little cash to get started. I just used a VA loan to get a property for a live in flip, the property is a SFR worth $270k it needs about $10k of work and it will be worth around $310k. I bought it for $250k and my total costs at closing were $2,700. Keep that in mind.

Regards,

Allen Fletcher

@Bob Romano

Garbage disposals are typically not considered an "upgrade". Every area I have been in having a garbage disposal was almost an unwritten requirement for good tenants.

As for the sprinkler system. If you do not allow the tenant to use the system, how are you going to ensure that your property continues to have great curb appeal? As for controlling sprinkler usage, Are you not having the tenant pay for water? If the tenant is paying, keeping control of water usage is their concern not yours.

Alarm systems are typically maintained by the servicing company. If the tenant wants to activate the system, they are to pay for the service and maintenance. Just make sure that this is clearly outlined in the lease. If a tenant does not want to use the system, than it sits there until a tenant wants to activate it.

Hope this helps,

Allen Fletcher

@Charles Sullivan

@Rick Pozos has the right idea. Go through the effort to try and make this a deal. If it does not work out, then you now have experience and can land the next one. Remember that there are always more deals out there.

Allen Fletcher

@Levi T.

Great point. I always laugh when I read these "Average ..." (fill in the blank). If the report is that general then the only advice you can give is general. Thus my post above.

Allen Fletcher