All Forum Posts by: Danny Day

Kyle M. , yes you are correct. Factor rehab cost into the equation. Some more things to look at is how much equity you can grab on the buy. If it is distressed you might be able to grab more equity than a property that is rent ready. You mentioned FHA loans, you can not buy rental properties with fha loans. You must be an owner occupant and live in the home that you have the fha loan on (or else mortgage fraud). Now here is the gray area. There is no time limit that you have to live there. You must move in, and live there and prove that you had *intent* to live there. This is what I've been told from loan officers. So don't let this discourage you from living there a few years, and then possibly renting it out. But you will not be able to obtain fha financing and not live at the residence.

Another thing to consider. You can't get fha financing on all properties. Read the fha appraisal guidelines here: http://homeguides.sfgate.com/fha-appraisal-standards-1539.html

This being said, you can't buy a property that will need major rehab on an fha loan. Maybe a carpet and paint job.. maybe. One thing to consider, all HUD properties will appraise for an FHA loan.

Good luck

Danny

Quinten Sutton its going to vary depending on who you speak with and how big the company is. If you talk with individual builders, they might have an entire department dedicated to buying land, or one person. Same goes for a developer. Just call up and ask who is in charge of purchasing land and let them know you've got some property they might be interested in, they will put you in touch with the right person. Some developers / builders are private, some are public. Public builders / developers will have cash to close fast, but need approval from higher up. Private builders might not have the cash but they could get the credit, they can make a decision fast. Good luck.

Jon Klaus when you say labor shortages are you speaking of construction only?

Just wondering are you guys taking down vacant lots in built out communities or buying empty lots and putting in infrastructure?

Is anyone here a member of ULI? I am thinking about joining, just would like to hear opinions.

I would get with a realtor to pull comps off the MLS. There has been a large discussion on Trulia and Zillow valuations and they can't compare to the mls. Most users on this site do not use zillow or trulia for this reason.

How long do you plan to live here?
How much are you planning to put down? (FHa 3.5% , conventional 5-20%)

A rule of thumb some landlords use on this forum is getting 2% of purchase price in monthly rent. In my own experience I find that the properties that do qualify for the 2% rule need a lot of rehab. I think it is relative to your local market.

Typically good deals in my area are 1.5%+ in rent on purchase price. The higher the rent / purchase price goes, the more rehab you'll need to do.

Where did you get the $1100 rent from? You might also want your realtor to pull rental comps so you know what they are when you purchase it.. and then when you're ready to rent, pull them again to see if rent is going up.

Hope this helps

Danny

I'm pretty sure HUD will reject your offer if it comes in during the owner occupant bidding period under the buyer name with an llc. I think it only allows you to enter a SSN and not an EIN during that period.

Tom C. makes a good point - what is your reasoning for holding your personal residence in an llc? just wonder

Thanks for your service Glenn Espinosa !

Danny

Buy them lunch and try to push some kind of business their way once or twice a month

Interested to hear replies on this

Sounds like you've got some experience working on the multi-family side. Be sure to convey this to who you want to partner with. Maybe offer to manage the renovation (if needed) of the property, as well as the tenants for a share in the property.

Good luck, keep us posted.

Danny