All Forum Posts by: Andrew Bosworth

Once a property is listed for County auction (Sheriff or Tax), is it still possible to make a private offer? If so, would you recommend approaching the property owner or the lender? My assumption is that since the property is up for auction due to foreclosure, the lender would probably be the best option. Thoughts?

Depending on whether I contact the owner or lender, what would be the proper approach? Letter, calling the lender directly, going through my RE agent...?

Jay,

Welcome to BP! I live in Harrisburg, though my day job gets me to Pittsburgh regularly. I keep hearing good things about REI in Western PA. Good luck as you move forward.

Andrew

John,

Is your agent an independent agent or direct writer for a particular carrier? Were your rates changed mid-term?

As you probably know, rates are subject to change at renewal or if coverage changes are made (new property added, liability changes, etc.) during the policy period. I am less familiar with a direct writer, but in the case of an independent agent, they do not have sole authority to change rates. This is ultimately determined by the insurance company (underwriting). An agent may make a request to the insurance company to raise or lower rates in order to be competitive, but this does not mean that the insurance company will comply with an agent's premium request.

If you are concerned, I would suggest asking your agent to give you an explanation of the premium increase.

In case you've never seen HUD's Fair Market Rent site, you can access it here:

http://www.huduser.org/portal/datasets/fmr/fmrs/docsys.html&data=fmr14

This provides a good barameter for determining rent in a particular state and county.

Will,

What experience do you have with seller financing? Do you see many deals structured this way? I've hear a lot about it, but don't know enough yet.

Here is a scenario I am considering (it would be my first deal by the way!). There is a banked owned home I am looking at with the goal of flipping. It needs considerable amount of work done, but running the numbers it looks like a good deal. It has been on the market for over 3 months, so I think I could get the house for around $30,000 with roughly $60,000 of rehab with an ARV of $140-150K. I have some capital, but I do not want to use most of it on a down-payment - especially my first deal where I know there will be a huge learning curve and in my opinion a higher risk to me.

...So back to the seller financing...have you ever seen a bank owned deal where someone has negotiated both the house and the renovation loan directly with the bank that owns the property? Being a new investor with modest capital to spend I need to be creative in my financing. What are your thoughts? Do you think this would work?

Thanks for your feedback Scott. Private equity seems like it would be the preferred option.

My wife and I used to live in Phoenix. At some point I would like to invest there as well. How long have you been doing REI? Are you focusing on any particular area of the city?

...what other lending options would you recommend where you can put 5 or 10% down? Just talked to a lender that told me the only option with a Fannie/Freddie loan on an investment property is 20% down.

Dana,

Maybe you've done this already, but I would encourage you to offer your best "pitch" to your spouse prior to moving forward. This is only my opinion, but it will go much smoother long-term if both of you are on board. I caught the REI bug long before my wife did and she was initially very much against pursuing this type of investing...it's both of our money after all. I was convinced that REI was a sound investment for us, so I took the time to put together facts and figures (and prayed a lot!) to show her what led me to this decision. This took some time, but she is now on board - which was a major hurdle to jump. I'm much more confident moving forward now since we are on the same page. Heck, our spouses may be the toughest people to convince! If you can do that, then negotiating future RE deals may come easily for you. : )

As far as setting up legal entities, it looks like other BPers have already given you some good advice. As for a happy marriage, there's nothing better.

Randy,

As an insurance agent, I would recommend purchasing a separate policy for the LLC.

Welcome Anish. I live in the Harrisburg area and am new the REI as well. Bigger Pockets is a great place to learn and meet other like-minded investors. All the best to you!