All Forum Posts by: Andrew Merritt

I contacted them to be proactive about it and it just kind of fizzled out - they said they'd look into it and never followed up.  Eventually I refinanced out of it so it wasn't an issue anymore.

I've worked with one a couple of times so far.  They do good work but they're super backed up - 6 weeks just to get on their calendar.  Let me know if you'd like their name and I can get it to you.  They didn't do any renderings for me though.  I found someone on Etsy to do that for me.

@David M. Thank you for the info.  I'm just looking to get the deal done in a way that benefits both of us.  He gave me a price that he'd list it for if it gets that far and told me that he already has a cash offer on the table for less than that.  

Definitely looks like I'm not interested in the wrap loan as it leaves me too exposed if he falls on hard times or something. I'll need to do some more research on subject to - that may be a good route to go. He currently has a very low interest rate (compared to today's rates) which would help me out. He doesn't have a whole lot of equity as he bought it just 16 months ago w/ an FHA loan.

With the bridge loan, that would just be temporary just for the purchase but then I'd use another lender to transition into a long-term loan.  

I had never heard of a wrap around mortgage but from your comment it sounds like it would depend on the current owner continuing to make monthly payments?  I'll need to look into it but if that's the case I wouldn't want to do that.  

This would be a long term hold

I'm working on securing an off-market quadruplex from someone in my REIA group. He's got a mortgage on it but is interested in seller financing. As I was discussing it with him, I eventually thought about the mechanics of it and I'm not sure if that would be an option? Is it possible to seller finance if they have a mortgage in place?

If not, I was thinking that subject-to might be the best way to go if the lender will allow it.  I can pay him an appropriate down payment for his equity.  Would I be able to have it in the contract that I just pay him something extra per month for X months to make up what he would be getting for seller finance?

Are there any other strategies I've overlooked?  I'm also considering getting a bridge loan to make a cash offer, but that may be less ideal due to all of the closing costs.

@Michael Plante haha yeah, I have this in the back of my mind too

Thanks for the insights everybody. Not sure what I'll do but at least I'll keep looking for something. I do like the idea of STR more in areas more related to industry as opposed to vacation spots. Cashflow may not be as good but I think it would be a good tradeoff for possibly more reliable bookings.

I have several long-term rental properties and am looking to get into STR. Interest rates are going up, but that can be baked into the price. My main concern is the looming recession, in which I would think that people would cut back on vacations and non-necessities. Is this a concern of anyone else in STRs at the moment?

Investment Info:

Single-family residence fix & flip investment.

Purchase price: $248,000
Cash invested: $280,000
Sale price: $559,500

My partner and I purchased a single family home with a detached garage on 3/4 of an acre. We subdivided the lot, fixed up the house, and converted the garage into a two bed two bath home and sold each one individually - $260k for the garage home and $299,500 for the regular home.

What made you interested in investing in this type of deal?

I've been wanting to get into heavier rehabs to allow for more opportunities in this tough market.

How did you find this deal and how did you negotiate it?

No negotiation, we paid asking price

How did you finance this deal?

Conventional mortgage, private loan, and self-funded

How did you add value to the deal?

We turned one lot into two and converted a garage into a home

What was the outcome?

Sold each home individually and made about $30k in profit. Not nearly as much as we had expected but at least it was positive.

Lessons learned? Challenges?

We relied on some poor estimates at first that encouraged us to pursue this project. We also had to deal with the labor shortage, which caused the project to take about five extra months and added to our holding costs. This was my first heavy flip as well, so some items were not planned out as well as they should have been up front.