All Forum Posts by: Brett Chupka

The only thing I want to point out is you're not technically "assuming" the loan. When someones assumes the loan, I believe that means their name is actually transferred off the loan and is hence no longer responsible.

With a sub2, the sellers name is staying on the mortgage and you are just taking over payments direct to their bank. The seller still has risk in that situation. 

John, I would also give a listen to the newest BP podcast episode that came out yesterday with Pace Morby. He mentions how he puts balloon payment extensions into his contracts in case that situation comes up where you can't refi and get all the money you need out.
Essentially he has a clause that if the house doesn't appraise for X amount needed to cover the original mortgage, then the balloon extends another term (5 years in your situation) with the same interest % etc etc. That was the first I had heard of them but if the seller agrees then it is what it is.

Hi Steve, I thought a wrap would work well too but having to wait such a long time for a refi isn't ideal. If my main exit strategy was to sell though, do you still think a wrap would make sense? I could always go the route of using a hard money or private money and just doing a straight up cash purchase. My thought was any bit of seller finance though would help lower any hard money expenses. 

Hi everyone, looking for some advice. 

I've been speaking with a seller off market for a SFH value add property. I'm trying to find the best way to go about structuring this deal but it seems like there are so many options and I'm just not all that familiar with most of them.

End goal would be to fix and flip, maybe BRRRR. Probably 4-6 month hold period with most of the work self performed. I'm trying to purchase it with as little down as possible. The seller said they are interested in seller financing but they still have a mortgage of about $130k. The mortgage is what is throwing me off.

I feel like typical sub2's are for long term holds. Like I mentioned, I'd be looking to sell or refi in 4-6 months. Does anyone have any experience using sub2 for flipping? Does it even make sense to use it sub2 for flips? It seems like the sellers tax benefits of seller financing would go away if my intention was to flip it. He would end up getting a lump sum after I would sell the property. 

I thought a wrapped sub2 would be ideal for me because I can get into it for a low down payment and probably afford a lot of the rehab budget without needing a hard money loan or something along those lines. The seller would also get a little more interest in the mean time so it may be a win-win. Any sort of input on this type of deal would be really appreciated!  

Ying, I think Jacob hit it spot on. House hacking is a great way to start and you should be able to find deals in Philadelphia that work with it. If you have roomates or can find them and can rent out bedrooms, that would be most profitable. You can get a better idea of what a bedroom rents for on FB marketplace or roomies.com. You'd probably want at least a 4bed house but 5bed would be even better.
A lot of neighborhoods are evolving quickly in Philly. Finding a place in or near one of those might be a good option for a better price and maybe more upside! If you're looking for a multi-unit to house hack, Philly definitely has some good options anywhere from 200k up. Don't strap yourself for cash though on your first deal. Get a good idea of all the cash you would need for your criteria and save several thousand beyond that in case something goes wrong.
I house hack a SFH just outside of Philly and it has worked out awesome.

Leo, seems like you're on the right track and off to a great start. I think you'll probably struggle to find a good priced multi unit in Tampa but if you do then definitely would be an awesome option. Purchasing a house with a lot of bedrooms that you can rent out individually is a great strategy, especially in a college town. You can also use a conventional loan with 3% down which tends to be a little more appealing than FHA to some agents.

@Mario Dattilo, I'll definitely dive into your profile later, thanks for the content.

Why do you say that about the 50% expenses? You're not far off, roughly $45k for expenses and $110k for income. The $45k does include the current water and sewer costs so without that it would drop to about $25k. 

Hi everyone, I only recently started looking into mobile home parks but I've found a deal that has not hit the market yet and it almost seems like it's too good to be true. It's also 10 minutes from the house I grew up in where I still have a ton of connections. 

My question is what are some common miscalculations that you've heard of or done yourself when analyzing a MHP? 

A little background, the park is 20 pads on well water and public sewer. There are 4 financed homes and 2 vacant pads. Numbers are okay as-is. The water and sewer are all baked into the rent right now which is a little below market from what I'm finding. If I metered each pad the property should run with a nice monthly cash flow. I'm finding somewhere near a 10 cap. 

I've got the operating costs from this past year. I don't think on-site management is necessary. The maintenance cost I ran at $12k/yr which I could see being more but doesn't seem like it is wildly off. What else should I be calculating for? 

Any insight would be really appreciated! Thanks. 

Thanks for the feedback Greg. I've got a little bit more homework to do on this but I do think I'll bring the question up to my CPA again and see if we can draw a better plan up. 

It seems like cost segregation has been a hot topic since podcast episode 689 and I'm going to keep that trend going. 

I too am trying to see if there would be any benefit to self performing a cost seg on a house I purchased this past July, new investor! Here's some quick background:

- $400k purchase price with 3% down payment. Owner occupied SFH.

- The land is not too valuable, maybe $50k-$75k. 

- 5 bedroom single family home - 4 bedrooms rented out since September. 

- I do plan on long term holding. I also plan on purchasing another property early this upcoming summer and hopefully flipping a property this upcoming year as well which is where I thought this would really come in hand. 

- I haven't done any major renovations and don't really plan to in the short term. 

- Full time W2 employee. 

I went and listened to a BP youtube episode with Yonah Weiss and he mentioned there is very rarely a time when you shouldn't cost segregate a new property. I spoke with my tax CPA preparer and he kind of dismissed cost segregation right off the bat. He mentioned that since I hadn't done any large improvements to the property that it probably wouldn't be too beneficial. Does that seem accurate? I felt that with the big difference between money down and purchase price it would be a good option. Should I just start looking for another CPA's opinion? 

Any insight is appreciated! Thanks