All Forum Posts by: Brandon Malone

@Russell Brazil thank you for the great resource. I am certain that if this deal happens I'll contact him to see what we can work out. 

@Russell Brazil As always it's great to hear from someone in the area as well. The property is located in Frederick, MD and is a foreclosure. I always try to bid low on these properties because I, as I'm sure like many others like to see how much equity we can have remaining in the home after purchase. On few occasions I've avoided bidding low only later to see a property close at a price even lower than I would have bid. For example I recall seeing a property sell for 480k list price of 550k off Ranworth in Germantown. I mentioned in my post that I ran my numbers as if I'm putting 5% down even though I'll have to put 20% because I definitely will not move to Frederick to house hack this property. I may look for a lender that can do 15% on an investment property.

@Casity Kao I completely agree with you at 80%-85%, I'd need that property at roughly 195-201. I plan to counter at 197k with same seller assist to see what kind of response I get.

@Alexander Felice @Thomas S., I appreciate the feedback. I'm definitely going to counter to see how low I can go, it appears the general consensus is that even with using the 5% estimate, this is a no go. 

@Dorothy Butala. Thank you for the great analysis. My goal for this property would be cashflow and to build equity. I will self manage the property, I have set up a good system that has worked pretty well for the past four years. I did fail to add in vacancy, but I did work the numbers as if I'm doing 5% down. The landscaping is handled by the association ( this is not usually common in this area, but for this property it is). All utilities will be paid for by the tenants. 

Hi Biggerpockets,

I need some help evaluating a deal. I currently live in the DC area and put in an offer on a property with the following details:

Listed Price: $235k 
Estimated Value: $245k
Required Repairs: $7,500

Average Rents: $1750

My Offer: $190k w/ 10k Seller Assist
Estimated PITI: $1370 (I calculate my numbers at 5% down even though in actuality I'll be putting down 20% because it will be an investment property. At 20% PITI is: $1173). I use the 5% estimate because it allows me to stay conservative in my analysis.

I received a counter of $232k with $10k Seller Assist. If I accept, the estimated PITI @ 5% down is $1520 and $1340 with 20% down. My thought is with $10k seller assist, I really won't be paying any fees to acquire this property, though I will incur costs in fixing it up. Surely, I will counter, but if they won't budge, would you take this deal?

Very similar to @Alan Pederson, I took out a $35k 401k loan in 2016 to purchase my third rental property. I left the company and was lucky that my 401k plan allows you to pay back the loan even after leaving the company. I don't regret my decision to use the 401k loan. Whether I have a a 401k or a rental or any other asset that can generate income as my form of retirement makes no difference. There's no hard rule that 401k is the only method for retirement. I worked for a company that was in the retirement space. Our funds had high fees and I watched many of our participants retire with no more than 200k pretax dollars in the account, with some who fell on hard times and was charged a 10% penalty (free dollars of your hard earned money to the government) to access their own money prior to hitting their retirement age (set and changeable by the government). Do what you feel is best to secure your future and know 401k is not the only method. 

I have a general understanding of this topic, but I wanted to pose the question on here to see if anyone has experience with tax lien sales and how often this actually works in their favor and what the risks are. So my question is two fold: 1. How does a tax lien sale work? 2. What are your success rates?

@John Peterson I see a lot of people responding with a "sell" vote. I disagree. I see no reason to spend 6% to sell an asset, just to turn around and spend more money in fees to re-purchase another investment property. I am in full agreement of the people who recommend you refinance the property to a 30year mortgage to drop the mortgage and generate some cashflow.  You might even be able to leverage some of the equity to purchase another property (assuming the numbers work). Work the numbers on refinancing to a 30 year and see what your comfort level is. 

@YiBing T. Nice to see someone from my local area. I have a few properties in the area and one in Montgomery Village. As for HELOC to pay off your mortgage, the concept really caught my attention, so I did a lot of research and ran various scenarios using an amortization table using the HELOC method vs making extra payments. In the end, what I concluded is that you're better off just making extra payments, since the payoff comes in very close together. I'd even argue that making an extra payments beats the HELOC method slightly. As for getting a HELOC, I have had success with Navy Federal Credit Union. Good Luck.