All Forum Posts by: Bryan H.

Wells Fargo provides the Homestyle loan, I was just looking over my documentation they sent me. There is a lot of paperwork and hoops to jump through. But if you are flipping a property and you brought it right, then you should have no problem with the program. It's much cheaper than a HML but it takes time.

Depending on your intentions to live in the home, you have a couple options.

If you plan on living in it. You can get a 203k.

If the property will be an investment, you will need to get a Homestyle loan.
https://www.fanniemae.com/content/fact_sheet/homestyle-renovation-factsheet.pdf

Find a lender that provides these loans, many do, get pre-approved and make some offers.

Just tell them you changed your mind. What's the worst that can happen? You get sued and must sell?

This is not legal advice.

Find a flat fee MLS agent. For about $300-$500 you can get it listed on the MLS. Then you pay 2.5-3% to a buyers agent.

I've done it before and it worked great. I didn't have to do any showings. The buyers agent, qualified the buyer before they made an offer and worked with them on financing, closings etc. I don't want to work with 'Joe Buyer' as most don't know what they are doing.

That's what i do.

Nope. Those are builder risk / vacant properties. I told them it was a flip I was considering. The agent is an investor so he knows what policy I need.

Just got an estimate on insurance and a nice easy formula to figure it out going forward.

1. Replacement Cost (RC) - if location is insured to at least $65/square foot. RC coverage allows partial loss claims to be settled ultimately without depreciation.

2. Actual Cash Value (ACV) , if less than $65/square foot, but at least $45/square foot minimum. Actual Cash Value settles partial losses with depreciation. This may not be a detriment, depending on your risk tolerance and business model.

So for this house at 1242sf

1. At $55,890 of BASIC, Actual Cash Value coverage, the cost is $39.06month.

2. At $55,890 of SPECIAL, Actual Cash Value coverage, the cost is $53.04/month.

This is though http://www.nreinsurance.com

If you want to buy more expensive homes $80-$100k, there is a good area of Oak Park to buy in. Just west of Ferndale, stay north of 9 mile and east of Coolidge.

This home http://www.realtor.com/realestateandhomes-detail/12721-Sterling-Ct_Oak-Park_MI_48237_M42181-21193?ex=MI553051853

Would probably get you $950-$1000/month rent.

20% down = $12k
PITI= $370
$950/2= $475 - $370 = $105/mo X 12= $1260 / $12k = ROI 10.5%

So more money invested, approximately same ROI. Just depends on how much debt you want to take on and how much money you want to put into it.

When I was still living there, I would have loved to buy in Berkley, rent rates are great. I just didnt have the money to buy as homes are more expensive. A quick look on Realtor.com shows 7 houses under $100k in Berkley. All are on major roads or 2 bed homes. Both were no deals for me. For a beginner, areas like Berkley, Ferndale, RO etc are tough to do. Good beginner areas were Madison Heights (I have 2) and Eastpointe.

If you are patient and can pull the trigger fast (and I mean same day) you can wait for something to pop up in those other areas but they will go FAST. All depends on your motivation to get started.

Hi Eric. I just moved from Madison Heights so I know the area quite well. With $20k, I would recommend looking at Homepath or Homesteps homes. (Fannie & Freddie) under $50k.

For example: http://www.homesteps.com/address/23083-David-Ave-Eastpointe-MI-48021/39658126_lid

This property is in an OK part of Eastpointe. Very popular rental area. Nice looking brick home. It doesn't have a garage, but does have a basement. Ideally, it would have both.

With 20% down, $9k, your PITI payment would be around $350/month.

The house would rent for about $850
using the 50% rule $850/2=$425
$425 - $350 = $75/month profit

$75x12= $900 per year profit
ROI= $900/$9000 = 10%

This is just an example I found in 2 minutes looking online. It's not a killer deal and I'm sure you can find better. But with $20k, you can buy a house, make minor updates to get it rent ready and still have some reserves left over.

Stick to 3 bed, 1 bath, basement & garage. Eastpointe & Madison Heights are good areas close to you. I'd stay away from Hazel Park, Pontiac and Detroit. Other citys you will have a hard time finding decent homes under $50k.

Let me know if you have any questions
Good luck

It should be treated as an other utility, electric, gas, cable etc. But since you are dealing with govt agencies, we get screwed.