All Forum Posts by: Bianca Rodrigues

I have an opportunity to purchase a mixed use property that seller is open to using partial seller finance. The property has two residential units on the second floor and first floor is a retail space. The seller has an existing mortgage on the property and would like to discuss a partial seller finance deal. I am new to creative financing and don’t exactly know the ins and outs of what would be the best way to approach this. I’ve done some research and have found that some banks will allow the seller finance portion from the seller to go towards the down payment of the loan, is that true? Looking for any input or advice on how this strategy actually works. Thank you!

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Need more details. ;-) The following is just general information

It sounds as though the seller has an investment to sell, not his private home. So, things change a bit.
If it is his personal home, there are more restrictions.

For an investment property, if you take over his financing, read through the deed of trust (mortgage) and see how they handle transfer of ownership. There may be something called a "Due On Sale" clause.

Check and see if all tax parcels are included in one mortgage or if they have separate mortgages.

You have to have him spell out what he considers to be a "partial seller financing". He may be actually speaking about a "Wrap".

Find out if actual ownership converts to you

Make sure you have a title report

You may want to pay for an appraisal and an inspection

Make sure you use an escrow company or an attorney to do the transaction

Hi Ken!

Thanks for responding. This is an investment property of the seller, not their primary residence. There are two, one bedroom apartments on the second floor and first floor is currently being used as a convenience store. They mentioned having two mortgages on the property
worth about $400,000 in total. They want to sell the property for $699,000. As of now that is all the info I have. We meet in person next week.

It sounds like they are looking for a buyer who will pay off their existing mortgage and they will help out from a seller finance perspective on the rest of the $699k purchase price.

If they put it on the MLS< what would it sell for? Not what would they list it for, but what would it *sell* for?

Property was originally listed for $1.2mm this past year they’ve done multiple price decreases to $699k. Based on comparable listings recently sold I think closer to $650k there would be more interest.

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Quote from @Ken M.:

Quote from @Bianca Rodrigues:

Hello everyone!

Hi Ken!

It sounds like they are looking for a buyer who will pay off their existing mortgage and they will help out from a seller finance perspective on the rest of the $699k purchase price.

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Hello everyone!

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Thanks for the update! TD Bank wasn't helpful. Didn't seem willing to try and make the HELOC work on my property as well. I am going to try a local credit union and see if I have better luck.

Did you inherit a home that was in an irrevocable trust? I’m curious because my parents are thinking of putting their home in an irrevocable trust.

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Hello!

I currently reside in Massachusetts and would like to look into RE opportunities in Columbus, Ohio. I’ve done my own research on the area, but would like to get a better perspective from a local real estate agent in the area who has more knowledge about the current RE market, better neighborhoods to invest in, and preferably someone who has worked with out of state real estate investors and buyers.

Thank you!

5 Votes

Columbus, Ohio

Quote from @Remington Lyman:

Quote from @Bianca Rodrigues:

Quote from @Jeremy H.:

Buy box...First I narrow down the type of property, the size, the location etc.

For me location comes first - I can change almost everything about a property other than the location (this will dictate the school, crime etc). After that I must have 2 bathrooms - one bathroom makes the property hard to rent and later sell. Type - I'm open to - 1-4 units, SFH - all ok

Now we've got the type narrowed down and need to make the numbers work.

For me on a SFH, after all expenses are paid (PITI, PM fees, vacancy, repairs/maintenance/cap Ex) I want to make $150 per door. For MFH I want $100 per door. Now that the cashflow is settled I look at ROI - this depends based on the property and location. For an awesome SFH in a great area I'll do 7% CoC ROI, for a MFH I'm looking at a minimum of 15%. On top of that I need equity capture at the buy. I'll go up to 85% ARV (after all expenses are paid) on a great property in a great location. Mediocre location I'm looking at being all in for 75% ARV (this is again after all rehab expenses are paid).

So there's really three things I'm looking at to meet my criteria - cashflow, CoC ROI and equity capture at the buy

Here lately I've been hovering the 82-85% ARV mark on my SFHs after the rehab - we're still dealing with high prices and now high rates. Makes it a little more difficult that it has previously been.

I will likely be taking a year or so break after this next one just to let everything get settled. I've done 5 properties in the last year and a half and I'm just burnt out

Really appreciate your response! How do you figure how much you’ll make per door? Silly question, but I’ve never accounted for a per unit return if that makes sense?

I am currently in Massachusetts and the prices here are incredibly high. Do you do out of state investing? I’ve been more and more interested in the Columbus/ Cleveland OH markets.

I am from CT and have been buying in Columbus, Ohio. The cash flow and appreciation has been solid

How has your experience been investing out of state and building a team to help with property management or repairs?

Is there a specific neighborhood in Columbus that you feel has done better in terms of cash flow/appreciation?

1 Vote

Quote from @Jeremy H.:

Buy box...First I narrow down the type of property, the size, the location etc.

Now we've got the type narrowed down and need to make the numbers work.

So there's really three things I'm looking at to meet my criteria - cashflow, CoC ROI and equity capture at the buy

Here lately I've been hovering the 82-85% ARV mark on my SFHs after the rehab - we're still dealing with high prices and now high rates. Makes it a little more difficult that it has previously been.

I will likely be taking a year or so break after this next one just to let everything get settled. I've done 5 properties in the last year and a half and I'm just burnt out

1 Vote

Hi all!

Just curious to see what criteria you have when analyzing a potential rental property.

Thank you,

Bianca

2 Votes

Hi All!

First time landlord here. I have a three family apartment building where I’m renting the third floor to travel nurses. I just recently had a nurse sign our lease (expected move in was June 11) and now she wants to back out of the lease because she found another place. My lease doesn’t have anywhere stating about early termination of the lease (my fault) but isn’t a lease a legally binding contract once signed? Is she able to just say she wants out and we’re supposed to allow it?

TIA!

2 Votes

Boston, Massachusetts

I have a single family (use to be primary then switched to STR) investment property and a three family that I currently owner occupy. I'm trying to leverage the equity from the investment property but running into DTI being higher than the underwriter would like. How do investors continue to pull equity from another property without their DTI being sky high?

Would creating an LLC for my investment property be beneficial in the sense of lowering my DTI?

Thank you

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All Forum Posts by: Bianca Rodrigues

Bianca Rodrigues has started 22 posts and replied 38 times.

Post: Partial Seller Financing Question

Post: Partial Seller Financing Question

Post: Partial Seller Financing Question

Post: HELOC on Investment Property

Post: Looking for local realtor in Columbus, Ohio

Post: What criteria is in your buy box

Post: What criteria is in your buy box

Post: What criteria is in your buy box

Post: Tenant signed lease but wants to back out ahead of move in

Post: How to continue purchasing rentals