All Forum Posts by: Scott E.

I can't believe I'm suggesting this because I generally don't believe in this strategy... but it seems like a scenario where you can buy him out of the situation with a "subject-to" structure

You establish a new company, that company buys this property off of the existing partnership subject-to this mortgage. And you pay him the $39k out of pocket.

There might be holes in my suggestion. I've never done a subject-to deal. Hopefully somebody else will chime in and give you more detail on how this could work.

LOL. "South Scottsdale is pretty rough." 

I'm currently building a $2.3M spec in South Scottsdale. Many of my peers are building similar specs. And we've been selling them in these higher price points since 2017. Well equipped short term rentals bring in $200k-$300k per year over here.

South Scottsdale is where it's at. You haven't been able to buy a single family house in 85251 for $400k for years. You wont even find a single family at that price in 85257 anymore.

Had to pipe in to stop the misinformation. End of rant :)

I wonder why this is the case... makes me think one of us needs to start a PM company that specializes in managing 10-50 units. Hmm....

Very interesting. I used to process short sales for a big bank back in ~2011 and I've never heard of this before. 2011 was a long time ago though :)

My guess on what's happening is that the bank has an approved price they are willing to settle on. In this case its $615k. They probably can make no exceptions to that price as I'm sure they are already losing money on the deal selling it to you for $615k. The buyers I suppose would be permitted to pay the $18k but if they had $18k they probably wouldn't be in this situation to begin with.

If I were in your shoes I'd have my agent get in touch with the sellers agent to find out who this short sale specialist is. Then try to get in touch with that company and see if you can negotiate their fee down a few percentage points in order to get the deal done.

Left my W2 in 2021 to focus full time on my real estate investments. A few comments...

1. I was a real estate investor/developer on the side for 11 years before I left my W2. That time was spent gaining a ton of experience buying, renovating, and selling properties. It was also spent building connections with contractors, lenders, architects, agents, title companies, stagers, etc. Plus along the way I was saving money like crazy to make sure I have a good emergency fund for when I finally decided to leave my corporate job.

2. If you are feeling stressed over deadlines, dealing with people/coworkers, and waking up every morning anxious and tired, then I have bad news for you. These feelings will be exaggerated 10x when you work for yourself and are dealing with contracts, contractors, and tenants. Sadly I'm not joking. I recommend you find ways to deal with that stress and anxiety before leaving your W2.

3. You will not be able to flip houses and build rental income all while traveling and living freely anytime soon. If you do everything right and work your butt off, you might be able to achieve this goal of traveling and living off of rental income within 10-15 years. Don't expect it any time soon.

All that being said, leaving my W2 was totally the most exciting and rewarding thing I've ever done (in my work life anyway). My reply here might come off a bit harsh but just trying to set realistic expectations. It's a great feeling to work for yourself and not have to report to anybody... but it's also not as glamorous as they make it sound on the internet.

I was a mortgage banker. Bought and sold real estate on the side for 12 years until I left corporate America to commit to my real estate business full time in 2021.

Sure... what I meant was lets say you find a $200,000 property.

You get a $150,000 1st mortgage (with an interest rate around 8%)

Then you use your $50,000 HELOC (which also will have an interest rate around 8%)

Meaning you've funded 100% of the purchase with high interest rate debt. Even though the HELOC would not be on the subject property, it's still debt on the deal.

What an incredible story. Thanks for sharing all of that detail. Exciting and inspirational. Congrats on your success.

You've come to BP because I'm guessing you want to park some of that money in real estate, which I think is a good plan. The only downside is you are not going to turn $700k into $3mm in 5 years by investing in real estate (unless you do a TON of value add, and have a little bit of luck)

If I were in your shoes I'd probably put that $1mm to work in a small value add multifamily deal to get your feet wet, then I'd use the remaining cash to repeat the process that you just went though.

Your dad has passed on some very valuable wisdom to you. If your heart is in it, it's a good plan to stay in the gas station business.

Doesn't sound right to me. I'd challenge the realtor and ask them to involve their broker on this one.

Out here in AZ we (sellers) need to complete a seller disclosure form (called SPDS) which requires us to answer around 100 questions about the property before we sell. I'd imagine a similar process is followed in Norwalk.

Off memory, nothing on those disclosures has anything to do with the habits of your neighbors. 

You've come to the right place to get a question like this answered!

My thoughts are this - There is nothing wrong with your logic. Using your HELOC to buy an investment property and saving your cash reserves to get you through your non-working season is a fine plan. You will have 2 challenges though...

1. Getting a HELOC on a rental property is tough. Not too many lenders who offer this (I believe there are some though, hopefully others will weigh in with suggestions)

2. What you are proposing to do if you use the HELOC for your down payment is you are going to be buying a property with 100% financing. Technically the leverage for your 2nd mortgage will come from your other rental, but the payment still needs to be made. It's going to be really hard finding a deal that cash flows when using 100% financing.

Circumstances should get better as rates tick down next year. Best of luck.