All Forum Posts by: Bret Kingcade

@Joe Norman He really only threw out a number guess because I asked him to. The pics below are what is shown in the report. I honestly have no idea what the level of severity is at this point.

@Caleb Heimsoth That's a good question... I haven't had my appraisal yet. The FHA guidelines do mention the foundation has to be "safe" but it is pretty vague about it. If this is a big item like I worry, I'd probably have to ask him to make the repairs before closing. If he says no, I'd have to just walk away at that point.

@Caleb Heimsoth Thanks for the thorough reply! So am I correct in my understanding that at first I can just reach out to the seller via email or text? And then from there, we draft an official amendment if we end up reaching an agreement?

For the sellers credit limitation, it sounds like that might not work well for me if my lender follows similar guidelines... My financing is an FHA loan on a $136,000 purchase price.

I just received my inspection report today a few hours after the inspection and am within my inspection contingency time period. Unfortunately, I was surprised to learn of potentially expensive issues with the foundation shifting. My inspector threw out a ballpark guess that it could be roughly 10k to repair it. This property is not listed on the MLS so I am not working with an agent. Now my question is how do I go about formally asking the seller to make the repair? The wording of the contract says "OFFER TO RENEGOTIATE with SELLER by notifying SELLER on the Resolution of Unacceptable Conditions within the Inspection Period." This is my first property purchase so I am unsure if there is a specific type of form that is usually filled out or if this can be asked in a less formal way. Any advice on this (or foundation issues in general) would be greatly appreciated. I honestly don't know much about foundation issues other than that they typically are expensive. Thanks!

@Wayne Brooks Yes, I plan on only living there 1 year and not much longer than that. The cash flow comparison was for it being fully rented after I move out. I ran all of this by my mortgage banker already so the other part should not be an issue unless he misspoke. Thanks.

@David Hildebrandt Thank you for your reply. I got the file info from the seller and dropped off the earnest money deposit without any issues. It seems like I was just overthinking the process on this.

@Joe G. Thanks for the reply. I've done my homework on the different types of loans and have factored the mentioned items into my analyses. The gray area for me is in trying to determine whether or not the faster scalability with my current FHA loan would end up building more long term wealth than accepting the offer and going the conventional route. My gut is telling me that the correct decision would be to decline the offer since I do not intend for this to be my only property. My reasoning is that I believe I can purchase another property within the next 2-3 years that will build me more wealth than the additional cashflow over 30 years that comes from accepting his offer and delaying my second property purchase. However, with the amount of variables involved, the math isn't very simple so I wanted to check and see if other people on here think my logic checks out or not. Any input on this question would be much appreciated.

PS: As for the joint venture, I'd prefer to not factor that as an option at this time. I would hate to feel like I am taking advantage of his kindness and would like to demonstrate a proven track record of investment success before accepting an offer like that from him (even though this current offer is admittedly somewhat similar). Perhaps I am overly prideful but there is value to me in being able to say that "I did it on my own". 

This week I went under contract on a duplex that I planned to finance with an FHA loan at 3.5% down. Right after I told my family about the deal, my dad reached out to me by surprise and told me he'd be willing to lend me the money to enable me to use a conventional loan. His suggestion would mean giving me the remaining 16.5% of a 20% down payment and that I would repay him over 4-5 years with only 2% interest. This is no doubt a generous offer for him to make but the more I think about it, the more I wonder if it would actually be the right financial decision for me. Please forgive me for the novel but below are the relevant facts:

-My lender has told me that this would not cause any issues if I made a decision to change this by Monday as far as the closing process goes.

-This is my first rental property and my goal is to progressively scale as quickly as possible within reason and to hold my properties long term.

-The deal already works out acceptably as an FHA loan with 3.5% down. If I switched to a 20% down conventional loan, cashflow would increase by roughly $200/month (before taking into account repaying my dad).

-If I borrowed his 16.5% down on a $136k purchase price and I paid him back at 2% interest over 4 years, that would cost me $487/month. Over 5 years would be $393/month.

So basically my concern is that for those first 4 to 5 years, I would be redirecting all my cash flow plus some disposable income in order to repay my dad. This would noticeably slow down my ability to save up for a down payment on my next property which means there would be an opportunity cost to accepting his offer. I am relatively young at 27 and want to use my available time to my advantage. I am having a hard time making a decision on this one. I really appreciate people sticking around and reading through all this. Any input on this would be very valuable to me.

I finally put my first property under contract last night. I unexpectedly ended up finding something off the MLS so I won't have an agent to hold my hand like I originally planned. I understand how everything works WITH an agent helping me but if I'm being honest, I am kind of lost on the title company/escrow side of things now that it's all in my court. Any input on my questions below would be a huge help and greatly appreciated.

1) I agreed to put down an earnest money deposit at a specific title company. How does this process work? The seller mentioned he was going to contact them (seller is a licensed agent) but if I'm being honest, I'm not entirely sure what my role is here other than the fact that I am giving a check for a certain amount. Do I need to contact the title company before I show up to set up the account? Can I show up at any one of their branches?

2) Other than the earnest money deposit, do I need to pay the title company anything right now or do I just pay them in closing fees at the end? The contract says the seller pays for the title insurance.

3) Please let me know if you think I am overlooking anything else important here...

Thanks! Apologies for the novel.

 Yeah, and steam-type dryers have a water connection and sometimes a drain connection. I'm an engineer and learned this at work when I got the question "Why didn't you show a water line to the clothes dryer?". Lol

@Jay Helms Thanks! I really do appreciate you taking the time to respond. It is very helpful for me. I'm happy to work hard knowing that the objective is achievable and not unrealistic. I swear I will stop pestering with questions after this but would you please help answer these last 2 questions for me?

1) If I'm having to offer say 80% (made up number) of asking price on average to make the numbers work with a 3.5% down FHA loan, should I expect this to take a lot longer than usual? I know that this is hard to give a specific answer to but what I am trying to ask is whether I have a decent shot at getting an offer accepted within ~30-60 days if I am diligent at making offers regularly or if I should be anticipating a longer wait than that on average (like 3 months for example). Any input you could give from your own past experience would be great. I am just trying to figure out what a realistic timeline on average could be.

2) Can this be reasonably achieved with public listings (AKA things I can find on Realtor, Zillow, etc.) or will I need to look more for off market deals to have a better chance?