All Forum Posts by: Bryan O.

I would avoid them. It's like dating your ex's sister. Well, now that I think about it, I'd probably date my ex's sister.  ;)

I digress. "You are the average of the 5 people you spend the most time with"-Jim Rohn. They might be great, but there's at least a 20% chance that they are not.

Someone else had a similar question before. Here is the lease I use in Colorado. Hope it helps.

She can pull her own FICO score for $20 and get her credit report from annualcreditreport.com for free. This will let her know where she is and you can simply ask the lenders what their requirements are. They may be able to just use your information for pre-approval.

The lender that I had in February did a hard pull for pre-approval and at loan time :(  I'll have to ask before next time because my credit has suffered a bit from shopping around... 2 lenders = 3 hard pulls :(

How "dinged" is her credit? How much cash does the landlord need? The entire amount? If her credit is repairable, maybe she can get a hard money loan temporarily (6-9 months) while her credit recovers, then refinance the loan into conventional? Without the seller wanting to carry anything it may be a little tricky. Did she actually ask or just "thinks" that he wants it in a lump sum? The landlord may save a bunch on taxes if it is a smaller lump sum this year and another lump next year.

Best of luck to your friend!

@Mark F. is right. You need to be "gifted" the money. They will scrutinize it to make sure it's a legit gift.

I would jump into a 4-plex with your VA loan. $0 down means INFINITE ROI! You would live in 1 unit for the first year and rent the others: instant landlord experience without as much hassle. That leaves the rest of your money available for additional investing.

One strategy I have heard that I liked when both partners contribute funds and one of them manage is to divide equity by the dollar amounts contributed ($25k/$25k = 50%/50%) and the one doing the managing charges typical management rates (7-10% of gross rent). That keeps the duties clear and the money split in a way that makes sense.

If you go the route of dual-management, be VERY CLEAR about the responsibilities both of you have. Know who "owns" decisions about which area. Maybe you are better with tenants and administrative, or know more about contractors and maintenance. Write it down so you know which person is the "boss" of what areas.

Again, leverage the heck-fire out of your government service (thank you, by the way) to kick-start your investing.

As a person who has no "skin in the game" it is not really your place to go firing up others. If you can't make a deal happen, then maybe mention to the owner that they could offer a lease option to their tenant. I would concentrate on providing professional quality advice and solutions rather than just spreading bad news. Many owners don't know that there are creative solutions to problems; you can use this as an opportunity to help someone in a deal that didn't work for you.

Example: My brother just moved to another state after a period of unemployment. He wasn't qualified for a loan because he just started working again but didn't want to get a rental then move in 6-12 months when he could qualify. He found a great house at a good price but was turned down by the bank. He was crushed and the seller wasn't happy. I told him to ask if the owners would consider a lease option while he builds the 6 month employment history he needs. He had no idea what that was but I explained it and he liked the idea. The owner agent balked at it and but eventually made the offer to his client. They loved the idea. Lots of winning to go around :)

Another great tip is to only show the property when it is CLEAN! We had some dirty tenants moving out and wanted to show the place early. All the "higher quality" ones were turned off and couldn't see through the mess. The ones that remained interested were not the level I want in my unit.

Setting high expectations from the beginning (by showing it in a good state) will push them into that mold. Then you just need to keep them there.

How is living in a home considered income? If you are on the loan, that's an expense. Are you actually buying a multi-unit?

I had a conversation today that piqued my curiosity regarding being a credit partner. Here is an example deal:

A full time investor acquires a residential property (4 units) and fixes with private money. They want to refinance this into a traditional loan but. Non-traditional funding is at around 6% interest. Traditional is 3.75%. They would like a credit partner to open the traditional finance door.

Is this a fairly common scenario? What are some strategies you have seen used to bring on the credit partner? 50% of the payment difference? 10% equity? 1% equity? I've not done deals like this and do not know anyone who has to provide thoughts on what it is worth.