All Forum Posts by: Keith N.

HI All,

I just closed on my first deal about 4 days ago and I thought I would share the info with you and ask for your input on the deal.  The house I bought is a Duplex in Raleigh which I will be owner occupying in one side (with a roommate) and renting out the other side.

The Duplex is on a street with 14 SFH and 3 other Duplexes. It is part of an older neighborhood with about 250 SFH's and probably 5-10% duplexes. I would classify this area as a "B" area. Most neighbors are either people in there 50's and 60's or younger people with small kids. Low crime area.

Purchase/Repair Costs

Price $180,000

DP: $6,500

Inspection & Appraisal: $1300

Closing Costs: $500 (credit from lender)

Repair costs and Labor: $3,500

I Recieved a - $2000.00 credit from the seller for repair costs upon closing

.... So technically it cost me ~ $6000.00 - $6500.00 total to get into the house when the repair costs are factored in.

Mortgate Details

FHA with 3.5% down, 30 year mortgage

Total monthly payment (everything included): $1143.00

Home Info

1,110 sq/ft per side, 2,220 sq/ft total

Each side is a two story unit

Medium sized kitchen (All normal appliances will be included or installed)

2 upstairs bedrooms each side

1 full bath, 1 half bath each side

Covered concrete patio each side

storage shed

Seperate Driveways on each side of Duplex

Rent

Projected rent is $900 per side (I will have to pay for water, this will be included).

Rental side: $900

Roommate: $425

Total (While I live in one side): $1325.00

Total (When I move out): $1800.00

Cash Flow (Before maintenance/Vacancy): $1800.00 - $1143 = $657.00/month

I spent all weekend painting and arranging "contractors" to do all the work I don't want to do.  The numbers I was quoted at were right on the money as to what my projections were at, so the numbers we are looking at above should be pretty damn close.  I might end up spending $1000 - $1500 extra on unforseen up front maintenance, but there is no way the repairs will cost me more than $5000.00 total in a worst case scenario.

I realize that I probably paid over market value for this Duplex, but for my exact situation this was by far the best deal I had come across.  It is EXTREMELY difficult to find a Duplex in Raleigh that is not in a sketchy area and not completely falling apart.

Please let me know what you think of my first purchase!

- Keith

@Matt Moger Congrats man!  Looks like you know how to network and you made this deal work for you in a very tight time frame.

I'm almost certain no homes can be bought for this cheap in the Raleigh area or even in the worst parts of Durham.  I've heard from others on BP that Greensboro and Winston tend to offer better rental properties (by the numbers) than Raleigh.

I am curious as to how many super-cheap properties like this you are able to come across in the Winston-Salem area?

Hi All,

I was wondering if any other buy & hold investors have used a professional photographer to take pictures of the exterior/interior of their properties to be used for listings online.  A lot of the listings I see online only contain a few pictures and were clearly taken using a camera-phone.  I would imagine that getting a professional photographer to come in, take a large number of quality photo's, and utilize lighting techniques would pay dividends in regard to increasing interest in properties and the price it ends up being rented for.

Does anyone have opinions on using a professional as opposed to taking pictures yourself?  If this is a good idea, could you point me in the direction of someone in Raleigh who does a good job with this?  

Thanks.

@Mark Stevenson

Welcome to BP! I wish you luck in beefing up your portfolio.

@Sheryl Merritt 

I'm not sure, however I'd imagine most Lenders offering FHA loans would be able to also provide a 203K loan if it could be justified. I'm leaving a post here because I'd like to hear what type of answers people come up with.

Will be there!

@Dawn Brenengen haha woops.  yeah, that's what I meant!

@Dawn Brenengen Federal Coastal Credit Union. not a dumb question

Hey @Dawn Brenengen,

Yes, since this post I've talked to both FCCU, SECU, and Summit and they can all finance unwarrantable condo's. They just ask for a boatload of info about the HOA. I decided to move on and look at other properties, however during this process I figured out that Credit Unions have the most attractive loan terms I've seen.

FYI, FCCU and Summit offer 30 year fixed loans at ~ 3.75%, and the PMI they charge is much less than a regular mortgage lender. SECU has good rates, bot no 30 year fixed option. I will probably use FCCU when I do purchase something.

If you know the names of people at either FCCU or Summit that could help me though, it would be extremely helpful. While these credit unions have the best rates, the people I've been in contact with have been slow to respond and lacking detailed knowledge.

Hi All,

I've been looking to make my first purchase for a few months now.  I finally found a seller who is willing to give me an excellent deal on an off-market condo.  I would be purchasing this condo for about 65K, which is about 10K below market value.

The seller and I are ready to move forward, however I cannot get a conventional mortgage due to this condo being unwarrantable. It is not unwarrantable due to a dysfunctional HOA or any red flags within the community. the only reason it is unwarrantable is because of the fact that due to the recent Fair Housing Act Laws, 51% of the community is supposed to be owner occupant. Because it is only about 5% owner occupant, ZERO conventional lenders will give me a conventional owner-occupant loan for the property. Seems like the most counter-intuitive rule ever IMO.

Anyways,  I've been doing my research.  I contacted a bank that offers commercial loan products.  I can't even get a loan from them because they expect 20%-25% down which would clean out my savings.  Furthermore, even if I had enough cash to get this type of loan, I wouldn't even be allowed to live there, as this would be a "commercial loan" for investment properties only!

Finally, I contacted the NC State Employee's credit Union to inquire about if they do financing for "unwarrantable" properties.  I had to call twice, as I got two people on the phone line who couldn't even comprehend what I was explaining to them (Yeah, my situation is kind of complex, but come on).  Eventually i got the answer that no, they will not finance any unwarrantable properties... I'm not sure if I believe this person or not as they appeared to have no clue how to initially answer my question.

Anyways, I'm in dire need of Ideas of how I could get low down payment owner occupant financing on this unwarrantable property.  I've ran the numbers and it's a good deal, the seller is more than willing to work with me, and I'm excited to purchase my first home.  Are there any lenders that can help me?

FYI, this property is in Raleigh NC