All Forum Posts by: Carmen Almonte

Why don't you do the condo conversion right away while you are living there?
The condo conversion will be essentially done before I move in. In other words, everything will be separately metered, stainless steel, granite, bamboo floors, and recessed lighting will be in place when I move in. However, I can not sell for at least a year as I am using FHA money to make this happen. I will be an owner occupant. Thanks, Tom.

And yes, Jason, I am cutting it way too close. I know that there is a difference of opinion about using money from profitable holdings to carry another not so great initial deal. This is Your humble opinion is and was welcomed.

Hi Jon,

Yes, I am/was willing to do this because of the location and the potential for condo conversion, as you say a ‘marginal speculation’ play. I calculate that my mortgage will be at 5160 and the property taxes are at 500. I may be off, but the insurance may be around 340. I am not counting maintenance so I am at a total of 6000. The units including the one that I would be in could potentially rent between 6000 or a little more. I could also refi after rehab for a better rate. I manage my few properties myself. I am not seeing where I would need 10K or 8,800 though. I see a near break even, excluding maintenance. You are right that I should not be banking on a good experience for maintenance. Honestly, this is one of the best deals I can find. In major markets that I focus on, this is a pretty good one. I am seeing multiple offers on some of the ones that I have looked at. My last 4 offers using all the lovely formulas were soundly rejected. The formulas I am referring to are pay 70% after repair value. In markets like Manhattan and Brooklyn for example, this does not work nor does it work in any of the (non-declining) major cities I canvas.

Thanks for your reply…as I am getting more firm in my decision to walk away. All they had to do was pay all the closing, and this would have been a done deal!

Thanks, Dustin, for your reply.

1) I did realize that, but this property is analogous to finding a solid brownstone in Brooklyn near Starbucks and the subway.
2) Actually, the listing agent for the property stated tonight that the bank has multiple offers.
3)The ARV was derived 2 months ago. I calculated PITI. I would roll the rehab time/vacancy period of into the loan. I don’t anticipate any real vacancy time due to its location. The only thing I did not figure in was maintenance. I know pretty naïve, but my last REO seems not to have any real maintenance costs due to good tenants.

Your insight is really appreciated. A property like this, at this price point, and in this condition does not come along often. I could live with the break even, if the bank would pay all closing. Then, I would have money to keep buying after closing. They are being so difficult. I was wondering if I should just walk or counter again. You are giving me the courage to walk. But I am sure that everyone has experienced ‘the deal that got away syndrome’. (Dreaming of the condo conversion and what I could potentially make…in two years!:)

I have put an offer in for a multiunit at 88K under asking price of 600K. This includes me asking the bank to pay all closing at 6%. Bank said "no" holding firm to the sales price. I gave in to everything they asked, which included removing all contingencies except financing and agreeing to pay the full sales price of 600K. They said they were willing to pay transfer taxes (very small amount). The only thing I held firm to was I want the bank to pay all closing. The ARV is 750-800K. This place needs about 200K, which would be a high end rehab in this hot area. I am doing a 203(k) as I will live it for at least a year. Well, the bank just countered that they will pay 18K toward my closing and that they have multiple offers. The closing costs total around 31K on the prelim HUD1. So now, I feel like I may be being played...paying full asking. Also, I should add if I condo convert in a couple of years, I will more than make the money back. Heck, I would make a profit if I did it today albeit small. By renting it now, I may be short 400.00 a month or just break even. I can use money from a profitable rental that I have to cover the shortage. Any advice? The bank is waiting. And no, I am not a really experienced investor. This is my 2nd REO. Thanks!