All Forum Posts by: Chana O'Leary

@Nathan G. Yes - I've dealt with Deragon's Property Management - but they are in Massena. The house is about an hour away. Regardless, they do not keep appointments or show up when requested - so, I don't consider them too much of an option.

@Dennis M Great question. But, I know how realtors operate up here. They are not exactly "go-getters". Their idea of "marketing" is to put it on the MLS and wait for someone to call. If no one calls after six months or a year, they drop the price. Homes aren't staged, they don't want the "trouble of an open house" and they don't insist on pre-approvals or qualification. They don't even want to hire a photographer for professional photos and insist on taking pictures with their iPhones and posting them on the MLS. Forget getting them to show a home on the weekend - one realtor actually told me: "Real estate agents dare you to do business with them on weekends."

So - if I'm going to sell it - it won't be with a realtor up  here.

However, I appreciated your replies - and will definitely take your suggestions on-board.

Thanks so much,

Chana

I have a 2400 sf home on a 1.5 acre corner lot that has been a gut-renovation -  from new insulation, electric, to all new sheetrock, paint, flooring, all new kitchen and new bathrooms.It is zoned commercially and residential, has an attached 800 sf garage. It is priced competitively, but I do not owe a mortgage on the house, so, can be somewhat flexible. I am asking $130,000 - $10,000 option and a monthly payment of $1033.00. 

The area is somewhat rural, "ok" schools, and most homes are not extravagant in this part of the world. A home that costs $200,000 is a "rich person's house".

I have been advertising for several weeks now on a lease-option or land contract - but with no success. No calls, no responses to Craiglist ads. The one family that looked from Craigslist (it is on Zillow as well)really wanted the house had this profile:

Three adults, three children under six years old. Only one adult was working, making a decent salary, but supporting 6 people.
Three adults had credit scores in the 420-490 range, even the working adult.
Multiple items in collections and multiple credit inquiries.
No ability to put any money into an option (they offered to pay over a three year period out of their tax returns). And they asked for a $200 drop in monthly payment.
One adult fighting second DWI.

They really wanted this house - but I turned them down based on the above issues.

I think that finding decent tenants is going to be an issue. This is a poor part of the country (northern New York), and the local economy is prison-based. That said, how can I structure my requirements so that I have some basic protection. One thing I will ask is that they carry an insurance policy to cover damages to the house and make myself the beneficiary...in the event that they move out with the house trashed. There are no property management companies to turn to up here.

I have been told over and over not to rent my homes out up here...that the tenants are terrible. Typically, most landlords don't even both screening their tenants...they just accept their money, tenants move-in and then out again within six months.

So, not ideal - but that is the situation on the ground.

How do I protect my investment as best as I can, given the tenants I am likely to have to work with?

Thanks in advance..

Just curious as to what you mean by "total gut". My flip was taken down to the studs and then re-built with insulation, new electric, plumbing, drywall etc. Was that the case with your home as well? If so, you did phenomenally well to keep costs under $45,000!

@Joseph Scrocca Unfortunately, my home would not qualify for FHA. It is off-the-grid and uses solar power exclusively. Also, my septic tank is too close for FHA requirements - and the well is probably too close given their requirements, as well. I did talk to a bank about pulling some out - unfortunately, I've only owned it six years and the market up here does not appreciate rapidly. So, there's really nothing to pull out at this point - especially given the kind of house it is. (I love it - but bankers don't "get" 100% solar at this point.

As to the flip house - I would rather sell it on a land-contract than rent it out up here. This is a prison community -  it's just not someplace you want to be a landlord if you can help it. Also, the house is so large (2400 sf)  that I'd have 15 people living in there within a month. 

@Anthony Dooley "High-end finishes" - only if you consider drywall a "high-end finish". lol... :-)  It just needed a lot of work. All new insulation, electrical, plumbing, drywall, new water heater, pump, burner, etc. etc. etc. It's a great house - but I haven't even GOTTEN to the "finishes" yet. I am really sensitive to the economic environment up here and being careful not to over build. No granite countertops, for instance - they will be nice IKEA counters. No rain showers - basic fixtures only. As I said, it might be best just to get it on the market as a land-contract (people up here are ALWAYS looking for those)...and move on!

Sadly, it won't help my credit since there is no mortgage on it - and it doesn't even appear on my credit report.

Thanks for all the good thoughts and ideas! They are deeply appreciated!

@Christopher Malone I went and checked out GroundFloor - but unfortunately,they aren't in NY yet. Still, they looked interesting from an investment standpoint - as well as a borrower. I'm going to explore their business model a little further. Thanks for the pointer. I appreciate it!

@J Scott Now that the issue has come up - I have to admit - I really never thought about it! But now that I AM thinking about it - it makes perfect sense to think of $500,000 as "mid-six-figures".  Unfortunately, that is NOT my present situation! :-)

@Manolo D."Six figures" typically means a paycheck over $100,000 a year. I don't think there would be any issue at all if I were grossing 500K a year! :-) (At least, I would HOPE not!) 

Thanks for responding.

@Charlie DiLisio Hi Charlie, thanks for your reply. In response to your questions, no, I don't have a 401K or credit union membership. And your surprise echoes mine. I had thought with the deed as collateral, my good income and low DTI ratio and the fact that I have put $75,000 of cash into the property - that it would not be an insurmountable problem.

But, as I have learned - not all hard money lenders loan in every state and they have credit requirements posted on their websites. Even the ones who loan in NY state focus on the City - not the small northern towns. Local banks won't talk to me about a mortgage (they would consider this is a new mortgage) with a low FICO score. I have approached two mortgage brokers - one local and another in Maryland who loans in NY. Again, nothing for my FICO score (for them I need 640). It doesn't qualify for FHA because it is still not considered habitable. (No floors or kitchen/bathroom furnishings.) There are no REI or even real estate meetups in this part of the world for networking. So, the options are somewhat thin up here.

If push comes to shove, I will just have to take the six months to complete it piece-meal. And try to get it on the market in the Spring. 

Thanks to all who've responded - these are all good thoughts and great advice.

The only timeline for completion is that the house is just sitting there and I'm paying taxes on it and will be paying to keep it heated this winter. I had been thinking about moving into it for 18 months (avoiding capital gains) - and selling my other home, anyway - while I finished up landscaping and such.

The market where I live is schizophrenic (prices are all over the map) - and I'm not impressed with the small pool of realtors that work in up here (northern (like two minutes from Canada) New York) . Not a very creative or professional bunch from what I've seen so far. The wildly differing numbers weren't a surprise at all...

Getting it to the point where I can live in it will still take at least $15,000. But, doing it paycheck to paycheck may be the only option. Still - not a bad one overall. 

The credit score is moving in the right direction - glacially. But, at least it's in the right direction. I just got a notice today that Equifax moved up 6 whole points! Yay? Well, like I said - it's in the right direction. As to the hard money lender thinking the deal was "bad" - it never got to those kind of specifics - they have an FAQ on their website - "no scores under 640". Period, So, they weren't making a judgment about the viability of my particular deal.

As to the "break-even/lose" issue - well, I've learned so much while working on this house. The education alone has been so valuable and, honestly, I can't put a price on that. If I just break even - I'm "OK" with that. If I can recoup all of my original investment - and I'm pretty confident I can do that at least - then I'll feel "OK" about the deal. Lessons learned and move on... :-)

(With a higher credit score, natch. .. :-)

Thanks again...

Hi all,

I bought a foreclosure for cash ($28,000) and have put $50,000.00 cash into it. The heavy, big work has been done and now it's the final touches. Flooring, and kitchen/bath furniture - and I'm done! Two brokers have given me listing estimates of $100,000 - $130,000. 

I would like to pull some money out to complete the work - about $15,000-$20,000. I owe nothing on the house and I thought this would be straightforward. But, apparently, it's not. 

My local bank tells me I have to qualify for a brand-new mortgage in order to take any money out of the house. But, even though I own another home besides this one, make a mid-six figure income and have excellent job security (cybersecurity), and a DTI ratio of 13% - I can't qualify because my FICO score (612) is too low. (Nasty divorce last year - husband didn't pay my bills while I was out of the country several months - although I sent him the money. I only discovered this recently - but, I am cleaning up my credit. Paying off the things that I don't even "need" to - because it's the right thing to do... But it will take years to get it up where they want it 670 or higher.) In the meantime, my house sits 90% complete. Should I sell it unfinished - and take the significant hit - after all the months of work or ---- ?

I approached a hard money lender - but again - my score is too low. So, even though I own this home free and clear - and need very little to get it on the market and repay the loan - I seem to be out of luck. I am writing this here to ask if anyone has run up against this - and if they have any resources or suggestions for someone in this situation.

Any and all suggestions will be gratefully considered!

Thanks in advance - !