All Forum Posts by: Christopher Phillips

You can't quit claim the house into the LLC, it will trigger the due on sale clause, especially if they told you already not to do it. This is a common issue with LLCs. If you didn't pay cash and you only have one property it's not worth the headache of an LLC. The bank wants to sell it on the open market. If you move it to an LLC it then belongs to a commercial entity and Fannie Mae doesn't allow that. So they'll force a due on sale clause and you'll have to scramble to get a commercial loan.

Just tell them you are calling about the house for sale and when can you stop by to see it. You'll get most of your info when you stop in. If the owner is also an investor, they'll have the answers for you when you get there. If they are not an investor, well, don't expect too much.

MJ Bonanno is correct about FHA vs conventional loans. If you occupy one of the units then the lower downpayment options will be available. If you don't occupy it the lender will require more downpayment since it will be considered an investment... Rent margins will depend on the local ratio of renters to owners and general house values. In an area where there are more owners than renters, your rents probably won't be high enough to cover the mortgage, so that is more of an appreciation strategy since values will continue to rise. In an area where most people rent and values are low, your rent income will most likely cover the mortgage with high margins. Values will also be very low with little to no appreciation, so it is about cash flow. Renter turnover can be high. Evictions, property condition, and other issues are a higher risk. But when income is coming in the profits will be good. There is also the middle ground between the two with positive margins, but you don't enjoy much appreciation, so you have to control expenses.

Best of luck with the inspection. Hopefully there won't be any surprises.

If the bank has the mortgage they will continue to pay the property taxes even though the account is delinquent. The bank won't talk to you. It's not in there interest to deal with the general public.

At some point, after being delinquent long enough, the bank will proceed to either foreclose on the property if there is a mortgage, or the trustee will auction it off if it is a trust deed.

If the owner is elderly and did a reverse mortgage, she might be making payments from the proceeds. If that's the case, you're just going to have to wait it out until you get in touch with the owner.

@Evan Cotten What you're asking does make sense. Any good agent is more than happy to sit down and have lunch or coffee to talk about the business and how they can help get you going. The agent will also be a great resource for putting you in contact with vendors/contractors/lenders.

Yes, there are subtleties for each market. So, you want to build your network of people you can trust to give you straight answers.

Another good way would be to join a local REIA, or at least attend a meeting or two. Another would be to attend local real estate investment club meetings. Many are on Meetup.com. You can casually attend for a meeting or two and meet others from the same area that you plan to invest in.

To add to others... Books can't cover local differences. Join a local REIA or join some local Meetup.com investor meetings to discuss and learn and network with local folks.

Your first step should be to determine if buyers are actively purchasing properties in the zone, or are they shying away. Being from Long Island, our southern shore areas do require flood insurance. Some homes with moderate risk are selling with insurance going for $2,500 to $3,000 per year. The harder hit areas aren't moving much.

The deal might look like a deal on paper, but you have to be able to sell it down the road.

Don't do balance transfers.

If you're applying for a home loan, you have to show you have the ability to pay for the down payment and the closing costs.

The funds will need to be in there long enough for you to do a certified check.

The bank will check your account balances and will question the sudden access to funds. Even though your utilization will be low, using credit cards (ignoring paying for the inspection and the appraisal) to buy a house is a bad sign and can risk having your mortgage rejected.

If you are ultimately trying to go the 20% down route, talk to you lender about other solutions so you can do the closing costs the right way. One option would be lender credit to help with the closing costs. You could have asked for seller help with closing costs, but you already signed the contract. Another option would be to add some of the closing costs to the loan so that you can use your cash/401K for the 20% down payment and avoid PMI.

What happened? Forfeiture is normally when a govt. body seizes assets when a business is doing something illegal. Like taking your yacht or car.