All Forum Posts by: William Donaldson

Welcome to BP, @Brian Gilstrap !  Good to see a fellow Clemson alum here!

The Upstate is a great buy and hold market - I have two rentals there.  Greenville, in my opinion, is the best county to flip a home in the Upstate as well.  With your experience and connections, I'm sure you can be successful!

I've relocated to Charlotte but I come back often for Clemson games.  Let me know if you ever want to meet for coffee! 

I don't believe James intended for the thread to become a repository for all of the hypothetical scenarios (as well as actual experiences) that warrant an offer that is ~25% of list price.

Obviously there are properties where a "low-ball" offer is warranted.  Obviously there are realtors willing to submit lowball offers for investors who actually close a decent amount of deals and therefore make the realtor money.  Obviously there is nothing inherently wrong with a lowball offer.

Correct me if I'm wrong, but the thread was intended to serve as a warning to new investors who think it is okay to use the time and services of a realtor to submit lowball offers WITHOUT informing the realtor of their intentions.  Many realtors would decline to show properties to a new investor who only intends to lowball.  And for the devil's advocates: obviously it would be okay for the new investor to submit a lowball offer through the realtor if the investor had the intent and means to be a legitimate buyer (i.e. not throw out lowball offers to see what sticks) and the property warranted a lowball offer.

I bought a condo when I was in college (I graduated a few weeks ago so still getting used to the past tense) and lived in it and rented out the other 3 bedrooms to friends. You're right in that you can usually get more in rent by renting out each bedroom.

It seems like you'd prefer to start investing but not tie up too much money. Why not do an FHA loan by living in one bedroom and renting out the other two to friends? You're going to have to live somewhere. Run the numbers and see if it makes more sense to rent an apartment and buy this place, or buy and live in one of the bedrooms.

Also, it sounds like the property is listed at FMV. Why not take advantage of being an OO buyer and try to get a good deal on a HUD or FNMA property? I did that for my first property and saved good $$ by not having to bid against investors.

The best advice I can give is to not rush into a deal. If you have any questions, feel free to reach out. Good luck!

Shay,

If you can post a breakdown of the numbers, members will be able to give feedback. We'd need to know the ARV, rent per side, expenses (tax, insurance, maintenance/reserves, property management, utilities, etc), and loan information if possible (% down, monthly payment). Including qualitative information would be great too: What kind of area is it in? What quality of tenant would it attract? Is this a place you would like to live, or would you be buying mainly to get your foot in the door?

From just what you've said so far, it sounds like too many people have their hand in the cookie jar. It sounds like a fantastic deal for the broker/agent, but I'm not sure it would be a good deal for you after it's all said and done. Why isn't the agent doing a good job helping you find a property that fits your needs? Hopefully it's not because they're more focused on making a big profit on a flip as opposed to a 2-3% commission.

Justin,

Before you make an offer, make sure you have financing lined up. It can be difficult to both get a loan for a NOO condo and a property under $50k. Be sure to check out the HOA financials. Don't just make sure they are solvent, see if they are building capital reserves. You don't want a special assessment for new siding or roof soon after you purchase.

Matt's calculations are incorrect because he's using the $450/mo as the debt service, when it actually includes HOA & insurance. If you can break out these numbers individually, we could better analyze the investment. Find an insurer who is familiar with the complex, because their familiarity with the HOA's insurance could save you big money on your premium.

Let me know if I can be of any help.

@Mike M. - looks like I was saved some trouble by the loan officer herself, because she didn't know > 50% of units have to be OO in order for FNMA to purchase the loan. She was completely confident over the phone we could get it done.

@Jesse Gonzalez Thanks for your input. I agree that the rates are high. TD doesn't have any options for a condo that is in a complex where 50%+ of units are investor owned (this is in a complex close to campus). Looks like I'll have to go with a smaller bank, and I'm afraid that they won't have anything too competitive either. And I ran the numbers while I was on the phone with the loan officer, and it was very apparent that "buying points" is not a good deal for the borrower.

@Matt Devincenzo Did you have to use a small local bank? I believe that is what I am going to have to use for an investment property I'm looking at that is sub-50k (as well as the condo since 50%+ units are NOO).

I'm looking to refinance an owner-occupied condo I bought in February '13 in order to pull out some cash for other investments. I've never refinanced a property before, and wanted to get members' input on the process and if the numbers I am getting seem reasonable.

I've mainly been working with TD Bank. I've been really satisfied with their customer service, and my grandparents had a good experience when taking out a HELOC on their primary residence. I will continue to occupy the condo, and TD recently gave me the following numbers based on my estimated credit score of 700 and 80% LTV. The property value is around $90k.

-Closing costs $1,274; 5.625% 30-year fixed

-Closing costs $2,700; 5.125% 30-year fixed

Obviously which loan I go with depends on the length of time I plan to own the property; I save about $265/year by going with the 5.125% loan with higher closing costs. Unfortunately for me, I have no idea how long I want to keep the property!

What do you think of the numbers I posted - do they seem reasonable? What tips can you provide about refinancing a property? What has your experience been like with TD Bank?

Thanks in advance! Hope everyone has a great day, and I hope there are others out there who can learn from this thread as well!

@Bill Sargeson , do you mind sharing the name of the bank? I will be relocating to NC soon and would love to see if they make loans in the area I will be living in. Thanks!

In the summer I will be relocating Charlotte, NC to begin my first full-time position after college. I lived there over the past summer while I was interning, and I know renting can get a bit pricey, especially within a decent distance of where I will be working (Uptown). I love making money and dislike spending money, so I'm entertaining an idea that may or may not be viable, but I wanted to get opinions/advice before proceeding any further.

Because I do not have a family or many personal possessions, I thought it could be a win-win if I lived in a property that is being rehabbed by an investor.

The pros and cons for me as a young professional interested in investing are pretty obvious: I live (potentially) rent-free, enabling me to save more money to invest. I also have the opportunity to watch a rehab in progress. But the situation could get uncomfortable - bathrooms in constant state of remodel, kitchen countertops not installed for weeks, etc.

The pros that I see for an investor is that they have someone living in their flip, dramatically reducing the risk of theft, vandalism, or some overnight catastrophe (e.g. leak damaging flooring, etc.). They also have someone they can call at any time to get a progress update with pictures/video instead of having to visit the property themselves. I also wouldn't mind helping out with any projects that they wish to perform themselves. There aren't too many cons that I could see. I'd keep the place clean, because I'm a clean person in general, but also because it'd be the right thing to do in the situation. We'd have to arrange something for move-out, since they may want the place unoccupied once it is finished. But that's not a big deal, because it would only take me an afternoon to pack up and move to the next place!

So, BP, what do you think? If you think it's a good idea, how would you recommend I find investors in the area to see if they would be interested in the arrangement? Thanks in advance for any input!

I performed the initial and recurring services for many foreclosures in my area several years ago. If you're actually going to purchase a foreclosure without seeing the interior (something I would not recommend), I would budget at minimum for new paint throughout the house, new carpet, and new appliances. I hope you would not make an offer that doesn't contain an inspection contingency, because a house can look great on the outside but be torn to pieces on the inside or underneath (eg. missing plumbing).

If you find a foreclosure that is vacant, then the property is being maintained by an REO vendor. You could leave a note at the front door that included who you are, that you're interested in purchasing the property, and to please give you a call the next time they will at the property so that you can meet the vendor at the property to get an idea of the repairs needed. And many times the vendor has a better idea of the repairs needed on the property, because they're the ones who are liable if they miss something in their initial property condition report.

Also, almost all Fannie Mae foreclosures have the same key combination, so once you come across a "master key," you can get into almost any of their foreclosures.