All Forum Posts by: Colby Litzenberger

Thanks @Hattie Dizmond  that makes sense.  Sounds like I should be able to extend the economic life with the proper rehab.

Hi all

I just looked at a HUD home and in the disclosure it said it is not FHA insurable due to its economic life being under 30 years. My realtor has never seen that language before but she thinks it might just be because the required repairs are more than $5k (no kitchen being the biggest issue). Has anyone seen this before and if so is it possible to get it up and have it be FHA insurable in the future? Or does that economic life tag stay with it forever?

Hey Matt - 

Welcome to the site.  Like @Zach Schwarzmiller I went to Gonzaga and now I am back in the area starting up real estate investing myself.  Bigger Pockets has been great so far.  I suggest the podcasts.  They are great.

Hi all - 

I asked about private lending a little while back (http://www.biggerpockets.com/forums/311/topics/144...).  I am back with another question.  I am getting ready to make an offer on a Fannie Mae Homepath house.  My lender is going to pay cash for the house.  

My Realtor is concerned that the cash is not in my name and that if we provide a bank statement from the lender it will raise a red flag with Fannie due to the lender's name not being on the deed.  Does anyone have any experience with this?  Does it indeed raise a red flag, and if so how do you navigate that?  

I am not sure it really would make a difference to Fannie.  I am thinking if I provide proof of funds (from the private lender) and just check the box for no financing contingency then in Fannie's eyes what difference does it make if the proof of funds comes from me, a bank or a private lender?

Oh sure good idea @Andrew S. .  Here is the link.  I was just asking how the cash flows in a privately funded deal in order to still pay "cash" for a purchase.

http://www.biggerpockets.com/forums/311/topics/144...

I met with my lender and wrote a quick post

http://www.biggerpockets.com/forums/311-buying-sel...

Thanks for all the advice and insights in this thread.  Now I have an idea of where to head when I find the property.

@Jeff Rabinowitz @Dell Schlabach @Greg F. 

I took my potential private lender and her husband out to dinner a few days ago in order to discuss my proposal and I am hear to report great success!

I had written up a little proposal about why lending to me would be beneficial to her and her husband (she is my landlord and the real estate business is kind of her thing), why lending to me is safe, as well as lay out a couple lending strategies. I put down 7% as a starting point on the straight money option and she said they liked the looks of 7%.

I got an email the next day from her saying she really liked the idea of investing in real estate without having to lay anymore tile... She said her husband has an ulterior motive. They own a couple vacant lots in the City and have wanted to develop a cottage community for retired folks. She said she is too tired of fighting with the City after her last project. However her husband really wants to pursue it, but knows he can't do it alone. He wants to see how I handle my first project and then decide whether or not he wants to bring me on board to help him with the development.

So I got my private lenders and the potential for a really cool project down the line. Needless to say I am super excited about both, and now the next step to getting my first property is complete. I have kind of been waiting to get financing lined up before really pursuing properties so I wasn't wasting anyone's time. I think I have all the pieces in place now to go find that first deal.

Hey @Shahriar K. just checking to see if you go your house?  Looks like @Kristin Whitaker gave you some sound advice. As a newbie myself I know how daunting buying a first property can be. I have found that getting a good real estate education has really helped. I just finished J Scott's books and now feel much more confident in pursuing my first deal. The fear of the unknown has to be one of the worst things a REI faces.

Anyway hopefully you got the house.  I am local here in Spokane and if you ever need any advice about anything in Spokane just let me know!

Wow that sounds rough for your "lender" @Dell Schlabach .  I hope it get resolved as best it can at this point.

Thanks @Jeff Rabinowitz and Dell for the tips on the numbers.  I'll just go chat with her and see what she is thinking.  After all she is doing me a favor just as much as I would be doing for her.  I'll let you guys know how it goes!

Thanks everyone. I think I have it figured out now. I am meeting with her on Thursday and I will suggest the route that she just wires the money to an escrow account prior to closing. Then I will put her as first mortgage on the property. I'll see what her comfort level is on the rehab money. I would have no problem having her distribute in draws as you suggest @Jeff Rabinowitz .

I have never bought any real estate before so this is all new to me.  I didn't even realize you put the mortgage holder on the insurance...  Oh well I joined Bigger Pockets to learn which I have been doing a lot of lately.

When we were talking a few weeks ago I was mentioning to my private lender that I was thinking about finding some hard money to use for a flip.  She said that is an option but it is expensive money and told me to avoid it if possible.  At that point I asked her if she would be interested in investing with me, and she said to work something up.  I am struggling with what is an acceptable offer.  I obviously want the cheapest money I can get, but I don't want to offend her.  I am thinking 7-8% annually interest only payments.  Is that laughable or am I on the right track?

@Dell Schlabach sounds like you have a story up there??