All Forum Posts by: Daniel Kramer

@Chad U.

I totally 110% understand why a lender would not want to for all those reasons, but I just wasn't sure if a lender is legally obliged to honor that attempt to remedy and give the borrower that chance to avoid foreclosure. Whether you think they should at that point is another story but just curious what the law says.

Where I am at right now - I am straddling having the financing contingency period ending prior to auction but likely a close date after auction. I could maybe put together cash and/or cash equivalent (short term loan that will close quickly) but I don't really want to 😬

Dan

I understand this may fall under the "consult with your attorney" category, but I thought I'd throw this question out there.

In the state of Ohio, if a house is in foreclosure and scheduled to go to auction, if I successfully contact the owner and we write up a purchase agreement, does the foreclosing bank need to honor that attempt of redemption, assuming that it exceeds the amount claimed in the foreclosure?

My general assumption is that the bank shouldn't care as long as the amount exceeds their claim in the foreclosure. My concern is the financing contingency, that they wouldn't want to potentially add any time to the process. I'd have a conventional financing contingency but it the time period for that contingency would fall before the auction date.

Thank you in advance!

I understand this may fall under the "consult with your attorney" category, but I thought I'd throw this question out there. 

In the state of Ohio, if a house is in foreclosure and scheduled to go to auction, if I successfully contact the owner and we write up a purchase agreement, does the foreclosing bank need to honor that attempt of redemption, assuming that it exceeds the amount claimed in the foreclosure?

My general assumption is that the bank shouldn't care as long as the amount exceeds their claim in the foreclosure. My concern is the financing contingency, that they wouldn't want to potentially add any time to the process. I'd have a conventional financing contingency but it the time period for that contingency would fall before the auction date. 

Thank you in advance! 

I've heard the old saying that an investor's only regret is selling a property. I have a single family house that we BRRRR'ed but the tenants are moving out soon. I'm getting more and more tempted to sell & 1031 exchange into a nicer bigger 2-4 unit.

• Expected net profit from sale: ~50k
• Rent: $1,800
• PITI Payment: $930

So even with conservative reserves (30% = $540), I can pure cash flow about $330 by holding. 

Thanks in advance,

Dan

Hi Paul, 

I live and invest in Toledo. You can probably do well in either, but my first thought is that you can actually get a quality low maintenance home in a safe neighborhood in Toledo within that budget. Columbus is a great city with many benefits, but I am not so sure you can get all that in Columbus. 

There are a handful of good Toledo realtors on BP here that could definitely meet all your bullet points. 

Dan 

@Luke Grieshop

My last cash-out refinance took about 3 months to close, so that's about half a normal 6 month seasoning period anyways! With the huge volume of both normal mortgages and refinances, banks are prioritizing normal purchase mortgages to keep people from literally being homeless during their moving process. The cash-out refinance delays don't result in anyone being on the streets, just disgruntled. As others have mentioned, you may have different experience in commercial world.

I am currently looking at a small apartment and I like a lot of things about it such as the location and size. It is a foreclosure. From my research and the court docket, It appears that the current owner is 86 and lives in one of the units. He is the son of the developer that built it. I am having a tough time making an objective decision whether this is a hurdle that can be jumped or a deal breaker.

I have no way to verify current rents since this is a foreclosure, but I would guess the worst case scenario that this current owner is living for free. So in that scenario, I could ask him to sign an agreeable new lease, likely still below a market premium. Worst worst case, he refuses to sign a lease or pay anything, I don't have the heart to evict him, and lose out on that rent for... However long.

Has anyone had a similar situation or have any advice?

Thanks!

@Karl Dela Cruz

I may have missed this detail in middle posts - but are you doing them yourself or having someone else do it? Those look like DIY prices.

First, know that both are fine options. Below are some things to consider:

-Is the hardwood on its last sanding or is it nice and thick? If they're thin, advantage LVP, if thick, advantage refinish.

-Do you have bad patch jobs? Sometimes it's easier and even looks nicer to cover in LVP if you have existing bad patch jobs.

If you're DIYing, I'd say refinishing is easier. LVP seems easy when you have long stretches but getting under/around door jambs etc can be frustratingly slow. Also, don't underestimate getting a level subfloor, otherwise you'll end up pulling them all out and doing it again.

If you're going refinishing, do 3+ coats of polyurethane especially if it's a rental. There are plenty of youtube videos on refinishing hardwood floors.

@Ben Cohen

HELOC all day, in my opinion. Some reasons:

-You could likely do both the purchase and the rehab in that budget, depending on your market. That would be a healthy budget for me in Toledo.

-The heloc is as good as cash, meaning you can do almost anything you want with it.

-You can do interest-only payments on the heloc through the rehab, which keeps your holding costs down.

-Most helocs have respectably low interest rates, so it's not free but it's pretty darn good.

-You can keep your real cash on hand, in case of curve balls or simply coming up a little short on the refinance. Let's not forget family emergencies, you need some cash.

-Yes, I would refinance to a standard mortgage once the rehab is done.

-You can then do it again. That's the last R of BRRRR, after all!

All - this issue has been resolved. Thanks for the help, no need to continue arguing 😁