All Forum Posts by: David Seale

As a new investor myself, Anthony makes a good point. My first thoughts would be how well does the rental property in California do for you? But then again, if it does well or even if it doesn't, getting into a less expensive market would be a nice way to achieve your goals of more multi family properties. 

Is there a way to get looser on cash? If not, how can you get more? Have you started talking to lenders? Friends and family? 

So the title of this thread is based on the fact that I'm a new investor and it's quite probable that these arent't new strategies. My fiancé and I met with a hard money lender this afternoon and two things came out of it that I have not been exposed to.

1. The lender is essentially guaranteeing a refinance before the rehab even begins. Based on our credit scores, income, cash, arv, etc. they'll be able to lock us in at an estimated 4.25 interest rate before we even get to the point of signing any contracts. 

2. As it relates to funding the rehab process, I've only heard of getting these funds through draw requests throughout the rehab process. This lender, like others, rolls the rehab costs into the loan like everyone else does but makes you pay out of pocket for the repairs and then submit the invoice for it before getting paid back. 

I guess my questions are 1, are either of these standard practice? 2, what is the risk/reward in doing either of these?

Bonus questions, what's everyone's opinion on using your own cash to fund as much of the purchase and rehab versus using hard money? Especially for a first time investment? In our short time learning about investing, you hear a lot about trying to fund deals with as little of your own money as possible but there's this thing called debt and we're kind of afraid of it.

Thank you!

All, thank-you for the suggestions and advice. 

@Mindy Jensen, it seems like a local title company. We asked who underwrote for them and they said three different companies (WFH, Fidelity and someone else). 

We ended up requesting again to use our company of choice or asking for them for a discount. Looks like we will be 100% with fidelity national.  

Newbie investor here and am uneducated on the choices I have for a situation I'm in.

I've always heard that the title company of choice used in a real estate transaction should be up to the buyer and that the buyer should shop/select a company based on their tenure/value/reliability/etc. 

My fiancé and I have just finished negotiating terms on the contract and are in the process of signing on a property. We requested to use a title company that we've worked with in the past for this transaction. The agent at first agrees and fills out the contract with our requested company. However, she then comes back and says the seller "already opened title" with another company. Without knowing exactly what opening title encapsulates, I can guess that seller has essentially started processing the paperwork and such with the other company. Maybe even paid a fee. BTW the name of the company is http://onenationtitle.com.

My question is, what is the best way to navigate this snag? Should we not even worry about it? Should we negotiate to lower the purchase price to reflect the cost the seller might have incurred?

Thanks!

 Thank you for giving me the opportunity to join you, Tony. For a first time job you should definitely give yourself more credit! Glad to have been of service but more importantly thanks for the time.

Thank you for the great advice @Christopher Cousin. We will absolutely consider this when we make our decisions. 

Thank you for your response! You ask some very important questions. Container homes are simply modular home solutions. We have yet to confirm, but we've see other container homes be built on similarly zoned lots. Total build cost could be as little as $90k or as much as $150k (again this would be for two liveable units which one we will live in). Yes the land is ready to be built on after a little bit more clearing of high grass and small bushes/trees. Its about 70% cleared as it stands today. Re: utilities, its ready for all of it. 

Re: our current home mortgage, you're right and it feels very constricting. The loss, I feel, is almost inevitable. It may be a few hundred dollars we are talking about. Luckily HOA is rolled up into our mortgage, utilities will be transferred, we have no lawn (townhome), and we will manage the property ourselves. Cap ex, while we will plan to save for it, the home is a brand new build so we hope repairs will be minimal.

Our thought is if we can free up some of the burden on our current home by renting it (even if we lose $500/mo.) then it allows us to save money moving forward. Even on a new build. But it feels like we are missing an important step in considering moving forward on this road and it may be better to just hold onto the land. 

Hopefully I'm making sense!

 Thank you Gilian!

Hello BiggerPockets Community!

A little over month after my first exposure to BP and RE Investing, I'm unequivocally convinced of its profitability and incredibly excited to join/learn/contribute from this community. One of the things I am blown away by is how much time members of this community offer their time advice to help others succeed. Thank you all for that.

A little about me... I'm 32. A native of houston. I grew up in St. Petersburg, FL. Graduated from the University of Houston Conrad Hilton College of hotel management. In my career I've been a golf club professional, worked for Apple Inc., and was a digital brand marketer for the best company to ever do it, Nike. I'm also engaged to be married and she's just as excited about this endeavor as I am. I would consider our real estate experience to be on the low end, however we purchased a home about 18 months ago and have listened to about ten podcasts in the last month so that must count for something. Im looking forward to learning from everyone on the forums and connecting with local BP members.

If you’re still with me, I’ve got a deal we’re working on I’d like to share and few questions for those who have the time. :)

We have been "driving for dollars" as @Brandon Turner likes to call it and last week we came across a phone number posted on a residential lot in an up & coming, gentrifying neighborhood of Houston’s Fifth Ward (77020). The lot had not been posted for sale on any thing like HAR, Zillow, etc. Most would probably consider the area a dangerous part of houston, but if you were to reference Zillow crime maps... it's in the green. Also, there's lots of development going up in the area with new town homes (and rehabbed homes alike. The seller wants $25k for the 5k sf lot (fwiw, the city appraised the lot at $21.2k.) We verbally agreed on $24k and are in the process of arranging the CASH sale. After a really good amount of research on land values in this and similar areas, we really feel like we have a "good deal" on our hands. The land has been about %70 cleared with some work left to do in tree removal and high grass. He has also built new 6ft wooden fences on the front and back (shorter sides) of the lot as well as an iron gate that is on a sliding track for opening and closing. There is an existing 3 ft chain link fence on the sides of the property.

Our goal for property land is to either sit on the land for a while or build two container homes/units and live in one of them (the later is preferred). Kind of a combination of house hacking and the approach used by @Cameron Skinner in podcast 168. Right across the street is Englewood Union Pacific Rail Yard and there are thousands of shipping containers sitting on this lot. I think this unique combination provides a cool story for the homes. Thinking 3 40 footers at about 960+ sf per unit. We would also plan to vacate and rent our current home. We currently pay about 3.4k on the mortgage (we went with big and shiny for our first home, we wish we hadn't) and feel that we could rent it out for close to that.

Here are a few questions we have, they're in no particular order. If you have time to answer one or all, its equally appreciated!

1. For those in Houston and know the area, what do you think of the deal?
2. If you were in my shoes and wanted to build, what type of loan would you go after to complete the build on this property? Private hard money lender? Bank construction loan?
3. How should I approach individuals for private loans if I go that route? BP calculator forms are obviously a plus to show the potential of a deal, but what about specific contractual agreements? What is the expected turnaround time of a private lender?
4. Partnerships. How have you learned to navigate through conflicts of interest and decision making in your ventures with other partners? On this exact deal we included and developed mutual agreements to move forward as a "partnership" with the sis/bro-in-law and it's already proven to show some differences in opinion.
5. If you live in Houston would you want to grab a beer, play golf or eat a meal somewhere?

Thanks for reading! Looking forward to interacting with everyone.