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All Forum Posts by: David H.

David H. has started 6 posts and replied 117 times.

Post: Could this be a good deal even though it has negative cash flow?

David H.Posted
  • Real Estate Investor
  • Harvey, LA
  • Posts 119
  • Votes 80
Originally posted by @Kay H.:

 Ohh I finally see what you mean by saying I will be paying the rent. But will I really? The p&i is 1305 and there are 2 renters paying 1400 hundred all together. So I would only have to pay the tax and ins payment. I'm sure maintenance and vacant won't happen every month right? 

What could I do to possibly make this work? Lower the sales price ?

  LOL ???? very rookie...not insulting you, but just pointing out the fallacy of P&I being the rent portion and the TI being holding cost. Your "rent" is the opportunity cost of not living there and renting it to another person. By not charging rent to another person, you are in effect charging rent to yourself.

I did some quick research, and you can probably get other FHA homes for less. Bottom line, negotiate a lower sales price to get to breakeven cash flow based on the condition it is in today. If you invest in improvements, target a 50% return on capital ($20k value for $10k invested). If you love living in the area and can't make the numbers work, do what I do and rent.

I've never owner occupied in years. I rent in the expensive part of town because my landlord is willing to lose money on the deal and living a pipe dream about depreciation and appreciation making him money at the same time! ???? Don't tell him I said that!

Post: convert 4plex to single family?

David H.Posted
  • Real Estate Investor
  • Harvey, LA
  • Posts 119
  • Votes 80

I'm bidding on a 4plex that has lost it's zoning variance due to vacancy for over one year. The parish(county on most states) rezoned to R1 single family 20 years ago to fight blight. Long story short, this will not get a permit for R3.

i could buy the building for land value, but what do i do? Demo and build doesn't look profitable. I thought about just remodeling for a single family without demolishing the building. What are your thoughts? How could i do this conversion?

Post: Rental Property Syndication Services for Advertising

David H.Posted
  • Real Estate Investor
  • Harvey, LA
  • Posts 119
  • Votes 80

I'm using rentec, which then manages the syndication.  I only get emails from hotpads, realtor, trulia, and zillow (.com).  Makes me wonder how much we really need syndication if there's only 4 players.  You could probably do fine just having it on postlets and craigslist.

Post: Are there still 80/15/5 loans in 2015?

David H.Posted
  • Real Estate Investor
  • Harvey, LA
  • Posts 119
  • Votes 80

why don't you do FHA and 3% down? 80/17/3?

Post: HUD Owner Occupant bid question

David H.Posted
  • Real Estate Investor
  • Harvey, LA
  • Posts 119
  • Votes 80

bid on the house as owner occupant.  you might even be able to bid a little less and win it, esp if bidder is a sr citizen.

the requirement (and you have to sign on it) is that you live in it for one year lest you pay a $10k penalty.

Post: Thoughts on having agents show me a property with no intention to buy?

David H.Posted
  • Real Estate Investor
  • Harvey, LA
  • Posts 119
  • Votes 80
Originally posted by @Mark K.:

Hello,

I don’t know if there’s any sort of ethical issues with this but since I’m just starting out, I want start looking at properties in person. I wouldn’t have any intention to buy at the moment even though I will only look at properties which I could actually put a down payment right now (if that makes sense).

I’m trying to ramp up for when I actually am ready to buy. I’m focusing on doing the up front analysis and number crunching and now want to see properties. Should I disclose I don’t have any intention to buy or that I’m a newbie (they can probably tell)? What happens after I see the property, will the agent keep following up with me asking if I want it (I don’t want to deal with that)?

I don’t think there’s anything wrong with asking to see the properties b/c I will build a rapport with the agents who may very well get my money one day. Would love to get your thoughts…

I've built up a reputation and rapport with agents, and they'll sometimes just give me the lockbox code.  See if you can do the same.  Obvs requires trust.  Good luck.

Post: write your own offer to save 3% commission

David H.Posted
  • Real Estate Investor
  • Harvey, LA
  • Posts 119
  • Votes 80
Originally posted by @David H.:
Originally posted by @Ryan J.:

My question is since we are writing our own offers will we pocket the 3% typically paid to the buyers agent? I would assume the 3% would appear as credit on the HUD statement during close.

I've done this before, and usually, the seller's agent doesn't balk too much.  they way I position the deal is that I would waive the 3% buyer's agent commission and get a 3% price reduction instead.  I add it to the end of the notes.

It's not a line item that "comes back" to me in the HUD. It just isn't a line item that goes to anybody. Pretend that the commission was 3% (not 6%) to begin with, and there's no agent on your side making 3%.

Mods: BTW - this is a good hack for the savvy buyer.  It really works if you really don't think you need the help.  If there's a list of hacks on a moderated post, you should add this.  If someone's going to try to pull this off, just be prepared to sign a hold-harmless agreement with the seller's agent.

Lenders could be different.  They may want you to have an agent, so you may have to negotiate with them or find a way around that.

Post: write your own offer to save 3% commission

David H.Posted
  • Real Estate Investor
  • Harvey, LA
  • Posts 119
  • Votes 80
Originally posted by @Ryan J.:

My question is since we are writing our own offers will we pocket the 3% typically paid to the buyers agent? I would assume the 3% would appear as credit on the HUD statement during close.

I've done this before, and usually, the seller's agent doesn't balk too much.  they way I position the deal is that I would waive the 3% buyer's agent commission and get a 3% price reduction instead.  I add it to the end of the notes.

It's not a line item that "comes back" to me in the HUD. It just isn't a line item that goes to anybody. Pretend that the commission was 3% (not 6%) to begin with, and there's no agent on your side making 3%.

Post: Looking to buy in area that will double value in 1 to 2 years

David H.Posted
  • Real Estate Investor
  • Harvey, LA
  • Posts 119
  • Votes 80

I think OP was asking about markets where prices would double, not how to double one's money. Let's not insult his intelligence by assuming he doesn't know the difference.

bottom line is risk slopes with return. You want return? Take a risk. All of us know that.

there's not a single market (>100k population) in the us that can be expected to double in 2015. It's not 2013 anymore. There are international markets that have this level of upside, including fringes in Asia, Spain, Greece, Russia, India, maybe Brazil, Venezuela, and Cuba. Of all the markets, i would bet Vietnam is best poised to experience price appreciation for two reasons. 1) constrained land and 2) increased foreign investment. The European opportunities are still there, but it's really a geo political play that's difficult to control.

Post: Looking to buy in area that will double value in 1 to 2 years

David H.Posted
  • Real Estate Investor
  • Harvey, LA
  • Posts 119
  • Votes 80

don't listen to anyone who tells you it isn't there. It's there. Sounds like you're willing to go international. I'm pretty bullish on Vietnam. Look at all your clothing labels. Used to be made in China. Now, China is too expensive. Jus sayin.

Look into Greece, Spain, Russia, maybe Cuba. Cuba could be an upside bet if Obama finally kills the trade embargo.

in all of these countries, go into urban areas. This is where they will be experiencing their industrial revolution. Moscow is out (already expensive), but there are outer pockets that can perform well. Think Hoi An or Dalat. Also, come with big money and the willingness to bribe local officials. It's usually legal and sometimes expected.

there are areas in New Orleans where I'm tripling my money in six months, but it's through rehab, not macro appreciation.