All Forum Posts by: Deanna S.

Thank you @Jay Hinrichs.  One of my accounts is Schwab.  Do you have any particular suggestions with them?  This is super helpful!  

Thank you @Jay Hinrichs, @Jeff Rabinowitz, @Dmitriy Fomichenko, @Stephanie Medellin for your responses.  We ended up not getting the duplex after all.  I gave a solid offer but they took one just slightly higher.  I think it is for the best.  It was a great experience and I learned a lot through it.  

I need to understand the exit strategy better, too, with solo 401k and/or a self directed IRA. Are there any resources you could direct me to for that? My husband and I will be 65 in only 16 years so need to be super smart about what we do with our current retirement accounts. I was inspired into all this by a @BillManaserro podcast in Sept right when my youngest started Kindergarten. Time to get working again and make money work for me. I have always been very focused on giving back.

We are under contract for our first property, a triplex, that already has 20% equity.   Happy about that.  This is just conventional and our strategy is buy and hold/cash flow.  If I can be a help to you, please let me know.  

@Stephanie Medellin @Jay Hinrichs Thank you for your responses.  We are purchasing the property through trust using a solo401K.  The lender I spoke to requires 40% down.    With the required down, closing costs, insurance, and other prepaid expenses, we will be close to the amount we have in the fund.  From my analysis, we will have only about $3k reserves.  The duplex has one tenant so their is a source of income from day one.  We anticipate having another tenant quickly.   Thank you for any additional insight you have on my question.  I decided not to go up in asking price.  I'll find out tomorrow if I am fact the one who got the contract as there was another offer.  

Hello BP experts.  We are negotiating an offer for a property (a duplex) and will be using a nonrecourse loan for the financing.  Does anyone know what the IRS requirements or guidelines are for required reserves when using a nonrecourse loan?  We will be putting 40% down.    We want to make sure we have enough funds to close on this deal.  They are asking for a counteroffer right now and I'm not sure what to do.   Does the required reserve vary by lender?  The property is in Cuyahoga County Ohio.  The lender I've spoken to is away for MLK long weekend until Wed. and I forgot to ask him this question.  My counter offer may not offer enough reserves so appreciate timely advice. 

Thank you!  

@Brandon Hall. I'm in Alexandria, VA and am interested in discussing our tax needs with you. We are under contract for our first property, a triplex in Cuyahoga County. We are waiting to hear back on an offer on a duplex, also in Cuyahoga County. Thanks, Brandon! I heard your recent podcast and it was great. I just didn't expect our first RE deals to happen so quickly this year. Thankful.

Thank you for your response, @Allison B. Can you explain to me where the HELOC equity would come from? Is it based on the appraisal of this triplex and would it have to appraise 20% over list?

This is our first investment property.  

We are in the process of putting a HELOC on our home but we do not want to use that for buying property. It is only for emergency. @Brandon Turner, do you have any suggestions on this?  

We have been leaders for Crown Financial Ministries over the years and we are very conservative with how we handle our money.  

This property is not a BRRRR either. It is just a straight buy and hold for cash flow which should be about $200/door. Thanks, all.

The 17 year old water heater has an active leak on the top and bottom.  It still works but the inspector says it is an active leak and indicates it near the end of its time.  

The 9 year old hot water heater has a leak with the relief valve.  The report says "relief valve shows signs of consistent leakage" (rather than an active leak).

It also says for both units that the "vent pipe from water heater not sealed at chimney."  We are thinking that isn't a big issue.  

Thank you @Christopher Phillips for all your help today.

It is a buy and hold at least 7 years.  We never plan to live in this property as it is out of state for us.  We will visit the location at least 2-3 times as year as within a 2 hour drive from in-laws. The seller agreed to our first offer and we do believe we are getting it for a great price.  @Christopher Phillips, how do you think we leverage the overall condition to get the biggest discount possible without blowing the deal AND offending the owner?  The owner has taken great pride in ownership.  He is a very nice man and he gave us his phone # when he stopped by yesterday as he thought the inspection was over.  He does not have the inspection report and he was not there for any of that discussion.  He is more than happy to give me all the contact information for everyone who worked on the house, including the roofer (roof put in about 7 years ago), the pavers for the driveway (recently paved but still needs final sealant), and even former tenants who may want to live there again.  It is not occupied.  Is in very good condition.  You can tell he has managed it well.  Never had a smoker or pet, no Sec. 8, always easy to find quality tenants, great location.  Thank you for your forthcoming advisement.  We are newbies and advice/wisdom/lessons learned is so appreciated!  

Hello, BP community.  We are under contract on our first property, a 1920 Cleveland Heights triplex.  We can't say enough good things about @Aaron Westerburg of Inspection Tech.  The home inspection yesterday was a great experience and we have a good understanding of the property.  

There are some issues to address and we are trying to keep our closing costs low but did not include a credit with our offer.  We are doing conventional financing with a 30 day escrow. We would appreciate advice on which issues to address and how to structure this deal at this point with the seller.  We met the seller yesterday and he will give us all the info on the house as well as the workers he used.  He did a lot of the work himself.  He had the property 30 years and is selling due to being 70 and moving on. The relationship with him is important we he is local and we are out of state investors.   

The inspection issues we noted particularly are:

1) some leaks in the bathrooms and 1 kitchen (we will ask him to fix all these-nothing major)

2) missing gas cap

3) both furnaces need new filters or cleaned

4) 9 year old and 17 year old hot water leak both leak at relief valve.  17 year old one has an active leak.

5) Vent pipe from both water heaters not sealed at chimney.

5) Electric panels (there are 3) - there are different brands of breakers. Is that a big deal?  Also, one panel has double tapping.  

6) Ungrounded outlet within 6 ft of water in basement laundry area. Handyman wiring present at laundry area. Recommend upgrading to GFCI protected outlets.

7) Wood basement steps are pulled apart but still usable to date.

8) Both dryer vents needs to be replaced and are missing covers.

Our realtor is suggesting that seller address the below 3 areas only as he negotiated for us and the seller accepted our first offer.  Our realtor noted, "Part of the reason the seller accepted your first offer was to account for minor issues that usually come up during inspection to avoid as much back-and-forth on repairs/price concessions as possible."

Our realtor recommends the following only for contingencies:

- Properly secure the basement stairs

- Correct all plumbing leaks

- Repair the dryer vent using proper materials

- - Test for lead based paint as recommended by the general inspector.  (note: this was in the stairwell only and owner told us he would paint that.)

Thank you, BP, for your sage advice as we close on our first deal.   

With much appreciation,

The Stacys

Hello.  We are under contract for our first property (a triplex) since last Friday.  We have a 30 day escrow.  Home inspection was yesterday.  Now we need to secure our financing.  We are preapproved with Wells Fargo and their terms are 5.125 and processing fee of $470.  We plan to do a 30 year fixed loan. The property is rent ready needing less than $1k, we agreed on a good price but it is till 25% cash down for our family + closing costs.  Cash on hand is a BIG deal to us right now.

Another lender that is a division of First Bank Tennessee is offering us 4.875 with no processing fee. Below is the 2nd lenders quoted closing costs for all fees (minus the inspection that we paid for already).  We anticipated Wells Fargo will be $470 more and a higher rate but we know they will get the loan processed quickly.  They have a team that works with investors only and have been super responsive.  Which lender would you go with and why? 

As far as the closing costs, we also could negotiate the seller give us a credit as there are some inspection issues but nothing major (except the hot water heaters are leaking and one is 9 years old and the other is 17 years old).  The 17 year old one has an active leak. Our realtor stated the following last night to us so we aren't sure how much negotiating we can do on that.  

"The inspection report looks good overall.  Part of the reason the seller accepted your first offer was to account for minor issues that usually come up during inspection to avoid as much back-and-forth on repairs/price concessions as possible.  You are free to request any repairs/price concessions you'd like, but here is what I recommend:  (then he lists a couple small things and does not ask include replacing the 17 year old hot water heater).  

We are trying to keep our costs as low as possible out of necessity and business relationships are important to us.  We also met the owner of the triplex yesterday after the inspection and he was super nice and would like to be available to us for any questions we might have on the property.  He owned it 30 years, self managed it, did most of the repairs himself.  Really nice retired man who lives nearby.  We are out of state investors so all these relationships are important to us and we see this as our first property, not our one and only.  

Thank you, BP.