All Forum Posts by: Deon Knott

@Kathy Lowery I would try shopping around with other lenders. I was in a similar situation where I had a property under contract using seller financing/land contract. I'd be losing money or breaking even at best under the LC but, with traditional financing the property would cash flow great. So I needed to get out soon. Quicken/Rocket, who many consider much less creative and flexible than most other lenders was able to refinance once I reached six months of ownership. That was late 2020/early 2021. Short story long, if Quicken can do this I expect that other lenders would have similar guidelines that would benefit you. Hope this helps.

@Caleb Brown no, it's strictly due to some unique features of the property based on how it's constructed. It's built well and I expect there to be issues at inspection, maybe even enough issues to walk away from the property, but nothing related to how it's constructed or outside of the usual issues you'd see in an older home. It doesn't effect the interest rate or anything. Just unique enough to make lenders leery of putting a loan on it.

As far as my terms, the property appears to be under valued which is not easy to find these days. That's a large portion of what makes this a good deal. But if the value doesn't leave the kind of equity I anticipate, the uniqueness of the property becomes more of a detriment than a benefit. Especially if it's valued at less than what I offered. Also, I'm concerned if the lender may stipulate any modifications to the property in order for them to deem it acceptable. The seller won't do anything else to the property and I don't think it would be worth it for me to do so unless again, the value is significantly higher than the price leaving considerable equity. Hopefully that's at least as clear as mud.

@Andrew Garcia Thanks! My agent and the LO are definitely not seeing eye to eye. It's a unique property we are working with and has been hard to finance due to it's uniqueness. We enacted the financing clause a few weeks ago as our 7 day due diligence was almost up and several lenders declined the property. I started working with my current loan officer after we started the process of release. My agent had already been in contact with the listing agent and informed them that we were still enthusiastic about the home and getting me approved wasn't the issue. Finding a lender who was comfortable with the property was the issue. She impressed upon the listing agent that we were continuing our search for financing and would return with an offer once/if we found the right lender, pending the property was still available (it's been on the market for almost a year). The listing agent understood this and agreed to the release and affirmed that he would be happy to start where we left off if financing is secured. I started working with my current loan officer the following day and he quickly called the listing agent essentially convincing him that I was going to be approved and we were close to getting the loan done. This kept them from signing the release and it's still not signed. I want the property but, of course only under the terms that work for me. My concern is the loan not working out in my favor and having to jump through hoops to get the release. The loan officer is very diligent and hard working which I thoroughly appreciate. However, as often the case with commission based situations, he at times seem more focused on closing this loan than with me as a client, resulting in my agent and I repeating ourselves on topics we thought we made clear.

@Katherine Blazer I think the group text is a great idea. Thanks!

Good Morning BP,

My loan officer called the listing agent without my request or consent. I don't believe any foul play is afoot, just a very enthusiastic and motivated loan officer. Which is typically a great thing! It does leave me feeling a bit uncomfortable though because he continues to reach out unprompted and confusimg some of the communication between my agent and the listing agent. Also, since I have never requested that my loan officer reach out I'm left a bit uneasy as to the extent of information is being shared. Especially since they have worked together before. Again, I believe my loan officer is a good guy and just trying to close a loan. I'm just not familiar with this play and since I didn't ask for it, it makes me uncomfortable. I don't have anything to hide. I just feel that this activity could be a conflict of interest. Had I asked him to reach out I wouldn't be bothered at all. Am I blowing this out of proportion or are my concerns valid?

@Jerryll Noorden sounds like you were personally offended at his remark. I can understand why. But what you have to understand is the vast majority of people don't approach college with this level of attention, planning, and engagement. And thus they don't reap the rewards that you have. Furthermore it takes a lot of time and money to accumulate those credentials unless you were a stud in highschool or already have the money to pay. That's just a fact or else we wouldn't have the student loan "crisis" that we have or at least supposedly have now. Your accomplishments are remarkable. But your comment was the exact tone as his. College didn't work for him so it was a waste of time. College worked for you so it's not a waste of time. You're both just speaking from your own experiences, you a bit more aggressively so. And with reason because you have verifiable results. The point is if we don't know anything about this kid or his aptitude the best advice to give him is based on what would be most effective for the average person. It doesn't suit the average person to commit 15 years of their life to higher learning when they could just jump into the field and pursue real estate now. It sounds like you already believe yourself to be an exceptional and above average person as "you have done in 1 year I'm REI than most have their entire career". If that's true I agree. You are exceptional and above average. But that's not the average person. Heck, even the founders of this platform didn't do what you did. That alone proves college, while great for some, definitely isn't necessary and very likely isn't the best path for alot of people who want to pursue REI. But don't think I wholeheartedly disagree with you. I have a Bachelor's in Marketing and if I could do it over again I would probably get a nursing degree or some other STEM degree to pay off debt sooner and have a better DTI ratio with less debt and a higher gross salary. Also, it would provide me with a network of potential investors with other gross salaries to go in on deals with me. Short story long, more than one way to skin a cat.

@Joshua Milam They should major in something that will provide them with an above average income and job stability. In real estate investing 4 things are always extremely helpful. 1. Cash, 2. Good debt to income ratio (debt as low as possible and income as high as possible), 3. good credit, 4. free time/flexibility. Not necessarily in that order but, in my experience that is the order of importance or helpfulness for me.

If I could do it over again I would havebeither skipped college or gone to school for nursing, been a travel nurse for the first 5 years to pay off debt quicker at a higher rate of pay and travel the country or at least my region to get as familiar as possible with real estate markets at home and away from home. I would have stashed as much cash as possible and stayed away from any debt that wasn't tied to an investment. As a nurse you can work 3, 12-hour shifts and have the rest of the week to deal with real estate.

Of course this isn't the only way or maybe not even the best. But I sincerely think you should never go to college to learn about real estate. College is an investment so they need to major in whatever gives them the best return on investment. There is nothing that college can teach you better than actually investing in real estate and learning for yourself or following Bigger Pockets or any other reputable source online. Short story long, if real estate investing is the ultimate goal, forego college altogether or major in something that provides great pay and some flexibility to serve as the foundation for your real estate investing. Don't use college to learn real estate investing skills.....there's books and YouTube for that. You would literally be better off spending 8 hours a day on the Bigger Pockets app than in being in school learning real estate.

@Frank Wong

Thanks Frank! Thanks to all of you guys. Looking more into it the home is 600 square feet. We have design ques we always try to implement that we will definitely apply here. As far as layout, obviously the room dimensions are small. The oddest thing is the two bedrooms and kitchen all are off of the living room. But, the bathroom is off of the kitchen. Meaning, you'd have to go through the kitchen to get to the bathroom.

On the plus side, the lack of sq ft is made up for with a huge front yard (largest in the bl

ock)

a very nice shed out back and it's rent ready. I'd just do some cosmetic touches.

Is this too small or too strange of a layout to work? The property will cash flow and we'd be doing a buy and hold.

Hey Guys, I'm looking at a home with a little less than 800 square feet.  The deal seemed good at first.  The location is good. The neighborhood is good.  The rents are good etc.  However, we've  never purchased a property this small before.  Even the duplexes we have are 1000 square feet.  Are you guys aware of any issues with marketing, renting, selling, pulling equity, etc.?  No other home in the area from what I can see is similar in size.  Our main concern is our ability to pull equity as our strategy for growth stands on that feature.  Any insight is helpful.  We are in Michigan if that helps.  Thanks!

I have been in real estate as a buy and hold investor for 4 years. I have three units concentrated in Oakland County Michigan.