All Forum Posts by: Josh Dillingham

My house had already been listed on the market for about 6 months at a much higher price which would not have been a short sale but after not selling for so long and running out of cash for the rehab she had planned the seller slashed the price by 50k because her deadline with the bank was closing in. which is what caught my eye on the property. So I'm not sure if agents are required. 

It makes sense for the bank to consider some sort of short sale, especially with the contract liens, the bank isn't going to want to be responsible for those as well as all the other holding costs and selling costs they will incur if they take position of the property. 

I don't think there is any certain amount of discount that would make a house a short sale. From my understanding any house that is sold for less than what the bank(s) is owed would be considered a short sale.

I just bought a short sale 4 months ago in southern Vermont. In my case the sellers bank agreed to extend the foreclosure date and told the seller they would consider a short sale. Might be worth having the dentist ask his bank if they would consider a short sale, if they say yes that could buy you both some time. The contractor liens sound like a more stick situation. I wouldn't buy the place with those hanging over my head. Maybe you could talk to the contractors before hand and see what could be worked out. Maybe if they cut the bills in half the dentist could afford them and you could walk away with the short sale.

for me the 203k didn't make sense because the amount of repairs needed were small and the fees associated with a 203k ( as opposed to a normal FHA) are higher. If the repairs are $30-50k or more then a 203k could make sense. If you've got absolutely no savings it will be very hard to get an FHA loan (or any kind of loan) you will also need some money for closing costs.

A sellers agent is going to want you to be pre-approved before they show you a place. You can do that by talking to a loan officer and getting a preapproved letter

As far as the contract goes your agent will write that for you. First youll submit an offer, then if it gets accepted you'll sign a purchase agreement.

do you have an estimate for your monthly expenses? it's hard to make any judgment without that info. When I analyze deals I have a cash flow per unit number in mind and if I run all the numbers and it meets my cash flow requirements, it's a good deal.

@Mohammad Haidarasl I bought a house earlier this year with a standard FHA loan. My house did require roughly 8K in rehab and I considered a 203k loan but after talking about it with my loan officer the additional closing costs of a 203k loan weren't worth it for such a small amount of rehab. Talk to @Upen Patel. He was my loan officer, he specializes in FHA's and is very knowledgeable.

I I'mt bought a property that appraised for $40k under town assessment because of deferred maintenance over the  past 10 years with the former owner. I was thinking about. Challenging the value with the town which would save me $1200 in property tax, but my plan is to cash out refi and use the money for another down payment. My thinking is that if an appraiser sees the higher town assessment along with all the work I have done, it might help me get the appraisal I need to have enough equity for a down payment. Do you all think it's worth it for me to pay the higher property tax now, or will the appraiser not even consider the town assessment?

I'm with @Alexander Felice. It sounds like finding hard money/ private money to close on the deal then refinance to a conventional loan once the property is stably cash flowing would be a good solution. It will probably still be very difficult for you to find a hard money lender willing to finance 100% of the deal. but there could be a hard money person out there who is more understanding of you're LTV rational than a bank would be.

I joined BiggerPockets a few years ago when I was researching ways to build wealth.  I logged in Browsed a bit, got distracted and didn't come back.  About 9 months ago I logged back in and started reading forum posts.  It wasn't until that time that I started to realize I could actually buy property and started building wealth...not 5 years from now, like I had always convinced myself, but now.  So I took action, just like the blogs and forums say.  I set up a viewing, then I made and offer, before I knew it I was way in over my head on a short sale of a Tri-plex.  Flying by the seat of my pants every step of the way. Running to bigger pockets every day for more information Now I'm about 3 weeks into ownership of that property after a 4+ month contract period and many headaches. 

Not surprising, the single most helpful individual in this whole process was someone I met on Bigger Pockets, who would become my loan officer, @Upen Patel, with The Federal Savings Bank. He was always prompt in answering emails or phone calls, seemingly working all hours of the day and night (I'm sure I appreciated that much more than his family!) This deal almost died multipule times, with issues regarding third party approval of the short sale, and FHA required repairs in order to close, and each time I hit a road block, and my agent and myself were scratching our heads Upen was there to point us in the right direction. Being involved in REI makes Upen invaluable to someone like me, a first time home buyer with an eye one investment properties. He was even able to work his magic to arrange and escrow account for exterior painting on a standard FHA loan, which I was told by local banks wasn't possible. Without Upen's expertise this deal never would have been done.

To the numbers: I bought the house with 3.5% down using an FHA loan. I will be occupying one unit for at least a year or two, per FHA requirements, and I currently have the other units rented out. Purchase price was $122,500, financed $118,000 at 3.75% the town assess the property at $162,000, it was appraised at $124,000 due to deferred maintenance which I plan to correct within 4 months of ownership. My Total monthly expenses (including savings for repairs) will be $1,500 and I am currently receiving rent for $1745 for a cash flow of $245 but when I move out of the bottom unit and rent it the cash flow will rise to $1195.

My plan is to make necessary repairs to force appreciation and get a new appraisal in the summer time which I hope will be for around $170,000. Then refinance and cash out some of that equity and start the process all over again. BRRRR

I wanted to write this so that if you are in the same situation I was in a year ago, Thinking you are years away from getting started in real estate investing, know that  you are much closer than you think.  Keep learning and keep searching for the deals, once you find that deal you'll realize not only can you afford to invest, but you can't afford not too!

I'm about a week out from closing on a property, the FHA loan has been underwritten, should be getting the final loan papers to sign in the next day or so then I get this:

"Upon review of the appraisal, there are issues with the property. The property does NOT meet FHA minimum standards as per FHA handbook 4000.1. The following needs to be finished.

1.Exterior peeling paint and areas that are not vinyl sided need to be painted. There is the possibility of lead paint on the exterior and interior. ($4000)

2.The kitchen, bath, and bedroom has missing trim, floor cover is old.  ($4000)

3.Second floor hall has missing ceiling, with plaster fallen. ($750)

4.The stairs kick plates need painting, the upstairs bathroom needs scrape and painting as there is peeling. ($1000)

5.The furnace needs to be inspected for safety and if it is adequate. The furnace appears to be very old and while functioning may not have much of a remaining life. ($100)"

I was aware of all of this needed work and it is factored into the asking price of the house. This is a short sale (already approved by the bank) and the seller is not in a position to complete this work before the sale. Is my FHA loan dead? I don't have the down payment for a conventional loan at this time. could a FHA 203K loan (for houses in need of repair) still be an option? or is my deal officially sunk?

any advice would be GREATLY appreciated.

I put a property under contract one week ago and it is still listed as active on the MLS. Should I be concerned about this? Is it worth contracting my agent and requesting the selling agent change the status or should I just not worry about it?