All Forum Posts by: David Dachtera

Folks listing their properties with brokers / agents are usually looking for top dollar. So, MLS is often not a source to find "bargains". You may find some here and there, but not as a matter of course.

If a property's asking price is not supported by the property's condition, that needs to be expressed in your offer. Explain why your offer is below the asking price so the seller can decide if they want to negotiate.

Sellers are often not so different from investors: they have dollar signs in their eyes.

My $0.02 ...

There's a kit you can get at Menard's to make screens in the size you need. Cut the rails to length and join them with the joiners in the kit. Then, install screen fabric. It's for fixed-position screen only - no latches or anything like that. Maybe that's how they're all made these days.

Hope this helps ...

It's important to note that Short Term Rental - the business AirBnB is in - is *NOT* real estate! It's the Hospitality Industry and is a whole different ball of wax. If you have no prior experience with it, you should pursue that study first and decide if you even want to do it.

My $0.02 ...

@Chris Kendrick,

Yes - red flags.

On the other hand, they didn't ask for money up front, just your personal info.

An established business would be better. That said, I got my 3rd job ever (installing car stereo and alarms) when I asked the boss how does one get experience if no one will hire you. Everyone's gotta start somewhere. 

My $0.02 ...

Ask your attorney if misrepresentations on the application would be grounds for eviction.

What I would do ...

Take care of the roof first.

If the HVAC and hot water are still working, bump them down on the priority list.

Address the water intrusion (almost tied with the roof for the #1 position).

Can you still exercise your inspection contingency rights or has that expired?

I see this is a duplex; i.e., a residential property.

That's only from the lender's perspective. For an investor, the usual rules for income property still apply. That means, you need to see the income and expense numbers for the units so you can verify that the NOI provides sufficient Debt Service Coverage. The ratio of the NOI to debt service should still meet or exceed the 1.2 to 1 benchmark (Debt Service Coverage Ratio).

Of course, that's just one way to look at it. What I would do is run those numbers and verify that the projected cash flow should be positive. That will help you determine the validity of the asking price.

A new loan product out there called a DSCR Loan (Debt Service Coverage Ratio Loan). It goes by the property's ability to provide sufficient income to meet the lender's criteria, often bypassing your personal income as a criterion. It illustrates the importance of meeting the debt service coverage criteria.

My $0.02 ...

Speak to a CPA who is also a real estate attorney, if you can.

That said, my local colleagues are finding that as long as the payments are coming in reliably it's cheaper - and more profitable - for the lender to forego due on sale than to take the hit on income and foreclosure expense.

Their preferred form of "seller financing" is lease option to reduce the seller's tax liability due to depreciation recovery.

My $0.02 ...

Hhhmmm... Now, I'm wondering ... can a 203K be used to acquire a property to house-hack ?

Got me some research to do ... 

Lenders can be one source of funding, but should not be your only source. 

An entrepreneur's most important activity is fundraising - finding others willing to invest in your ventures. That means networking and preparing conversations and presentations to show your ideas to others.

Together, we are stronger than any individual can be.

My $0.02 ...