All Forum Posts by: Mark A.

I drive past my property on the way to work

1) In general the property needs to be owned free and clear. But in reality your downpayment would just need to cover the balance of the seller's mortgage. The other similar option is to get bank financing for 70-80%, seller finance (2nd mortage) 10-15%, and you put in the remaining balance as your downpayment. In this case, between the bank financing and the downpayment you'd need to cover the seller's remaining mortgage balance.

2) I'd use an attorney 

3) You can guess based on when the property was purchased but I don't know of a way to see if it is free and clear.

Also decide where you want to invest and how hands on / hands off you want to be. Certain markets in Florida are still good but you won't cash flow in Miami etc. Thoughts: - there are some great podcasts focusing on the first deal. Michael Blank is one great contributor and he's challenge you to think bigger (than whatever you are currently planning) - also could look at turn key possibly in a different market. Your returns might be slightly lower in turn key but it is often fairly passive. I'd say you are "ready" as soon as you can afford the down payment / due diligence/ closing costs and still have 6-12 months of operating expenses in reserve.

Have you thought about having the remaining $22.5k that you need held by seller financing? You could structure it to pay them back on a 20 or 25 year amortization schedule but as long as there was no penalty for early repayment you could pay any of your "extra" cash flow each month to pay them down faster. 

Following

Yes. 

Or you have to get a mortgage and have the seller hold a second mortgage (the seller financed portion). In this case, the bank must be OK with having the seller hold a 2nd mortgage and the 1st mortgage (from the bank) must at least pay off the money that the seller still owes on the property (their mortgage).

Seller may be more comfortable if you keep them on as property manager / keep the current property manager. If the complex is currently being well run, they may have more faith in your offer if you kept the current management team in place.

To answer your question, a bank will likely want to see you put down 20-30% of the purchase price plus have several months (often in the range of 3-6 months) expenses in reserve. You could also see if the seller wanted to Seller Finance. Even if they didn't want to finance 100% of the purchase, you might be able to put only 10% down, have the seller hold 10-20%, and have the remaining balance financed by a bank.

@Gary Miller You may also want to check out @Account Closed and @Kevin Bupp. They have a great podcast (Mobile Home Park Investing Podcast). Recently they've mentioned that they are looking for partners to invest with (see http://www.kevinbupp.com/kevin-bupp-partners/). I'm not affiliated with them. As a newer physician I don't have the disposable income to invest with them yet but I'd be comfortable investing with them if I was in your situation. 

The issue isn't so much your debt as it is your personal debt to income ratio. I have more student loan debt than you but my salary is also higher so my ratio looks better. I see 2 options for you:

1) Push to get the loans paid down (increase salary, decrease expenses, time to pay down) to improve your personal debt to income ratio

2) Look at larger properties (commercial loans) where the lending criteria is based more on the property than on your personal numbers. If you went this route you'd still need to save up for a downpayment plus reserves (typically 3-6 months of property expenses). These are bigger numbers but in this case the property matters more than your finances.