All Forum Posts by: Derek Woods

There are multiple ways to go about getting the down payment together. You could pull a LOC on either of your current properties or both. That all depends on how much equity you have in the properties. If your not against high risk theirs always using a 0% credit card. Pull cash against a paid for vehicle, be sure and remember you'll have to full coverage insurance with that. SELLER financing would be the best way in my opinion, as their would not be anything reported to the credit bureaus. If you financing the DP be sure and figure in that expense to confirm you can still cash flow.

Hey Everyone,

Looking for some advice.  I have run into a situation that I'm not sure how to move forward with.  I responded to an ad on Craigslist several months ago about a portfolio.  He sent me all the normal info etc.  and mentioned he used to be (15yrs ago) a real estate agent and was just trying to help a friend out by brokering the properties.  

Property I'm interested in:

4 unit

Great location

All 1bd/1ba with a large dining room that could easily be converted to second bedroom leaving plenty of common space.

3 of the 4 units are currently rented at $550. Could easily go up to $600 or add a bedroom and get $750 ea. Freshly remodeled, new HVAC, new flooring, semi new water heaters etc.

1 of the 4 units is still gutted.  Most all supplies are in the apartment to put it back together but it's still a mess.

1 unit has a roof leak that was improperly fixed (still leaks) and hasn't been messed with since.

Tax are 3000 annually

Insurance around 1200 or less

His asking price is 165,000 would seller finance with 10% down.

I offered 140,000 with him carry the note with 20k down on a 2yr balloon at 5% interest.

His "Realtor" said he spike with the guy and he wouldn't do any less then 165k. I said if he changes his mind let me know.

It's been several months now and I haven't heard from the "realtor". I drive by the property regularly to see if anything is going on and I also check the assessor's office regularly to see if it has sold.  It has not.

Should I contact the owner directly with out the middle man?  I have his mailing address etc. from the assessors records.  I am beginning to wonder if the middle man even made mention of my offer and thinks he knows the market will bring the asking price.

All comments appreciated.

@Evan Steadman

Search for the county assessors office to find out what they paid for it and the actual taxes. 

As for occupancy it has had to have been empty at some point in time, so that would feel to me like he's already sugar coating it.

You can ask for copies of all the leases to see what they say about change of ownership and their rent.  Also, what appliances/utilities etc. your responsible for.

You could also discuss seller financing with him as I've had success in the Huntington area with it.

Hello,

I've been investing in the Huntington area and I'm feel as though I'm doing well with it.

@Franklin Buckner

Where are you considering investing?

@Aliasgar Baldiwala

I hobestly do not know the answer to that.  I'm sure you make more on the larger cabins etc

 But I'm not sure if your actual rate of return goes up.  I personally have been looking into the 1bd units with a loft 1000-1300sqft.

I have been looking into purchasing in tha Gatlinburg/Pigeon Forge area aswell.  I have spoken to a great Realtor and PM.  They had no problems getting me docs from CPA's on properties that we're currently on the market etc.  From what I've looked at location and luxury makes the biggest difference in the cash flow.

Hey!  Believe your the only other one on here from the Ashland area.

Congrats on getting started.

@Amaf J.

I'm confused...

What is all 4 units current gross??? I am asking if you factored in that 1 of the 4 units will not have rent coming in at all. If the 49k represents gross income on 3 units minus the 6% vacancy. Then your covered.

Is your yearly gross income adjusted for the loss of rent on 1 apt?  

Your insurance will also go up if your going to insure any of your personal things kept their.  Also atleast in my area your taxes may drop if your living in 1 unit aswell.

Just food for thought.

Hey Matt,

I'm from the ashland area and just getting started as well. I've bought 1 3unit, 1 2unit, and 1 SFR all with in the last year. The first deal made me quite literally sick to my stomach, but the last one was much easier as I became more comfortable with.

I personally used my savings for the downpayment on my first property.  After that I started saving the cash flow and using the equity left in the property to continue to expand.  I am now in the process of purchasing a 4unit using nothing out of my own pocket and still cash flowing well.  

I also figured out early to start with the smaller community banks.  Not the larger national banks, as they have much more strict guidelines.

Good luck and happy hunting!