All Forum Posts by: Darrell Lee

What is the sale price?

Downpayment?

Why a hard money lender vs conventional?

Your credit score and income?

Income/expenses of the property?

Maybe you can qualify for a conventional loan? I guess you've already been turned down by them?

I used to own a mortgage company and have originated thousands of loans. But, I'll admit I've been retired for over 15 years and just getting back into the market this year. Without a steady income I cannot get loans though I have mid six figures in the bank so I have to pay cash.

The investor lenders I know need at least a 35% cash down. But their rates are sky high so I'd just rather pay cash.

Any lender will require your ID and SS#. If you refuse to provide that info, a lender would have to be morons to fund the loan.

You don't provide enough detail on the transaction for me to render help.

I doubt you will be able to get a loan with your conditions.

Welcome @Michael 

I'm a So Calif guy moving to Springfield Vt... I have looked at properties up in your neck of the woods, but trying to keep my properties as close together as possible in Vt and Nh...

Welcome Brenda,

Vermont is about the worst state for a house flipper as they have the Vermont Land Gains Tax which I've not found in any other state thus far. My Vermont investment strategy is the BRRR (Buy-Renovate-Rent-Refi) as the tax reduces the longer you hold.

This year I've been investing in Springfield and Bellows Falls, Vermont as well as looking in NH. I'm very interested in NH as they no state income tax and no sales tax but Bellows Falls is right near the border. I find no shortage of REO properties but a majority need work and are not financeable so you need to pay cash.

I buy super fixers cheap and pay cash and my challenge is cost containment in the renovations to keep the projects on budget as every dollar saved is a dollar earned. I was frantically trying to buy lots of properties and close them in May so that I could file tax grievances and get the property taxes lowered. I just got one lowered by $60k saving me $1700/yr and another one is being reassessed by the Town Listers now which I'm hoping will get lowered by a whopping $125k or a 70% tax reduction. Lower taxes = lower holding costs and increased home value when it is time to sell. Apparently most homeowners are unaware they have a right to request a grievance and get their taxes lowered. This is also done in NH, NY and I'm sure many other states. The filing deadline for this year has passed, so homeowners and investors will have to wait 'til next year to file. REO's usally don't close on time, so 2 REO deals of mine have been extended and extended... but only one needed taxes lowered but it was a NH steal paying $17k with an "as is" value $45-50k so I'm willing to wait and miss the tax grievance deadline.

Vermont is also expensive closing costs as lawyers handle the closings and not escrow companies. But being from California, not knowing the quirky state laws, I've gotten my money's worth in legal advice from my closing lawyer and his team. I was having problems with a REO seller (BofA), they kept threatening cancellation, my broker and I were getting nowhere and finally, I sent in my lawyer and poof!!! The problems and hassles went away...

Good luck with your investing!

Darrell

www.DALadvisors.com

I recently closed two deals where I paid the sellers a net amount and I paid all the back taxes and closing costs.

My question is, can the property taxes as well as the closing costs be expense'd at year of closing to offset taxable income? Or can I choose to add the costs to increase my basis?

Congrats! 

I too have begun recently investing in Vermont with 3 properties to start. A 10k s.f. commercial building, a 4k s.f. 6br/4ba run down mansion and a 3br/1.5ba house to move into while overseeing the renovations.

Not sure what a hobby house is... but, I've mostly bought at the absolute bottom of the market so my opinion is that my investments cannot go any lower regardless of rates. Plus since I have no loans, all properties will have a positive cash flow.

Absolute bottom? I've paid less than $5/s.f. for the 2 investments and my residence 50% below market beating out a 10 multiple offers bidding war.

I look for bargain properties that I can change the use to enhance value, along with great metrics.

There's still lots of bargains in Vermont and New Hampshire... I'm trying to find a nice house in NH because they have no sales tax and no state income tax.

@Michael Modesto Still waiting to close. Only price quote was the title ins of $100

Auction.com called me up to market some properties to me and they'e assigned me a VIP acct exec and bumped up my status to VIP so now I don't have to place a deposit on each property I'm bidding on. Just one deposit for an entire sector of states such as the NE properties or SE states group. Very useful as I might only win 1 out of 10 or 20 properties that I'll bid on.

In California, we used escrow companies and rarely used lawyers. I've been acquiring REO properties in New England and they use lawyers. I've enjoyed using the lawyers as their legal advise has helped me on a couple transactions. One deal, the seller, Bank of America kept hassling me and appeared to want to back out of the deal.... exasperated, I had my lawyer intervene with the sellers broker and got the deal back on track.

I think the bank wanted to accept a higher offer as there were 10 offers on it and mine was not the highest offer, but it might have been the only cash offer. I was offered $15k by one of the losing buyers to let them take over the deal as I have an assignee clause in my offer. But that house I need to move into so can't wholesale it. Besides, It's worth $60k more before I even close the deal...

The lawyers cost more than escrow companies, but when the S@#T hits the fan, if you have a good lawyer... they can save your deal or whatever you want with the deal.

Goals... Buy low, sell high. Not a flipper. Buying to fix up to add value, then rent and hold. However, I will be flipping a few properties so as to generate some taxable income so that I can qualify for loans as I have to pay cash for all the properties right now.

Each SFH I buy, I want to be able to be able to sell it for at least a $40k profit should I decide to sell it, otherwise to rent it I want at least a 20% cash on cash yield.

I want to hold for at least 2-3 years as I think the NE states values are way undervalued at the moment. Vermont has a few peculiar laws but they are workable.