All Forum Posts by: Michael D.

Has anyone successfully structured lender financing AND seller financing together?

The situation I'm currently dealing with is something along the lines of the following:
i.e. the deal is 1MM, the seller finances 50%, lender finances up to 80% LTV.
I'd like to take advantage of the additional 30% the lender is giving to make repairs, have a buffer, etc...
But I'm assuming once the lender knows there's owner financing they won't finance 80% LTV anymore but less  (or just the 50%).
Things get tricky with 1st lien and 2nd lien holders I'd imagine.

Has anyone run into something like this? If so how did you structure it/make it work?

TIA!

Have a read on this article here and give me your thoughts, I myself am going to have to re-read it again to fully understand what it entails and how it fully impacts us, were it to get pushed through.

https://www.fool.com/millionac...

Excerpt of the article:

Talk over the second round of stimulus is underway with three proposed policies on the table at the present time, one of which would have a big impact on homeowners, tenants, landlords, and real estate investors everywhere: The Rent and Mortgage Cancellation Act of 2020.

This bill, sponsored by Representative Ilhan Omar, D-M.N., would eliminate rental and mortgage payments on any primary residence for the duration of the national emergency, allowing landlords and lenders to recoup losses by applying to a relief fund, but there are stipulations.

Let's look at what the act proposes and how it would work and see how it would affect real estate investors.

The $1000 deal is on his limitless website, links are in his youtube descriptions.

I've been watching some of his video's too and it does seem interesting and makes a lot of sense.

For me, there are still some gaps on how to deal with certain things, but that's mainly because I'm still a rookie.

The $1000 doesn't seem too much if you factor in that you need to hire an attorney and have him create an iron-clad lease agreement that references the option agreement. Sure you could look around and find something online, but again, being a rookie, is it going to be the right document. I need a certain amount of hand-holding and coaching and think there's definitely some value here.

Hey folks,

I'm getting severely irritated with my current property management company.

So far before I closed on the property they had to evict a tenant because they wouldn't cooperate with the inspection.

After we closed we immediately had to evict the tenant that replaced the tenant we evicted before that.

So to me it looks as if their screening process isn't pointing in the right direction.

Since the eviction I've left the property empty (1month so far) this month they charged me 10% for transferring the deposit to me. Though they didn't transfer the balance to me they are keeping it as a property reserve, which they did notify me of last month.

When I asked them about why they charged me 10% their answer was:

"Up until this point that money was not your money, it was the tenants money. Now it has been collected on your behalf. Anytime we collect money on your behalf we charge a 10% fee"

While I agree with the statement it wasn't my money, is a 10% fee here really justified here while technically the money wasn't even transferred into my account (even if it was transferred I still don't agree with it)?

At this rate they're eating up the bottom line and it doesn't make sense to keep them as a property management company.

So now that I've ended my rant I come to my question, how do you manage your property from afar? I've been exploring the options of cozy.co and askminka.com for payment and showing services.

Which services do you use to collect payment and show the property when you're not in the local area?

I'm keeping certain aspects vague since the PM is also on BP.

Thanks in advance!
Michael

Just listened to podcast #17 I'd like to hear what @Jeff Brown thinks about it

Hey @Henry J. it's not a BRRR, the duplex is in a different state. And you're correct SFH are 20% down. My loan officer said because it's a duplex it's 25%. That deal hasn't gone through yet, an issue came up with one of the tenants. They didn't want to cooperate with the inspection to the seller is starting an eviction on them.

@Bryan Drury the duplex will provide about 20%, so not even close to 50%

@Franklin Romine thanks that's a good tip actually.

@Henry J. That's exactly what freaks me out about the loan too. If I were to lose my job I would need to repay the loan(s) after x amount of days. If I'm carrying 5 loans that's would be terrible, hence why I'm asking for advice moving forward :)
I can determine the repay time on the loan myself 12, 24, 36, 48 or 60 month's at 4.50% interest.

Henry you mentioned if I have PMI? I was under the impression that a minimum of 25% down was necessary for investment properties. (I also heard a rumor that 25% would drop to 15% sometime in March)
If it's possible to put less down, I'd gladly hear more about it.

@Larry H. that's exactly how I feel right now, I have some cash saved up and a decent amount that I can loan to put towards a down payment on a duplex. 

@Roy Oliphant while yes I can take loans out of my 401K (after recalculation it's more around 33% what I can loan) there's got to be a limit to that. It's more of a liability than an asset when taking out a loan. I'd rather have the cash up front vs. paying off a loan to myself.
I work for a big tech company, so switching jobs is not likely to happen in the foreseeable future, thus ruling out the rollover.

Hi everyone,

I need some advice moving forward (yes I understand you're not a financial adviser)

I have great 401K benefits through my employer they'll match up to 50% of whatever I contribute and vesting is immediate.
i.e. I contribute 18K they add 9K, which is what I'm currently contributing, this is a new rule since 2016 (previously it was 50% up to 6% like other companies).

Obviously this is a tremendous benefit which I'd like to keep using, but I feel I can put that money to better use as a down payment on a sfh/2-4 plex/etc..

I've been in contact with the broker that manages the 401K and I've asked;
1. Can I roll over my current 401K into an IRA while I still work for the company?
=> No, not allowed.
2. Is there some form of self direct method that I can use with my 401K?
=> Yes, via brokerage link. But investing is only allowed in stock market securities, not Real estate.
3. What other options do I have to invest in real estate?
=> You can take a loan out on the 401K, max amount able to lend is 45% of your 401K

What would you advise me to do? I understand that having a diverse portfolio is key but maxing out my 401K does chop into the amount of cash that I can save each month for a down payment.

Thanks in advance!
Michael

inspiring, I'm closing on my first rental (duplex) in 30 days.

I'm struggling with funding on future projects, I know networking is key. I have yet to attend a REIA though.

I'm curious how you got things all done if you mind sharing?