All Forum Posts by: Garrett Crain

Hello,

I am looking at a subto purchase in Oklahoma. The seller is a veteran and qualifies for a full property tax exemption. Her mortgage statement is escrowed, this escrow pays the insurance only since she is exempt from paying property taxes. If I take over this loan through a subto purchase, does the tax exemption remain in place or would I have to start paying taxes? If the latter is the case, someone clearly would know that a transaction occurred and either escrow taxes in or make me start paying them. Does that mean I would be at a higher risk of the loan being called since the bank would know a transaction happened?

Thank you

Hello,

I have a large value add apartment complex under contract. It's actually an old senior care facility currently. I am wondering if/where I am allowed to post this info on BP?

Thanks

@Ryan Mainwaring

The rentals, yes. We have property management experience and have really great contractors and handymen. The CFD's aren't managed since it is their home.

@Ryan Mainwaring

Thank you sir. 8 of those are B class neighborhoods. 1 flip and 1 CFD are in A class areas.

@AJ P.

Thank you

@AJ P.

Current portfolio is 10 properties, all Single Family Homes. We have utilized Contract for Deed for 6 of those properties. 2 rentals (putting another under contract tomorrow) and starting to accrue more of these for wealth. Two flip homes that both close this month.

Average loan amount is somewhere around $125,000.

@Mia Duncan

Hi Mia. My partners and I started with $105,000 and closed on our first property on March 23, 2020. We are in the OKC market which allows our dollar to go very far. There has been some great advice so far and lots of options, maybe too many!

We utilized the BRRRR method to build over $4,000/month in net cash flow and almost $200,000 in equity in that year. Although, the BRRR method might not be entirely feasible if you are remote. We work with the contractors and manage the rehabs in person.

I know there are great opportunities to build cash flow for Out of State investors through making minimum down payments. I think as long as you go with either of those, you’ll be just fine and build a nice portfolio.

Hello,

I am a real estate investor from Oklahoma City, Oklahoma. We flip properties, build a rental portfolio but also do Contract for Deed properties.

I know there are some that build a rental portfolio to sell to an investor or several investors in a package deal. The seller is providing the service of finding the homes, obtaining the homes, rehabbing and potentially placing the tenant. They then sell the cash flowing/appreciating assets to another investor.

For those unfamiliar with Contract for Deed, it is essentially Seller Financing. A property is bought for cash, rehabbed, refinanced and sold. The “buyer” pays a down payment and will pay the property off over 20-30 years through monthly payments. It’s very similar to the Rent to Own model. Unlike rental properties, there is virtually zero liabilities in regards to damages and virtually zero worry about vacancy.

I say virtually because there is always a chance something happens.

This is where my question lies. There is obviously a value in a package of cash flowing rentals.

- Is there also a market to sell cash flowing contract for deed properties?

- How would you place a value on these properties you are wanting to sell?

- How would you place a value on these properties if you were offered a similar package as an investment?

Thank you

Thanks @Michael Noto, that is what I assumed as well. It is common in Oil and Gas (my background) to give earnest to the seller/leaseholder. I will make sure the seller knows I am uncomfortable with doing this and will do my best to change his mind and have us proceed with the deal as planned.

Hello all,

I am looking for some advice.

My wife and I are in the process of purchasing an off market property for our personal home. We are getting a good deal, but it needs A LOT of work. It is everything we want now and for the future.

We have been pre approved for the loan we need. We will have to put 10% down to hold in a CD during the rehab process. The loan will cover purchase price and rehab costs. It is a 12 month loan with interest only payments. We are going to do as much of the work ourselves that we can to save on labor costs. Once rehab is completed, the loan will be converted into a mortgage.

The seller is asking for $10,000 in earnest money for signing. Which is fine, but he wants it given to him and not the title company. I have several problems with that.

1) I am not comfortable giving the earnest money to anyone except the title company. I am very familiar with earnest money but have never given to the individual. Am I out of line or has anyone done this?

2) The earnest money was going to be applied towards the 10% that goes to the CD. If this $10,000 is given to the seller, it now increases how much we will have to put down by another 25%. I know earnest is taken from purchase price but in this case it would go to seller and not the bank. Therefore, we have already put $10,000 down but will have to give 10% of the loan amount to the bank.

My thoughts are to tell him I am not comfortable with giving the check to anyone but the title company. What are some of your thoughts? Has anyone given earnest money to the seller directly without any title work being completed?