All Forum Posts by: Lance Johnson

Do these errors appear on reports from all three major reporting bureaus? Especially for the delinquency notice, that was reported by someone, and there will be a record of that so you can follow-up with the reporter first.

There are formal dispute policies for credit reports that contain errors. You can file most of them online.

You might want to consider listening to BP Podcast Episode 70. They discuss Dodd Frank there.

http://www.biggerpockets.com/show70

Even if Dodd Frank does require that you qualify the buyer (which it may not if you're doing small, infrequent financing deals, like it sounds you are), if you don't want too much risk, I'd strongly advise that you not through all the qualification guidelines out the window.

Good luck - I'd be interested to know what happens with this deal if you can get it done.

@Chas Phillips - Welcome to the community! There are lots of great people here.

It depends on what you want to make of the relationship. Did you discuss any particular action items? Were there unanswered questions that need some research? A proper follow-up could be as simple as an e-mail thanking him for the discussion and suggesting that you meet-up again over coffee at some point to discuss real estate.

Lot size can certainly impact value, but the answer to the question about what that impact is, as always, is it depends. In many areas, land values are quite low, so the real deal is value over land. Depending on where this property is, it might be hard to get any land comps, as there might not be much and for sale in the area, but I would recommend getting an opinion from a builder on the cost to build the house from the ground up (as if it were just about to be built on a new piece of land). If the cost to rebuild is higher than the ARV, buying for land is probably not a good investment, as you would be better off just doing a new existing construction deal.

The other side of this issue, of course, is whether or not you can divide the land into two separate parcels. You will need to do some legwork and check with the county to determine what is possible there. There may be density controls or other legal issues in play that would make subdivision difficult or too costly.

Good luck!

Thanks for sharing, @Ana Nomys - the full report is worth checking out, too:

https://mi.archcapgroup.com/Portals/1/Documents/hammr/ArchMI_HaMMR_Summer2014.pdf 

Even "below market" $450k is a significant amount for a single family (this is single family, right?), especially if you expect to put less than 20% down. Between mortgage, taxes, insurance, vacancy, and maintenance, it would seem difficult to achieve positive cash flow. If you expect excellent appreciation, perhaps it might be a reasonable decision. I strongly advise that you build out a complete and sound financial model before doing any deal.

To answer your specific questions:

It is impossible to say based on only the provided information whether you would qualify. You certainly might qualify – nothing you have stated would specifically exclude you. You are "allowed" at least 4 (maybe more) mortgages in your own name, though you would have to qualify for each; they aren't just an entitlement.

Investment loans almost always have a higher interest rate. The rate depends on the risk profile and the specific market. I was being quoted a rate of 4.5% on a duplex recently in northern Utah.

Conventional loans for investment properties usually require no less than 20% down - sometimes even up to 30% might be required depending on the property. The 4.5% rate that I cited above was based on a 30% down payment. We couldn't secure reasonable financing for less than that down payment amount.

I hope this helps!

Lance

Even "below market" $450k is a significant amount for a single family (this is single family, right?), especially if you expect to put less than 20% down. Between mortgage, taxes, insurance, vacancy, and maintenance, it would seem difficult to achieve positive cash flow. If you expect excellent appreciation, perhaps it might be a reasonable decision. I strongly advise that you build out a complete and sound financial model before doing any deal.

To answer your specific questions:

It is impossible to say based on only the provided information whether you would qualify. You certainly might qualify – nothing you have stated would specifically exclude you. You are "allowed" at least 4 (maybe more) mortgages in your own name, though you would have to qualify for each; they aren't just an entitlement.

Investment loans almost always have a higher interest rate. The rate depends on the risk profile and the specific market. I was being quoted a rate of 4.5% on a duplex recently in northern Utah.

Conventional loans for investment properties usually require no less than 20% down - sometimes even up to 30% might be required depending on the property. The 4.5% rate that I cited above was based on a 30% down payment. We couldn't secure reasonable financing for less than that down payment amount.

I hope this helps!

Lance

In general you need permission to pull someone's credit. If they have granted that permission and such permission follows the note, you may be fine.

Unfortunately, this is one of those issues that is best answered by a legal professional, and I am not one.

It depends on the market and the risk profile as to the rates you will get. For my California properties, I use AAA as they are the best rate. In Missouri, I actually found State Farm to be one of the best options.

If you have access to the USAA Insurance products, though, you almost certainly won't be able to find a better deal. I don't qualify so I can't say from my own personal experience, but a few of my military vet friends use and swear by USAA insurance products.