All Forum Posts by: Greg Zimdahl

Thanks everyone! I appreciate the feedback! Thank you very much!

Could anyone recommend a good CPA with a focus on rentals in the Milwaukee area. I am looking for someone who is good at giving advice rather than just taking my paperwork and doing my taxes without working with me. 

Thank you very much!

 Did auto correct change some words or could you elaborate on this, I don't understand. 

Am I missing something? Am I way off? 

Hi BP,

Looking at a seller with no or a slightly negative equity position my research leads me to believe that a "subject to" deal is my best option. Considering the house is in good condition and no major repairs needed. I am under the assumption that my exit strategy would be a 1 to 2 year "lease to own" with my new tenant buyer. Say ARV (though I am assuming I am not putting any money in / pretty house) is 120K seller owes 125K. Seller just wants out and will literally give me to make their frustration go away.

I'm lead to believe I can charge an "option fee" to my tenant buyer say 15K. Catch a slight spread on the mortgage say $200 a month. Finally when my tenant buyer has his/her financial life in order a year or two from now they will be purchasing the property slightly higher than fair market value (of course as previously agreed upon).

Sounds great other than I am fuzzy as to how my tenant buyer is really going to refi when the time comes. When they are ready to refi they will need at least another 3.5% for FHA or worse 20% traditional. However at this point, especially if we started with a slight negative equity position we will be lucky to just be positive.

So my questions are:

1. What is my exit? How can I be confident the  tenant will get this refi'd and get me out?

2. What Can be done about the negative equity position? Do I need to pay it out? 

3. What is reasonable to sell the property for to the new tenant buyer?

4. Will this situation leave my original owner left unable to qualify for a new loan as it looks like they are still paying for the first mortgage?

Am I close here or am I missing some major pieces?

Thanks in advance,

Greg Zimdahl 

First I recommend running the property thought the flipping calculator here on BP. Then I would suggest looking for upside potentials e.g. Can you add an additional bedroom in the basement or attic(assuming it has either).

If your looking for further confidence I would try to partner and split profits with an experienced investor in your market who can help you vet the deals until you become more confident. 

Best of luck to you!  

Hey Peter. I am from Milwaukee. If your interested I would like to connect with you. If your interested I would like to discuss Detroit. I have some interest in there myself. I too would like to grow rich and help people along the way also. If your interested feel free to connect with me here and we can see if we can't help each other out. 

Sincerely,

Greg.

@Rusty Glines

Just don't give up! Don't let go of that vision. I can understand being afraid of your own line of credit. Maybe you could start marketing in your town to work with a landlord that wants to get out. You might be able to find them and start talking to them. I just went today and talked to the tenants of a property to try to get the landlord's contact info. I did not get it but if the property was managed by the landlord I'm guessing it's not impossible to get that phone number. 

There is a book called "The ABCs of Real Estate Investing: The Secrets of Finding Hidden Profits Most Investors Miss (Rich Dad's Advisors)"

The book is about commercial RE investing but there was a section where the guy was talking about contacting owners. He said many times they are not ready to sell but by developing a relationship with the owner, when he/she was ready to sell he had a foot in the door.

If you're in this for the long term you might want to start reaching out to property owners. It's not likely you catch a bunch of leads today but you might open the door for seller financing options in the future. 

If you get a chance I would recommend checking out that section in the book.

Above all don't give up! I hear over and over that people made it because they just kept moving forward.

I hope you find massive success!

Greg.

I just stumbled across this article. I thought it was going to say Hard Money was bad so I felt nervous that I had just recommended Hard Money to you but it tells about the benefits. 

http://www.biggerpockets.com/renewsblog/2014/06/29/8-things-real-estate-experts-wont-tell-hard-money/