All Forum Posts by: Hattie Dizmond

I'm with curt on this one. There just isn't enough margin with the numbers you've laid out. If your goal is a buy and hold AND it is in move in condition, then it might make sense at what he owes or a couple thousand over that, if he needs money for the move. You could consider a Subject To deal and use his existing finance, regardless what your exit strategy is. Also, I don't know that I've ever met someone who wants to get put of town quickly that didn't have some serious motivation. Listen to Show 77 with Mike Quarles for some amazing negotiation tactics, before you go meet with the seller. Good luck!!

Originally posted by @Pat Healey:

Thank you Hattie! Since you are local to me, do you know of any local REI meetings in our area?

DFWREIA is a good option, particularly since you're in Burleson.  They meet at the Woodhaven Country Club, just off of 820 & I-30.  They are very active and have a meeting every Saturday morning.  I've made some good contacts there, as there are some very active investors (wholesalers, cash buyers, flippers, buy & hold, etc.) who attend.  Plus, Robin Carriger, who is one of the leaders, has a program that interfaces with the Tarrant County Appraisal District to generate leads for direct mail.  I do the same thing, but in Dallas County. 

They do get a little "pitch heavy" on some of the paid trainings, but that part is pretty short and the networking alone is worth filtering it out.  Also, they offer a deal review where you can present a current deal and get opinions from the other investors in the room.

Awesome!! I'm right there with you on the $300 vs. $700 with $20k down. Your NPV is much better with the smaller cash flow and leveraging the $20k for other opportunities. Good job. Very instructional.

Welcome to BP. You've obviously done well already. Congrats. Just a thought, particularly since you have a track record already, why not look at working with a portfolio lender who won't limit the number of properties you can hold? I'm not affiliated in any way, so this isn't an ad, but there are a couple of lenders in my REIA who focus on investors and their portfolios. Just a thought.

Don Whitmire welcome to BP.

The model I've set up uses a target ROI of 20% with an NPV of at least 12%.

@Ashley Pittman 

Dawn is correct.  The 4 applies to insured mortgages.  Find a small, local portfolio lender, whether it's a bank/CU or a brokerage service.  They have much more leeway in their underwriting process, which means they can consider your rental income, regardless of the length of time you have held the property.  They can & often will also consider the strength of the deal, the amount of equity that will be in the property and the current market conditions. 

My personal recommendation is, if you haven't already, get involved in one of your local REIA's. Find out who the cash buyers & landlords are and ask them for recommendations on portfolio lenders.

@Brandon Shipe If you have signed leases with the folks who are renting the rooms from you and decent credit, I would recommend talking to a smallish, local, portfolio lender.  A credit union would be a good choice. They have a lot more leeway in their underwriting decisions.  The big banks, particularly the ones - like Chase, City & BofA - that got hammered in the mortgage crisis and the subsequent lawsuits, are not good options for anything other than the most standard and traditional of circumstances for mortgage lending.

@Pat Healey 

The 70% rule is a "rule of thumb". I use it as a guideline to kind of help me do a quick and dirty "is there any chance this deal will work" analysis. In the end, I make my final determination based upon ROI. The real cash buyers I've talked to have a target ROI and a minimum profit they are looking to achieve. After visiting with some of these folks, I've set 20% ROI as my goal for evaluating a deal.

As for finding deals that work, regardless of what your criteria is, the DFW market is such as strong seller's market right now that it's unlikely you're going to find anything, unless it's off market or an REO/HUD property, particularly if you're talking about areas people actually want to live in. There's so little inventory regular retail buyers are buying houses that need work, because it's all they can find. Marketing is the key, and based upon everything I've heard and everyone I've talked to, you really need to focus on an area and "farm" that area.

@Jeff Arndt 

Perhaps the issue isn't that you moved too quickly.  Perhaps the issue is that you need to diversify your investment strategies.  Why not look at Wholesale or Flip deals to build some capital for your next buy & hold?  Your cash flow alone is not enough to fund your continued acquisition of buy & hold properties.  You're either going to have to look at a strategy that generates returns more quickly, like Wholesale or Flip, or you're going to have to find better deals, where you get into the properties with built in equity that you could then pull out to fund either the rehab or your next purchase.

Hattie