All Forum Posts by: Matt T.

Welcome aboard Sean. There are a few of us from the CB/Omaha area on here. It's great to see another local posting.

I'd take that deal. Nice work. Do you plan to hold these properties for an extended period of time or sell them off? My only concern would be having all properties on one note. Will the bank give you a release amount for each property? Not sure of the terminology, but essentially, let you sell of one or more of them individually if $x is applied to the loan from the sale.

Yes, I could sell that property for 66k right now. I actually think the appraisal came in too low. I wish I could say that was a typical deal or that I had a portfolio full of these...I don't.

I completely respect your formula and your business model. My plan (and market) is a little different. By the way, I took the 19k "extra" and bought the house next door for 18k. It's free and clear with a tenant moving in at the end of the month. :D

Having 100% of your money out doesn't necessarily mean you are 100% leveraged. Example: I purchased a 3/1 at $16,500 with 10k in rehab. Six months later I refinanced at 45k on a 30 year note with 5% fixed rate. Appraisal came in at 66k. So, I'm "100% cashed out" but only leveraged at 68% of current value. Overall I agree with your assessment, 100% leverage would be a very dangerous game.

Most of my buy and holds are 2/1. Anything bigger and in a decent neighborhood I usually look to flip. I'd love to have a bunch of 3/2 rentals but the higher purchase prices in my area don't fit my current plan.

Welcome to BP Giovanni. This has been a touchy topic in the past. A cash offer means you actually have the cash on hand to make the purchase. Private money financing is just that, financing. Banks and experienced listing agents will definitely know the difference. They are going to want to see a bank statement or letter from your bank showing the money is sitting there in your account.

What's your intention for the property? Buy and hold, flip or something else? Private money can be expensive; it would be best to have an exit strategy.

Good to have someone on here currently active in Vegas; not many posters since the market turned. I've been researching the Vegas area for a couple years and plan on moving down your way next summer. Welcome aboard.

That would not fly in my area. I'd imagine CA is far more tenant friendly than where I am so I'd be surprised if it was ok there. I do have a clause in my lease that says, "tenant, tenant's family and guests shall not make or permit any loud or improper noises, or otherwise disturb neighboring residences." I would give them a written notice of their violation and inform them of my intent to evict if it happens again. Again, I'm not sure of the laws in CA.

I think there is some confusion with the definition of buying a house "with $0". That doesn't mean they are giving you the house. That generally means you have $0 out of pocket initially.

An easy example would be someone that owns a property outright and agrees to sell to you on contract (they carry the financing). While you may have "$0" out of pocket initially, you will still have maintenance, payments, insurance, management fees, taxes and the list goes on. Nothing is truly free.

There are many other ways to structure creative financing and I think those are the methods to which the earlier posters were referring. There are pros and cons to all of them.

There's no shortage of REOs in my area (midwest). Nobody shows up to the Sheriff's sales because the properties are selling much lower once they are listed on the MLS. We do have an issue with a few REO Agents listing properties at unreasonably high prices. The price seems to creep down 5k every 30 days until it gets into the appropriate range and then it's quickly snatched up. I just picked up a 2/1 that was on the market for 8 months. I've only been in a multiple bid / highest and best situation once this year. My offer was accepted and it was still 15% under list price.