All Forum Posts by: James De Silva

Hi All,

I've been in the states for about 3 years now, but have only really built up about a year and a half worth of credit. My credit score itself is excellent, and everything else, job history, income, reserves etc are A+, but because the history is so limited, the underwriters are unwilling to book my refinance loan at the moment.

I understand that if I was asking for a loan for a conventional owner occupier it's easier, but apparently they are more picky with investment properties.

Short of waiting for another year or two to build up some history, what are my options? 

I've come across some interesting small multi-families on loopnet, but you can get that for the free access too. And a good realtor should be able to find that information. It's just another source of information if you're a smaller investor, but if you want to focus your time, I'm not convinced it's all that useful.

@Joe Villeneuve I like what you're suggesting here. Make an offer on the property to see if it's financially worthwhile, if the seller accepts this, then go check it out to see if it's actually worth the effort. If it isn't then don't even put the EMD forward.

Do you put forward an full purchase agreement (that's basically the same per property) or do you just put forward statements of intent?

I've been walking around a lot with real estate agents of late, and I always go look at properties that I'm genuinely interested in buying. However, I don't always make offers (and for those I do make offers on, I don't always get accepted). I feel a little bad getting my realtor to organize getting me into all those properties without actually buying any.

Generally, for those who have many rentals or flips, how many do you tend to look through before buying? Which extends out to the general question of, how many properties do you look at in an area before you feel comfortable with knowing the general state of an area.

Had a family member go through this, and I know it's pretty ugly. What the other posters said above. Go get yourself an lawyer, take a week out to get yourself together and then you can work out the financials. 

Also it can't hurt to learn up about some of the law in this area yourself, so you can help your lawyer, especially if your lawyer gets divorce law, but has only dealt with splitting up the family home and not secondary properties.

Sorry to hear about it man.

Welcome to BP @Brian V. I'm in Berkley up the road from you. Good luck out there. See you at some of the REIAs hopefully. I've got to the Troy one above so I might see you there. The A2 REIC is pretty awesome too. They have a running educational series throughout the year which I love going to. Hit up @Joe Villeneuve for details.

The city of detroit has a lot of interesting potential, but I'd be very wary as a new investor.

You'll have more trouble with tenants, insurance, property managers and to top it off, most lenders will not lend in the area. Obviously there is definitely money to be made, I think Detroit is poised on the brink of a huge comeback, but maybe start with something less full on. The suburbs around Detroit is where I'm interested at the moment.

Don't forget association fees if you buy a condo/apartment...

@Jon W. Yep, it's actually in reasonable shape for a foreclosure, but it also has enough work to be an interesting rehab exercise for a new comer. To be fair, this is my main reason for being interested. As a newcomer to REI, I want to get the experience in doing some rehab work without getting bogged in something dire. So don't buy it from me ahaha (just kidding). The key thing is not to pick something that's a money losing enterprise.

@Aaron Montague I've asked for the seller to carry the closing costs. By the way, many thanks for the transfer tax calculator! :) And you're right about going to Home Depot, I think I will do that too.

And yes the ROI is a bit misleading. That ROI number is the number I see other some other investors/turnkey providers use. (aka Rent minus taxes and insurance), so I can compare with other people's idea of a good deal. Your 7% figure is the more realistic one that I also pay attention to for other actual calculations.

@Scott K. The 2nd bedroom or bathroom? The master bedroom is on the bottom floor, 3 other bedrooms upstairs, plus a 2nd full (if tiny) bathroom.

A few extras: (assuming buying in cash... financing would give me the cash on cash value)

• Purchase price (Once off) $87,000.00
• Repairs* $20,000.00
• Total Property Cost $107,000.00
• Closing costs $795.00

• Rent (Monthly) $1,400.00
• Less vacancy & collection loss $70.00
• Gross Income $1,330.00

• Operating expenses
• Property taxes $300.00
• Maintenance $145.00
• Insurance $50.00
• Management $140.00
• Total Operating Expenses $635.00

• Net Operating Income (Gross Income - Total Operating Expenses) $695.00

• Total Cashflow (NOI - Mortgage Interest) $695.00
• ROI 11.69%