All Forum Posts by: Han Oh

@Andrea Castor @Ryan Provost @Darrin Carey

Thanks for the feedback. So, overall I'm hearing that this duplex may likely be situated in a "D" area with possibly higher vacancy/turnover rate and low quality tenants compared to other areas in Dayton. Do any of you own or know anyone who owns rentals in close proximity to this area?

This will be my first out of state rental purchase and I'm nervous about pulling the trigger based on what has been said in this post. Having said that, here's what I'm thinking I will base my decision on:

1. Review tenants' information such as background and credit report, any criminal history, previous landlord contacts, payment history for current lease, job and gross annual income information.

2. Call previous landlords and ask about them. Talk to neighbors and landlords in the area.

3. Review current lease agreement, specifically the agreed monthly rent amount, what is included in the rent, lease term, renewal terms, deposit, default clauses, and move in/out inspection agreement.

4. Interview and find a good PM who knows the area well and has clients with rentals there.

5. I will be flying out there to personally check the property and the surroundings. I will be talking to the owner and the tenants, as well as neighbors. Am even thinking about going to the local police/sheriff station to get information about recent crimes in the area.

If all of the above check out to be satisfactory, then I'm willing to pull the trigger.

What do you all think?

Thanks!

It's on Nathaniel St close to the NW Connector

Actually the duplex is in Trotwood but looks as if it's bordering Drexel. Is anyone familiar with that area?

I became suddenly interested in acquiring a turn-key rental property in the Dayton, OH area after coming across a seemingly attractive offer (at least to me). I should disclose that I have not been looking into any rentals until now since I was rather focused on finding deals to wholesale or flip locally in Southern California. Also I am not familiar at all with Dayton, OH or its suburbs. But I figured that I could use the cash flow generated from the rental to continue financing my marketing to alleviate the burden on our finances. 

The property is a 1600+ sq.ft., 2 unit, 2bd/1ba each, located in the Trotwood area of zip code 45417. It has been recently renovated by the owner. I looked at several pictures and they all looked pretty good. Tenants are already in place in both units and the combined gross rent income is $1300/mo. Taxes, insurance, PM and part of the utilities total approx. $340/mo. So, monthly cash flow would be about $960. I'm thinking I should side aside about $300 for maintenance & reserves, and vacancy and collection loss. So that puts it at $660 net monthly cash flow after everything that I can think of is deducted.

The property is being offered to me for $44000. I've asked and gotten answers to several questions that I had regarding the property, tenants and the area. My main question is, given the monthly gross rent income and the purchase price, is this a good deal? I know the answer may depend on a lot of factors such as vacancy rate, safety of the neighborhood, tenant background and credit, etc, etc, but assuming that all of that is satisfactory, is this a deal that I should take?

Thanks all for the help!

Yes, I'll probably have to JV with a more experienced person on this one or at least get close guidance to make this work. I certainly don't want my money tied up for a long time with very little or even negative return. Appreciate your inputs!

@Dion DePaoli

You confused me now. AFAIK and from what others have commented here, CA is a non judicial state so there is no right of redemption period post sale. The only post-sale right of redemption periods that I know apply are the HOA and tax liens.

Having said that, when you say "A California foreclosure which seeks a deficiency through a judicial process has a redemption period post sale of 12 months," is my case in any way related to this statement because a BK court is involved? 

@Joshua Andrews

Thank you for the detailed answers. Question: If I buy the 2nd, any legal fees or other expenses that I incur can be rolled in into the minimum bid amount so that I can recover all the expenses right?

@Chet Mazur

What do you mean by "I have not seen the 2nd spin new rules. You may end-up being a 2nd for ever"? Do you mean that because of the BK if I'm not able to get a release from the court I run a risk of being in deadlock without being able to do anything as a junior lender?

@Wayne Brooks

My intention (and hope) is that nobody bids at the auction and I become the foreclosing beneficiary. If I get bid out, I'll just take the small discount I paid as my profit, but I'm shooting for that other possibility. I have nothing to lose in that case except that my return on money would not be as attractive. Do many people bid on junior liens (in this case it's the 2nd) even if there was equity? 

@David Dachtera

Yes I'm aware that if I buy the 2nd and take back possession of the property I'm taking it subject to the 1st. I'm willing to reinstate the 1st if it's in arrears and keep it current until I sell the property or decide to rent it out.

@Jeff B. 

In this case the 2nd is foreclosing, not the 1st. I pulled title docs and did a bit of research to make sure there is no NOD or NTS pending on the 1st, else there is no point in buying the 2nd lest I get wiped off by the 1st. One of the contingencies on my offer to the 2nd lender is to verify the balance and status of any senior loans.