All Forum Posts by: Jehon Bendokas

@Joe Splitrock thanks for this - I’ll look into it!

@Matthew Reid , @Jonathan Hernandez - no balloon payment. I know the people who own it very well, they know I'm an investor and I know what they paid for it. The home was originally purchased 7-8 years ago for them to rent a place to their son. They purchased the home for $78K cash. Although the home is mostly updated it is what I would call a "handyman special". The materials are all lower-end consumer-grade, e.g. cheap laminate, painted panelling, etc. Their son believed that it would sell for $180K through a realtor friend of his and I broke down the costs to them. They were planning on paying their son a large lump sum of money (from the profit of the home). After I explained that after a 6% commission, cap gains on the "investment property, income tax (to be reported by the son) that it would be more economical for them to sell it to me for $150K with no realtor. They agreed. I was willing to seek conventional financing, however I asked the question, "would you be willing to finance it for me, aka act as the bank," since they owned the home free and clear, they were willing. I told them I would appreciate if they provided me a lower interest rate and they scoffed and said "we aren't going to charge you interest." 

Realistically, this is a $130K home needing help to make it rent-ready. I didn't want to low-ball, I didn't want to make them feel like I was ripping them off. Because at the end of the day - they could have sold an overpriced fixer-upper to some out of town investor who can afford smaller margins in exchange for long-term appreciation. That isn't me, yet!

The agreement is $1000/mo until the loan is paid in full - I gave them verbal assurance that I would not take 150 months to repay them, that I would be refinancing it within the first 2 years, hopefully. 

I know I had a pre-existing relationship with these folks, however, the important underlying lesson is that forming and maintaining trustworthy relationships is extremely important. I find a way to talk about real estate investing with almost every person I interact with. I want to plant that seed in their mind for when they have a property to get rid of, they can seek my guidance or assistance - whether I buy it or not. 

@Sean McDonnell - this was my first time posting a deal at the beginning of the process! 

Paying for the rehab - I just did a cash-out refi on one of my other properties that is providing me with $20K of buffer. I plan to take out a $40K American Express Personal Loan out to fund a majority of expenses. Amex provides a 0% Interest loan to active duty military members as a "thanks" - I've used it a couple times now. Repayment is 3-5 years generally. It's a fantastic product but I think their personal loans are "by invitation", so sometimes it's available, sometimes it's not.

After rehab I plan to rent out the property then cash-out refinance and pay off the seller. I am using $260K for ARV which should allow me to get most/all original debt out of the deal.

@Michael Ward fingers crossed - hoping my napkin math is accurate!

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $150,000
Cash invested: $900

FSBO, Seller-financed, 0% down, 0% interest BRRRR-to-be. Tenants will be out soon to begin the remodel. This will be my first remodel from a distance (previously I've done all my own work). Remodel budget is $40k baseline with up to $60k for contingency expenses.

Hoping to market to University of Arkansas students and hoping to rent for $1800+

@Alex Forest seal the subfloor with Kilz primer.

I’ve had human and pet waste in houses over the years. If I can’t replace the subfloor (out of practicality or economically) I will use the oil based original Kilz primer and seal it in with several coats.

Just wanted to share my experience with my first off-market and first Seller Finance success story.

I was hesitant for so long, afraid of the unknown. Looking back, I don't know what was so scary.

- I called a title company to help me with the process and they graciously referred me to an attorney they work with.

- Using an attorney for a real estate transaction and mortgage structuring has been so easy and very cost effective.

- Offering the seller more than they thought their home was worth made them willing to finance the home for 0%.

Bottom Line - 1. Don't be scared, it never hurts to ask someone if they're willing to sell. 2. I'm going to start carrying real estate contracts with me wherever I go. 

@Will Fraser & @Ryan Blackstone thank you!

Greetings - currently working a deal in Fayetteville, AR.

Looking for recommendations for:

Remodeling/GCs

Handymen

Property Management

Also, looking to hear Fayetteville section 8 successes and failures.

Thanks!

I’m thinking about getting home equity loans on 2-3 of my investment properties to purchase another property with the cash. Looking to pull out $100,000ish. I would likely pay cash then refi conventional.

Looking for any words of wisdom or advice in this realm. Is it worth going this route or would it be better to seek hard money and refinance the property into a mortgage?

BLUF: it's okay to use USAA if you are going to house hack as a method of scaling your real estate investment business...I would recommend finding a lender that understands your need beyond the normal consumer level services. 

USAA is my recommended bank, insurance company, and brokerage for any young service member that I encounter. I am an active duty, prior enlisted, Air Force officer who has been in uniform for 14 years and a member of the USAA community for 14 years. I have become intimately familiar and a strong advocate of their company and their dedication to the service member. 

Although I do recommend many of their services, if you are a RE investor, I do not recommend their RE financing unless you plan on house hacking with VA loans from duty station to duty station.

-They have a limit on the number of mortgages (four) one can have in their name. This applies to the purchase of anything other than primary residences. This includes mortgages that are serviced by other lenders. If you have four other mortgages and you plan on buying a new primary residence, you should be fine.

-Their mortgage specialists don't understand real estate investment. You are better off seeking financing from a bank that can speak the jargon and understands investment terms.

-They allow as little at 15% down (which is a positive)...with inexpensive PMI, however, at purchase, if your home appraises such that your equity drive below 80% LTV, they will not remove PMI unless you agree to pay for another appraisal after closing.

My real estate business going forward: I will use USAA for the purchase of my primary residences through VA loan as I PCS. Having their homeowners or rental property insurance in the same location as my loan statement and my property bank account is a level of convenience that has spoiled me. I will use other community banks to handle the purchase of my organic investment properties with all money funneling through my USAA bank accounts to the respective community banks.