All Forum Posts by: Jeremiah B.

So, obviously you need to give them back.  To do anything else (including forget about them) boarder on ethical :)

Whether you read them or not is your call.  If I were the one to have found them, I would have decided to not read them... but would also not listen to my own advice and read them anyways.

Just be sure you give them back.

@Sky Mikesell Small world.  I live in PDX and invest in Charlotte.  Though the investment is a PT thing for me, so I don't plan to move there :)

I have a different understanding, so let me ask the question in this way:

If I am current on my payments but am underwater, can the bank call my loan due?

I strongly believe the answer to that question is no.  I recognize that the price factors into a great many number of things, such as my ability to refi or get other loans, but this is insufficient for them to call the loan due.

Brent  - I'm not sure I follow.  If I owe 80K on a 100K house, I have 20K equity and all is well.  If that house value is cut in half to 50K, I will owe 80K on a 50K house.  That's a big paper loss, but does not mean that the loan will be called due.  Either way, I can still keep making my monthly payments at <5% and ride out the bubbles and bursts.

My view is that if I am cashflow positive on the house, I should keep it - regardless of whether I'm underwater 30K or have 20K in equity.  So, for properties I already hold in my long-term, buy-and-hold portfolio, I'm far far far more concerned about gross rents than property value.-

Ben - yes - we are riding a bubble.  But let me turn the question around to you:

When the bubble bursts, what will happen to gross rents for most SFR investors. We know it will drop, but will it drop by 2% or 40%? And in that spirit, what happened to gross rents during the most recent crash (I am hearing ~10% in gross rents was normal).

Hey Chad - Congrats!!!

I'm no expert, but I have a few thoughts:

First - IMO, you should run this deal similar to you buying it through the MLS. This means you would follow similar steps - just with different terms.

Second - in NC, you DO need an attorney to do the closing.  And yes - there should be a closing.  I have a wonderful closing attorney in Charlotte if you're interested, and she does a lot of non-local closings for me.

Third - DO NOT PAY EARNEST MONEY TO THE SELLER.  PAY THE EARNEST MONEY TO THE CLOSING ATTORNEY.  

And fourth - what escrow are you referring to?  There probably will be some money kept in escrow during the closing, but probably will not be money kept in escrow long-term for taxes/insurance.

I've never done a seller-financed deal, so take this for what it's worth.  But that's my two cents.

Happy hunting!

Hi Brandon,

Welcome to BP.

I'm inferring a bit, but I think we need to clarify a couple hard truths:

1 - If the house has depreciated by 7K over the last 7 years, you probably don't have a lot of equity in it.  To say it another way - you probably don't have a lot of money tied up in this.  If you sold it today, after fees, concessions, taxes, etc. - how much would you net?  This is a key question that will play a big role in any outcome.

2- If your rent is barely covering the mortgage, you are losing money (i.e. cashflow) each year.  The house will be vacant.  The house will need repairs.  If you're not quite profitable on the good months, you will lose money over the long term.

3- I don't know what your personal finances look like, but can you afford the mortgage if you move in?  And can you afford it plus the reserves to cover big repairs?  Can you afford the monthly losses of an extended vacancy?  Your personal finances are by far the most underrated factor on the BP site when considering buy and hold decisions.

If you can afford to keep it while living there, I would move back in while you're in the area.  If nothing else, this will delay the decision of sell or rent for a couple of years.  These couple of years are huge - in part due to inflation (a huge asset to a RE investor), and in part due to the amortization schedule of your loan improving (i.e. paying more principle than interest).  Time has a way of fixing a lot of bad buy and hold decisions... With that said, this doesn't feel like a good long-term deal, and you may want to part ways with it in a couple years.

Happy hunting.

@Kevin C. I own a couple places in West Portland, but most of my investments are actually out of state, in NC.

Oops, missed the rent amount.  Sorry about that.

I don't buy in the area, but I'm not sure you could find a buy and hold cash buyer who is willing to pay less than 1%.  

At first glance, I don't think that there's a wholesale deal to a buy and holder here.

As a buy and holder, the info you provided is helpful, but I also need to know the price, the rent comps, and the age.  Without those three, anything I can say is a guess.