All Forum Posts by: Jonathan Holmes

Yeah I felt this way with my property taxes the first year. They did eventually pay. Assuming you mortgage services is a legit company I can’t imagine them not paying it.

I was curious if that would be the only way to go about it. Any idea what the next step would be? If I pay for the property search what would I do next?

I was contacted by a potential seller, him and his wife are still on the deed of a duplex. The wife purchased it, fell behind payments and foreclosure was started. Per the potential seller the duplex was scheduled to be auctioned. Before this happened the wife declared bankruptcy. This stopped the auction from going forward. This brings us to the current situation the wife’s bankruptcy was completed several years ago and they both have moved on. I was told their attorney told them no one was coming for the property at the moment and advised them to rent it out or do whatever they wanted with it. They have done nothing and the house needs some work. The tax bill still comes to them and hasn’t been paid in several years. Having never ran into this before my assumption is that it is not worth the trouble even if the owners just want it to go away. I can’t imagine the title not being incredibly clouded. Any thoughts BP?

I’m not sure why you would adjust the taxes. The management fee will be based on what is standard for the property type in your area. The best way to come up with this is call a few management companies and ask them what they would charge to manage the specific type of property you’re looking for. When I evaluate what I can pay it is based on gross rent minus taxes,insurance, mortgage payment, cap ex, maintenance and vacancy. I self manage and don’t plan on switching to a management company until the mortgage is paid off. If the amount left over meets my per door income criteria then the property is a potential winner.

I think you may have confused the four unit limit for FHA as a four loan limit? As long as you owner occupy the first property for a year and a day your wife could get a FHA loan in her name and you both could move into it. So functionally your limit would be two loans. I have heard that a second FHA can be pulled if the person has a good reason to need to move but I would check with a lender in that and I wouldn’t count on it. If your plan is to owner occupy, move out after an appropriate time has passed and buy a new property you can do so with a 5% down conventional loan. Another thought you may be using FHA and conventional loans interchangeably. (They are not the same all FHA loans are conventional but not all conventional loans are FHA) If so you are correct that the limit for many banks is four. Some allow ten and some portfolio lenders will allow even more.

I find a letter to be less aggressive than a cold call. Less of a salesman feel to the interaction. I would right a letter explaining you are a local who cares about the community and has noticed the issues at the property. Explain that you’re interested in real estate and would like to discuss whether the owner will consider selling this property. I would hand write the letter just to humanize you a bit. If this doesn’t work you can always cold call them. If or when he calls be sure to listen as much as possible and see if you can’t figure out his situation. Is he ready to retire? Does he want cash? Does he like the monthly check but can no longer manage the property? All this is information you can use.

You Dad is going to be your best bet here. If he can pull the equity out of his home to purchase this one in cash you will be in good shape. You could make a payment to him equal to his payment and put your 10k into the house. Once you have it to the point a bank will lend on it you put a mortgage on it and pay your Dad back. If you want to get more cash out than you originally paid you will need to hold the property for a seasoning period and have It reappraised.

Not legal advice. This isn’t all that odd. Check you state laws before anything else but you should just need a paper that says he agrees to vacate on whatever date, waives his rights under the lease agreement. After that’s is signed you are pretty much covered. Her releasing the unit is another issues as she is technically living there and has been she has probably established residency under your state law. These means if she doesn’t meet your criteria to rent and refuses to leave you will have to go through with an eviction. Hopefully she will meet your standards at which point you have her sign your lease and it’s the easiest turnover you’ll ever have. Due to this being an inherited tenant you did not have the option but in the future make sure you have a part in the lease that says anyone over 18 has to complete the background credit check etc and be on the lease. Tenants are notorious for moving boyfriends or girlfriends in who you would never rent to and then leaving when the relationship blows up.

Depends on your state laws. I think Texas is a no reveal state in that sale prices are not reported to the public. Where I live in Ohio it is listed on the county auditor site. If your state is the same there is nothing you can do. As a side note this shouldn’t effect a flip overly much. If you did good work and are selling at market level no reasonable buyer will have an issue with you buying the property on the cheap when it was a junk heap. If you know your market and are confident that your property will sell and someone brings this up offer to find them a junk heap they can buy and rehab themselves. With a reasonable wholesale fee of course :)

While it might be worthwhile to broaden your horizons and make some fast cash I would wait until you have your buy and hold niche down. I have heard this called the shiny object syndrome and occasionally suffer from it myself. If you really look at all the new stuff you would have to learn and all the effort that would have to go into a flip especially as a first deal that will seriously detract from your buy and hold investing. Also consider this, generally if I look at a possible buy and hold I often think I wouldn’t need as good as a deal as for a flip or wholesale. If you can’t find a 1% deal will you be able to find a deal that will make a good flip? And if you can find a deal that would make a good flip why not BRRR it and add it to your portfolio. Only you can say whether or not it is a good call for you but I always feel I will do better focused on a single goal rather than spreading myself over several.