All Forum Posts by: Jonathan Holmes

Hey there, First let me say I have never had this result in a closed deal but this has not been due to the owner financing rather due to me walking away or some other issue. The biggest concern for the agent is the commission. There for I would always offer a significant down payment. How much depends on the property but I have had several agents agree with the idea in theory. I have just never been able to get all the other details worked out to make the deal. If I offer 15% down the agent will get their commission at closing and since I am a non agent self representing they get the double commission. That only works in states where that is legal. If you ask every single agent you talk to "Would the owner consider carrying the note for a short period with a significant down payment?" You will here a lot of no's some maybe's and an occasional yes. This works best or only with a motivated seller, a property that has been sitting on the market or some other special circumstance.

FHA loans only require 3.5% down. That would be less than 10 grand for a 250k property. You would probably know this better than I in your location, but in my area it is common to negotiate seller paying the closing costs. That will keep your initial investment even lower. With your ability to save I would even look at triplexes and quads. Depending on what they go for in your market with an FHA loan you may be able to save up the down payment in a couple years.

Also if it strikes your fancy consider the FHA renovation loans you might find a duplex in need of some work and be able to include the rehab in the loan.

Just make sure no matter what that your numbers work. You might be able able to pay more for a place you're going to live but you don't want to be stuck there after you're ready to move on.

My two cents for what it’s worth. What I find most concerning is the way the tenants handle the issues. The issue is they aren’t happy with the condition of the paint on the wall. A well trained tenant would firstly have brought this up prior to lease signing. The last time I rented I had this very issues. I told the manager we will move in if the landlord paints. He did and we did happy ever after. However, I’d forgive that mistake if prior to taking any action the tenant called and said “hey I don’t like the paint I found some and I want to put it on the wall.” I’d say no and then come by and remedy the situation myself and everyone is happy. Instead of the two reasonable options of either asking for new paint up front or asking for the landlords permission to fix after the fact, your tenant went ahead and screwed everything up. What happens with the next issue should be you biggest concern. When the fridge breaks are they gonna call or take it apart right in your kitchen? What about a broken toilet? Electrical outlet? I don’t roll the dice on tenant repairs for two reasons it’s not theirs so can’t possibly care about it like I do and two they aren’t contractors who have a reputation to protect. They have no reason to do a job beyond their minimum standards and who knows what they are. My solution would be to go over and calmly explain that it’s not acceptable for them to make and changes or major repairs without consulting me. Chalk it up to a liability issue if you feel the need to not be a bad guy. People hear that term a lot and generally just accept it now a Days. Next I would do whatever is needed to make the room presentable up to and including totally repainting it. This will teach the tenant that he can rely on you to do the repairs that are more concerning and will probably come later. It will also solidify you as a good guy landlord and keep the relationship solid over the next couple years. Yes the tenant is legally (probably?) responsible for the fix. But much like cash for keys it just isn’t worth the hassle sometimes. If the whole experience results in two years or more of a well trained tenant it’s worth the cost of the paint.

I have never done a title search myself. I have heard of it being done by going to your county auditors office and looking the property up. I have assumed that there is more info than what is available on the website. I do not know if this would be as in depth as what is done at a title company. 

I would recommend paying for it to be done. There are times to try to save cash and there are times when the professionals are cheaper in the long run. Assuming your state is a state that allows closings that are done totally by a title company I would view this as an opportunity to build a relationship with a company that you may do many deals through in the future.

Honestly, it seems like this an issue that is worrying you. The moment you contact your title company put them in motion on the search and get your title insurance questions answered I suspect it will make the whole deal easier to go through with.

Good luck to you and I hope it works out!

There shouldn’t be anything stopping you from running your own title search. You could even include a contingency in the contract giving you the right to walk away should it come back clouded. This may be an issue as your seller seems fussy. I imagine it is going to depend on the title company wether or not they will insure a quit claim deed. They generally are the ones to run the search so if it comes back clean I can’t imagine you wouldn’t be able to find a company to do it. All that said in your shoes my next step would be to contact the title company I intended to use and ask how much to run a title search and if they will insure a quit claim deed. Those are your important questions in my opinion. You may also want to ask yourself “Is it really worth dealing with this seller?” The quit claim deed doesn’t really trouble me the generally fussiness might make me walk away though.

As far as I know all FHA products are limited to the residential market so four units or less.