All Forum Posts by: John Clark

My partner (also builder) and I are preparing to close on three lots that we'll build on. I'm going to own two lots And he'll own one when it's all said and done. The problem we've run into is the lot he's going to own and one of the ones I'm going to own are on one parcel. In order for the bank to give us our own loans they need them to be on separate parcels. We've already moved closing out once so moving it out to have the city do a lot split isn't really an option at this point. One thing the bank recommend is my partner put those two houses in his name and we sign a pre-sale contract between us that says he'll sell it back to me when construction is complete.

My questions are, what are the risks of us entering this agreement? And how do we go about writing it? Our agent says he doesn't have any such contracts for us to use.

Located in Northwest Arkansas

We are under contract on 3 lots and the city told us that the sewer is very shallow in this neighborhood and since the lots drop about 8' from the street our options are either build up or install grinder pumps on all three lots. Two of the lots will be rental units and the third will be my personal house. I've never had to deal with pumps before, are they a long term maintenance issue? And do they need replaced often? Seems like in the long term it may be cheaper to build up but I'd like to explore all of my options.

welcome, make sure to check out our local REIA when you move up here . We have 4 different meetings every month to cover all aspects of REI.

I am looking at buying a foreclosed property that is labeled as stigmatized.  There was a suicide in the house in 2016, and I'm torn on if I should buy it.  It's about 50% remodeled already and the rest of the work is just carpet and paint mostly.  The bank took the property back for $136k and is asking $194k.  Comps in the area are  around $250k.  I'm not sure what the disclosure laws in Arkansas are when it comes to this kind of situation.  Just wondering, anything other than the heebejeebees, would you all buy a property like this?  why/why not?  

@Jay Helms that was my original plan but based on rents in my neighborhood i just don't think it would cash flow. mortgage is 875 and rents are around 1100. I'm considering going ahead and using the HELOC to buy a place and then sell the house. I feel good that my house will sell quick, and if not I can rent it out as a back up plan.

another vote for Paul Younger. Helped me with my LLC, great guy to work with.

so the HELOC I got is based off an assessment that was pretty close to what I should be able to get for my house now. However I did talk to my lender to day and they said since the HELOC is with a different bank, I should have no problem using it as a down payment with FHA (apparently FHA has a weird thing about using loan money for down payment that comes from the same bank providing the mortgage).

I have looked into renting my house out and based on my monthly payments of $875 and the fact that I could probably only get around $1100-$1200, it just wouldn't cash flow at the end of the day.  or at least not enough to make sense.  Renting it out could be an exit strategy if I can't get it sold quick enough or decide to get a duplex first.

Originally posted by @Diego Ortega:

Congrats! It looks like you have already started moving on your goal! Here are a questions/thoughts I would focus on. 

-Is there somewhere you can stay if you don't find that duplex deal yet? Family, friends,etc.  I know it isn't ideal, but you don't want to take a bad deal just because of feeling rushed. Can you place some things in storage in the meantime? Selling and buying a home takes time.

-Ask your agent for a net out sheet that will give you a good idea of how much money you will actually net out of the deal. There are lots of fees and agent commissions that will come out of your profit, maybe even taxes.

-A house hack may not cashflow right away with you living in it, so keep that in mind. My gf and I own a duplex we just house hacked as a way to increase income. The mortgage is $1280 with an FHA Loan, 3.5%. We purchased for 190k. We renovated both sides and just rented out the bigger side for $1500 a month. With utilities also being covered by the rent, we are not cashflowing, but living for free! When we move out, we will cashflow about $1500 a month.

-Can you lower any other monthly debts? Always a great idea.

You may have already thought of some of these. You seem very prepared and I would say you are not having analysis paralysis. You're making moves! Keep it up and it will start to snowball!

I do have the option of staying with my girlfriend if I do sell fast and can't find a place immediately.   there are several factors though that still makes that a temporary thing.

Just out of curiosity, how did you find your duplex?

All of my debts with exception my my mortgage are gone! I made that commitment early this year and made it happen this summer when I got rid of my expensive car payment for a paid off car.

Yeah I don't think it's actually analysis paralysis, just more nervous the closer it gets to reality lol

So I am oh so close to moving on my first deal which will be a multifamily house hack.  And as excited as I am about it, I feel like I have to do 1000 things first and that thought is keeping me from moving forward.  I thought I would write out the steps I've completed and what I see as barriers in hopes of some feedback on how to prioritize my next move.

Current living situation.

Working on getting my house ready to sell.  Based on comps i should be able to sell for $160k, currently owe $100k.  My plan is to use the money made on the house as a down payment on an fha loan and repairs on a property.

I am currently finishing up a remodel on my house.  I'm doing all of the work myself so it is taking some time to finish it.  Things that are left is flooring in kitchen (some kind of vynal, tile won't work, long story), putting new trim up (all trim is removed), and having a pre inspection to find any thing that my hold up a sale.

I am in talks with a bank that works with a lot of investors and found a loan officer that invests hikmself.  I have not filled out a loan application yet.  I also have an agent that works almost exclusivly with investors that is helping me get my house sold and into a new property.

I guess I'm stuck on where do I go next? Do I go ahead and get approved for a loan and start making offers on properties? I have a heloc for $30k that I haven't touched so I could use that.  Or do I focus on finishing my house and get it on the market and then find a duplex?  I feel good that my house will sell fast, I'm in a fairly hot market and the house next door sold last week in a day for the price per sqft that I'm going to ask and it's not been remodeled at all.

I'm also just worried about selling my house and then not able to find a property in this market thast will cash flow.  There's definitely not much if anything on the mls in the area that would cash flow.

Any thoughts or suggestions is very much appreciated!

I found a house that is obviously vacant and has been for quite some time.  When I look up the tax records the only address for the owners is that property.  I asked around the neighborhood and the only information I got is that it was an inheritance that was being used as a vacation house by the owners and then they just stopped going.  What are means have you all used to track down owners when the trail is cold?