All Forum Posts by: John Ching

Sean,

A few questions for you:

• Funding available for Fix N Flips? (based on what you are wrote, you do not cover rehab costs, correct?)
• What are the upfront points?
• What are the u/w fees? Loan origination fees, etc.?
• Do you lend outside of MD? (Looking specifically for MO)

Thank you,

John

Looks good, Ken! Sharon hit it on the head, your card tells someone exactly what you do.

Robb posted an important part of making offers as an investor - put an expiration date (I forgot that part!). Very good advice. I don' t believe upping your earnest money is going to make a  difference in your offers, but saying you can close in less than 30-days will definitely tell them you are a serious investor. If you do have cash and don't need private money, saying you can close in 14-business days is a good idea. 

Still, keep the normal 10-day inspection contingency so you can do your due diligence and have the property thoroughly inspected. That will leave you with an exit strategy to bow out gracefully if the property needs more work than you originally thought,

Carrie, you can write offers on your own. There are generic offer forms that your agent should have or I could point you in the right direction. 

That's why I said to make sure the agent knows you intend to flip the property - That means you will need a listing agent! BOOM! Double-deal for them! (potentially) That way, the agent will be more agreeable to writing your offers, running sales comps, etc.

Yes, it would be great to find $100K properties in MDR and SO Cal in general, but I don't think the local economy would agree. I'm surprised that Ohio has such generous rents for properties in the sub-$100K range.

Rents here in SW Missouri generally top out at $850-$900 for a 4 bdrm house. : (

David, I sent you a message about this property.

Wai Wah (cool name, btw),

I can get some figures for you, but estimate at least $150/sq.ft. for new construction. Maybe you can divide the lot and build a smaller duplex on the new lot?

The reason I say this is you have to look at it from an end-user perspective. It's easier to get conventional financing on 4-plexes or less. Conventional lending is available for 1-4 unit properties. 5+ units requires commercial lending.

Carrie,

You threw me for a moment at first when I saw that you were in MDR and you were talking about home prices in the $100K-range...Then, you mention the house was in Ohio! LOL...sorry, I digress...

I'm from So Cal but flipping here in Missouri. We are having the same issues as you are - RE Agents don't want to submit our bids because they are so low. 

I say screw'em! It's YOUR MONEY. Make offers based on what your calculations show is a good offer. I've had several mentors who said, "if you don't blush when making your first offer, you offered TOO MUCH!". It's advice I've taken to heart. 

Tell that agent you'll start writing your own offers if he/she is too lazy to do it. A low offer will only draw a bidding war if there is another buyer. Have your money lined up and be the strongest offer.

Remind your agent that you will be rehabbing the property and re-listing it within a certain time frame (we shoot for 30-60 days for most flips), so they have the potential of getting another listing without having to work for it...at a higher price!

Hi James,

I think Jason Clark nailed it - This realtor doesn't want to "hassle" with a FHA loan. The clue was in your description, "St Cloud is red hot right now". FHA loans get a bad rap because they usually take longer to close and RE Agents don't want to lose a deal because another buyer has cash or conventional funds ready to go. I'd say find another RE agent.

"Why would anyone bother to advertise apartment complexes for sale with such low cap rates?"

For places that have high sales prices (like LA) and high appreciation rates (like LA), it makes perfect sense to buy and sell commercial and multi-family homes with low cap rates. 

Conversely, in places like the midwest, you can have bountiful cap rates (15%+) but low-appreciation. Therefore, your long-term strategy is geared towards monthly cash-flow, since your year-to-year appreciation will be much lower.

Make sense?

Steven,

I wish I had seen your post earlier. I've been in the lending game since 2003 and simply cannot fathom bad customer service. As a mortgage banker, good communication is probably the most vital part of my job. It's all been said here (and quite well, I might add). Even if I have no news for my client I will still touch base with him/her every couple of days to say so.

My broker lends in California and owns rental properties himself (we both do). PM me if you have investment property questions or just need advice. We are all here to help.