All Forum Posts by: Account Closed

My credit coming out of college was bad, due to factors outside of my control, and now I am trying to get into real estate investing but I am not sure where I should be trying to get a loan. I imagine an FHA loan is probably the best bet, but does anyone have any advice or suggestions to try to get a loan with not the best credit. I am currently trying to raise some money, so I have some time but I know I need to learn more about this.

That is only one factor in buying properties.

If you have a decent down payment, credit is less of an issue. You need one or the other but not necessarily both.

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Originally posted by @Jeremy Hawkinson:

So I recently reached out to a laundry mat because I heard they might want to sell. I’m more interested in the real estate it sits on primarily because it has corner building that I could open up another coffee shop. My wife and I currently own 3 coffee drive thrus but 2 are on leased land, my 3rd is An owner contract.

The older lady who owned the laundry mat called me back and said they just want to sell the laundry mat business and not the property. But then she went on to express they actually do want to sell the property but they don’t want to because of capital gains. I didn’t have an answer for her about that but this Covid time has left me time to catch up on dozens and dozens of podcasts and I keep hearing how seller financing can actually help the seller because it alleviates or defers or some of the capital gains. Can anyone help me understand the way that works so I can approach them again with a clear way to help them out and hopefully help myself in the process.

Thanks

There are two aspects: 1. She is tired of running the laundry mat. 2: She doesn't want capital gains by selling.

Your offer should be to either do seller financing for a monthly amount that suits both of you and a term that is longer than their expected lifetime.

Or, you could do a renewable lease option, which allows for you to exercise the option upon her death at which time her heirs will inherit the property tax free and you can pay them the option amount.

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Originally posted by @Jasraj Singh:

I really want to know how to analyze a market or neighbourhood in which I'm investing, I'v talked with a lot of people about how to analyze a housing market but I still didn't really understand so I thought this place would be the best option to find. I just want to know how to analyze like how to find out if the demand is high, how do you know if homes are selling fast, how to find out if demand for property in any area rising or falling or how to find out if a neighbourhood is hot or not, I've discussed with a lot of people and they recommend me to use city-data.com which is an excellent website to know about the market but even in that website I don't know what to look for like if the population is 20000 in a city is it good or not or what it should be or what should I type in google to know about a specific market or place?

It depends on what kind of investing you want do. You have choices of single family rentals, short term rentals, vacation rentals, lease options, commercial, townhouses, high end rentals, low end rentals, rehabs, duplexes, fourplexes, apartments.

Give a little more information of what your ideal investment is and we can offer some guidance.

1 Vote

Originally posted by @Austin Works:

Given the situation at hand, with many STR investors losing income due to this virus, is this a good opportunity to find good deals on vacation rentals? Or should I steer away from buying these myself since there's no clear end in sight for the virus?

To me a "good deal" is where by buying, I make more than by not buying. Since AirBnB owners are being hit particularly hard, as they leave the industry, they will probably sell, putting more properties for sale on the market. But, the very reason they are selling is why I probably wouldn't buy. They are losing money right now. It's about 30% of the population that feel safe to go about the country. Boeing is laying of 15% of their workforce, so they don't project a growth in travel anytime soon. There is a negative demand for airplanes. (Airlines are canceling orders.) However, if you are within driving distance of a major population, gas is really, really cheap. So, it depends on the audience you appeal to and the location. If people fly to get there, not so good, if people drive to arrive, then that is much better.

2 Votes

Originally posted by @John Teachout:

For a flip there has to be a lot of spread between the purchase price and the expected selling price. It's challenging to find a property for sale that has these margins. The more expensive the property, the more likely you can get the spread.

You have to work the numbers backwards from the ARV. If that's $100k and the rehab is going to be $30k then you're down to $70k. I suppose you want to make money so you subtract $20k as your profit. Now you're down to $50k. There's going to be sales costs, interest on your money if you're not working with all your own cash. So in reality, for a $100k property you probably need to buy it for $40k. That's not too realistic.

If you take a property with an Arv of $500,000, subtract $50k for rehab, $30k profit, sales costs and money costs and so forth, you could probably pay $400k and still make some money. Paying $400k for a fixer property that has an ARV of $500,000 is probably not that difficult of a deal to locate.

Flipping can be lucrative but it can be a money pit too. Many lose money on their first one or two but then get it figured out.

The common problems are overestimating the ARV, underestimating the rehab, and underestimating the completion time frame. In many cases it's all three and that can hurt.

I agree, You got that right. And, on top of all that there are carrying costs and IRS taxes. When you calculate "profit" by "hours worked" sometimes it can be below minimum wage. Got to be careful how you buy.

1 Vote

Originally posted by @Robert Hernandez:

So the inspection period ended on Sunday. They did purchase an inspection and had 10 days to make repair request. But I have not heard anything from the buyer/buyer agent. My agent called the buyer agent and left a voice mail but we have not heard anything.

I did get a email from the title company today asking for my information so they can process it. I think that is a good sign. Does the title company need to hear from the buyer before they get with the seller? Or do they contact you after inspection contegicy peroid ends.

Usually the Title company will contact you the same day that they are called. So, that is probably a good thing that has happened. The Title company will do all they need to do until told otherwise. You don't indicate what day your agent contacted the other agent but usually 24 hours is enough time to get a response. Keep in mind that these are unusual times and it is taking people longer to do things. Family needs, illness, other emergencies all come up and take people's time. I'd expect a small list of repair requests. That part is pretty typical and may need to be done just so the buyer can satisfy loan requirements if nothing else.

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All Forum Posts by: Account Closed

Account Closed has started 12 posts and replied 576 times.

Post: Loan Options with poor credit

Post: What benefits are there for Seller on seller financing?

Post: I really want to know how to perform market analysis?

Post: Good opportunity to pick up vacation rentals?

Post: How do people flip house to make money with all these costs?

Post: Have not heard from buyer since home inspection, advice?