All Forum Posts by: John Graves

Hey BP! I've found my first seller financing opportunity.

Small rundown as the numbers work well for me already. I just want some coaching on setting up the deal to my advantage without offending the seller. I tend to be aggressive in my thought process and reality often giggles at me for it. 

So the house is a class A, 4 bed 4.5 bath. 2000sqft+ listed at 315k. Seller has a 10k tax lien on it. I have yet to talk to him but the agent that brought it to me, says seller is willing to look at 250k. Guessing he's a builder and expected it to flip, then the interest rates went crazy. The neighborhood isn't the best, which also doesn't bother me, because the area is being scaled up big time. Lots of the folks inheriting are selling out and moving. 

Anyways, I'm wondering what kind of rates I should pitch. Its already looking like 75k under list, which is awesome. The house itself is beautiful. But he's got to sell. So, I was thinking Id offer 40k down and pay the lien off. Which would put me at 210k for the house. Rental Rates support the numbers. I kept Variable expenses pretty high in this eval just so Im not over eager, but id expect it to come to 200$+ a month average (calculated it at 400$ a month to see how much wiggle room I have in the deal)

How aggressive can I be here? Id like to pitch like 3-4% interest rate on this deal. What say  the experienced minds in here? Thanks in advance for your time!

@Alecia Loveless that's exactly the feedback I was looking for! Those reasons are also why I'm leaning towards a MTR over a STR.

Here’s a bit more question. 

How lux or not do you keep your MTR? This house is huge and empty (I was going to sell it at one point and sold most of my furniture and such).

Setting it up fully furnished again is going to be a fairly hefty tag and I know how easy it is to break things that are not yours. 

Also curious as to the age of appliances and such you have. Mine are fine for me to use but I could see a MTR expecting some updates. Fridge is 10 years old, glass top stove is probably 15 years old at this point. Microwave is a definite replace. 

My first thought is to spend the money (appropriately of course) and make sure my rental prices cover it. 

The STR part could work very well here when events are going on. But I don't want to STR this location full time. Downtown is the spot for that. I'm in a tourist heavy area. The Masters hold a tourney out here every few years for example, and having it up for STR on that weekend alone would be worth the hassle.

Thanks for your time!

ADU is permitted and I qualify. Splitting the property into the duplex is not permitted.

I just have to within the set backs, which I am, and it has to be under 1500sqft which it would be. 

I don't think I'll have the capital to build a separate ADU so I may just enclose the carport as the adu and MTR the main dwelling. I can STR is for less than 180 days a year as well, but haven't wanted to have that much downtime.

Does anyone do a hybrid strat? STR for less than half the year and mid term rental to fill out some of the gaps?

I could LTR the main dwelling and my still do so now that I can’t divide it into a multi family. But the mtr seems more lucrative if done right. 

Thoughts?

Ok so the county shot my plan to rezone down. I’m on .33 of an acre instead of a .5 acre. Shocker I know. But I’m willing to pivot strats. 

I’ve got a huge 5 bed 2 bath house I live in alone. I don’t want to sell it. Just refied and took 100k out to power my next moves. 

Instead of splitting it into a duplex with an ADU attached to one and living in the ADU. Im looking at a mid term rental strat.

I was going to enclose the carport and live in it as the ADU. Rent the newly created duplex out.

Now I wonder if I should look at making the carport a finished garage instead, and building an ADU in the back yard to live in, while I rent the main house out either MTR or long term rental, leaning heavily to MTR.

Or would it be more advantageous to still make the carport the ADU. Costs would be lower for sure. But the added value of a finished garage + a separate ADU could make sense for the future equity.

Has anyone had to make this or a similar choice and what did you do, and why? 

I want to stay compliant with all zoning and county laws. I’m in a rural/residential zone.

Thanks in advance!

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $150,000
Cash invested: $30,000

My primary turned investment. Couple hundred k in equity. Value still going up! Cash flowing unicorn of a house. Looking for more grails like this one!

What made you interested in investing in this type of deal?

I needed a place to live and got so much more

How did you find this deal and how did you negotiate it?

I found it myself on the MLS in 2014 when things were just starting to move upwards again.

How did you finance this deal?

FHA 3.5% down

How did you add value to the deal?

New roof, New HVAC, Replace Siding, Paint, bathroom remodel

What was the outcome?

Its about half the work im going to do to the place. Over the last 10 years my house has appreciated in value right at 3x. After I add another 20-30k to it. I will be able to re appraise that to 4x, easily.

Lessons learned? Challenges?

Put in the work. Do as much as I can myself and pay for the things to be done correctly, that are outside of my skill range.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Jay Unger was my local guy. I don't believe hes a member here, but he was fantastic!

Hello Johnathon! Something about us divorcees and REI huh? I've just decided to go full force REI myself and am making moves to meet folks as well. I'm in the Charleston SC area and the markets hot!

Reach out sometime!

Hey folks, I'm here in Charleston and the market is still strong!! Iv searched for some local members but am not having much luck so far! I've reached out to a few, but we all know it takes a lot more than that!

So, if you're in the Charleston SC area or are looking here. Drop me a line and lets get something set up! I'm a Career Chef, going full time REI. Check me out on Insta @johnnydoesfood. I'm happy to use my skills to help network and meet new folks.

If the Green Team reads this, go stalk my insta and reach out. Id love to cook some food at one of the events and chat REI around the grill. Drinks are nice and all, but its Food that gets people feeling the best and saying yes!

Thanks for the read!!

Hey folks, I'm here in Charleston and the market is still strong!! Iv searched for some local members but am not having much luck so far! I've reached out to a few, but we all know it takes a lot more than that!

So, if you're in the Charleston SC area, drop me a line and lets get something set up! Im a Career Chef, going full time REI. Check me out on Insta @johnnydoesfood. I'm happy to use my skills to help network and meet new folks.

If the Green Team reads this, go stalk my insta and reach out. Id love to cook some food at one of the events and chat REI around the grill. Drinks are nice and all, but its Food that gets people feeling the best and saying yes!

Thanks for the read!!

So thaaaatttsssssss why its listed as a 4 bedroom. Interesting. Since its listed as 4 beds and zoned residential. I can still buy it as FHA Its a 4 bed house, with a detached carriage house. So it seems they made the changes and it has not been rezoned for it.

So my thought is this. Getting it as is, and FHA rehab. Do the rehab. REFI it as commercial once rehab is done. leases clear end of july

You guys are great! 

To clarify, Im trying to make it work on my own, but will probably end up needing an equity partner if my search for lenders fails. I have someone in mind I believe, but I'm always looking to meet like minded individuals and make new connections. @Doug Smith

@Dennis Muno Great suggestion, thank ya!

@Chris Seveney @Robin Simon yes a DSCR loan is what i was referring to, and i found a lender who is evaluating it with me. I may or may not be in need of a lender still.

Also, here's another thought I just had. If i cant find terms that work for me (like hard money wants 30% down for example). Would it be advantageous to go FHA rehab loan? Id move into one of the units for a year, but thats fine if it will get me in here with enough cash to fix it properly