All Forum Posts by: John Livingston Bullier

Hey BP!

I'm representing a buyer who is in contract to purchase a property that is subject to an oil and gas lease to ExxonMobil recorded in 1974. 

The kicker? The lease itself was not recorded, only a "Memorandum" (which lays out the parties to the lease), the legal description of the property, and the notary block. The "Memorandum" references "that certain oil and gas lease made and entered into this day" but it does not include any terms, provisions, expiration date, etc. 

The Lessee is Mobil Oil Corporation of New York....

If it is still in effect I want to get it removed but I don't even know where to start trying to track down the lease. Any thoughts?

@Mathew Wray

Thanks Mathew!

Hey BP-PDX!

I'm looking to connect with a mortgage broker in Portland who specializes in originating owner-occupied FHA loans for 2-4 unit properties. I'm a real estate broker and work in Eugene & Portland but I do not have a good contact in Portland. My focus is multifamily and I'm a strong advocate for first time investors acquiring 2-4 unit properties with FHA financing.

 I know the value a great lender brings to the table and would like to find someone I can refer my clients to with confidence.

Does anyone have any recommendations? 

+1 for Followup Boss. Silly name but awesome product. It's purpose built for real estate and plays nice with all of the other products real estate professionals use.

Seller financing is always my first choice when trying to limit paperwork and headache. Not to mention you usually save 1-2% on closing costs. You just need to make sure that you know your market and are confident in your underwriting. Lenders/appraisers typically serve as the final authority on a purchase and in this case you won't get feedback from either. 

If you end up pursuing seller financing, make sure you have insurance in place PRIOR TO CLOSING. Same goes for cash deals. The lender will always require its in place as a final checkoff and it's easy to miss when they're not involved. Also make sure you're setting aside reserves for insurance and property taxes.

I would also recommend that you analyze the big economic drivers in any region you plan on investing. High paying renters need high paying jobs. In a sense, you could say that you're investing in the area and it's infrastructure and growth potential because that directly impacts the long term viability of your property. College students are the exception but they're a different beast because of the cheap money available for student loans. 

@James Feyler Is the property permitted as a duplex or single family dwelling? A couple things you would want to investigate further are the zoning (if duplexes are allowed), how utilities are setup (individually or separately metered), and any other restrictions on long term / short term rentals. Some cities require an owner live onsite for short term rentals for example.

@Stephanie Sicard I would vote strongly against what your agent recommended. Have you interviewed other real estate agents? Look for some who specialize in working with first time investors. I'd invite a few to get coffee and get their advice on your specific market. My guess is that they will be all on board with the multi-family property. 

The only part they got right is that you must facto in repair and maintenance costs. You can set yourself up to cover these as long as you find a property with sufficient cash flow. I set my expected operating costs at 30% in Eugene, OR and 25-28% in Portland, OR and then count THAT number against my mortgage payment. If the deal still cash flows, it's worth delving deeper.

@Julian Davis FHA loans require that you live in the property for at least a year. This applies to 1-4 unit properties. I've heard some people say that the wording is actually "You must have the intent to live in a property for a year" but do your own DD there.

@Michael Lopez I think you should be set as long as you connect with a good real estate broker. They will be your eyes and ears. As for the financing, FHA requires that you owner-occupy for at least a year.