All Forum Posts by: Account Closed

I would be careful pulling a dollar-per-sf price from smaller comps and applying them to your house.  The additional feet are likely not worth as much per foot as those first 1500 feet.  If there are no comps in your size range, you will have to do some guesswork.  Expand your search area a little bit, look at some stale comps, try to determine how much of a discount you will need to apply to those extra feet.  If you want to be conservative, value the first 1700 feet at $80 and the next 500 at $50.  Of course, it may be that your first 1700 feet are worth $90 a foot if you do a nice rehab, so you may average out to $80 or so.  Impossible to say without knowing the specific location.

I have a form, I'll PM you.

@Frank Curtis 

I just texted you.  Happy to look at the numbers and give you my thoughts.  Hope you can get a nice deal and lock this one up!

I would keep looking.  Your projected rents are around 1% of asking price.  At that rate, you could buy very nice single family homes that would have lower vacancy and lower expenses (tenants would pay their own water).  Or shop around for a multi-family property that will give you higher rents for your dollar.

@Daniel Ryu

By "mortgage", I'm not referring to a loan. I mean an instrument you file in the county records to show there is a lien on the property. This prevents your partner from selling the property without paying off your interest.

Here's how I'm envisioning the transaction:

1. Your partner buys the property, deeded in his name, with a loan in his name.

2. Your partner sells you a contractual interest in the property. For example, you pay him an amount equal to half the cash he has invested in the deal, and the two of you agree to share equally in all net profits and losses from the property, and the net proceeds from a sale.

3. Your partner executes a mortgage on the property, which you file in the county records, giving you a lien on the property so that your partner cannot sell the property without your consent.

Note that your partner would have to come up with the entire down payment himself, and you would buy in after the loan closed. You don't want to commit mortgage fraud.

As @Ben Leybovich points out, my suggestion would be a "fractional interest transfer" and technically violate the due on sale clause. But I don't see any way the bank could find out about it.

What if you left the property deeded in his name and had a contractual agreement that he treats the property as if it were owned by the partnership? He could execute a 2nd mortgage on the property in favor of the partnership to secure his obligations. I've never seen this structure - just an idea to avoid issues with the lender. I'm curious what others think here. Individual ownership provides a tremendous advantage because the individual can get a conforming loan, while a partnership or LLC cannot. It would be a sweet setup if you could pool resources to increase purchasing power and still take advantage of Fannie Mae subsidized financing.

@Anthony Hill

Like several others in this thread, I would not buy that property.

You would be much better off buying a $130,000 property that rents for $1,250 a month (easily attainable in OKC, if not Tulsa) and giving your mother-in-law $150 a month to subsidize her rent. You end up with $300 more a month in your pocket, and you never have to evict your mother-in-law if she quits paying.

I tried the OKC REIA once and didn't really enjoy the presentation. There are a lot of investors there if you're looking to network. I went to the Millionaire Possibilities meeting last month and liked that quite a bit better.

In the states I'm familiar with (OK and TX), if you don't have an operating agreement, then by default your LLC is member-managed and operates under the state's LLC statute. You would be better off finding some kind of generic Operating Agreement form than operating without one.

@Melissa Fields

Welcome to BP, from a fellow OKC realtor/investor/flipper.