All Forum Posts by: Jordan Thompson

I got a lead 3 days ago through a family member that a customer of theirs is looking to sell a property off-market, but it's a pre foreclosure.  I've been heavily analyzing for the past month in Hickory, NC but this one is in High Point and while I'm not as familiar with the area, I did go look at it and I'm interested but would love to hear some opinions.

The seller had previously owner financed the property and the (then) occupants basically trashed the place including taking wire scraps to the salvage yard for cash; ripped up floors.. the works.  The house went into pre foreclosure (I don't know the whole story) and there was a tax lien.  The lien was paid last year by the owner which I confirmed through public record.

The seller wants to sell it off market and is looking to get ~$75,000 for it; its a 3 bed and 1 bath (listed on GIS as 2 bed 1 bath) and has been COMPLETELY renovated... I'm talking new roof, new HVAC and duct work, new electrical panel, new paint, new PVC & PEX piping throughout the house, new doors, some new windows, landscaping and gravel is all fresh, new plastic in the crawl space, new outlets and switches throughout ... new garage door, roof, and paint on the single detached garage which matches the house.  Basically all of this was done this year.  The house next to it had a complete reno a year or two ago, but the area looks OK at best... I'm unfamiliar with that exact area, but I've certainly been in much worse.

I'm super excited because the seller is motivated but I'm cautious because of the pre foreclosure status.  Rent should be between 780 and 900 based on comps and the rental calculator here on BP so I'm relatively confident on that but this also has a detached garage.

I would do traditional financing with 20% down which would mean an inspection, title search etc...

Am I missing anything?  What questions should I ask? Does this sound like a great first deal or a landmine?  How can I confirm it's actually a pre-foreclosure?  Let me know what other information I should provide.

Thanks!

Jordan

@ H. Louretta Dawkins, how about for a brand new investor?  I live in Concord and am looking for my first property but am a little timid of the home prices...

Would Salisbury be a good area in your opinion?

Jordan

Great points Steven! I actually pulled the trigger on a conventional refinance and should close this coming Friday so I'm pretty excited. I did speak with several lenders about the DTI ratio and between that and the liquid cashflow, I don't think this was the model for us at this point in our lives.

That being said, I'm dropping from a 4.375% ARM to 2.8 fixed rate so I should be able to throw a few more dollars on the scrap pile.

Thanks!

Hello everyone!

Long time lurker and first time poster here... 

For the past 3 years I've been turning my wife and I around financially to purchase rentals in the future and I'm coming to a fork in the refinance road and would love some feedback from anyone who have gone before us.

Three years ago, we had $17k of personal debt and very little savings (a few thousand).  Today, credit card balance is 0 (down from maxed at 14k) and my car loan is payed off; it was an Infiniti that I sold and promptly bought a corolla (great move for us). I have 6 months of expenses saved in a money market and another 7k in a personal brokerage account with Fidelity - this will be the fund I'm adding to for a down payment.  My wife and I have no children, but she has some pretty severe medical issues and cannot work so I've learned to become very disciplined with our money as I'm the only income source right now aside from selling auto and homeowners insurance on the side.

Now for the mortgage info: we purchased our home for right at 185k in 2017 and currently owe 174k.  The market has been crazy around Charlotte and we've had 2 houses in our neighborhood sell in the past 2 months:  1 for 260k and 1 for 270k.  One is newer, the other older, one has more land, the other less; both are within 200 sqft of our house and neither has a 2 car garage like ours.  The point is I'm relatively confident that our house is worth around the 265k mark which would put us right around 90k in equity if we got the house re-appraised.

I'm looking to refinance to get us in the best condition possible to fund our first acquisition - hopefully in the next 2 years. I was looking at a conventional refinance that would drop the payment by about $300 per month, but then I found (on the BP forums) the 1st lien position HELOC, or Vortex mortgage, or All in one Mortgage, etc. I know there are some differences but I'm interested in the availability of our equity to make cash offers, and I'm confident in my financial discipline to keep on the whole "use the HELOC as the main checking account and deposit your paycheck in it" concept. The concern for me is that, while we are cashflow positive, it's not astounding... the medical insurance premiums and HSA contributions run pretty high which keeps liquid cash flow at about 350~400 per month and sometimes less.

Has anyone on here been in similar financial conditions and then gotten the all in one mortgage? If so, were you and are you still happy with it? I'm open to critique, options and opinions but definitely reviews. I've talked with several lenders and all but one have tried to steer me away from the 1st lien position HELOC since, you know, interest for the next 30 years...

Thanks!

Jordan