All Forum Posts by: Josane Cumandala

I would say above all else study the landlord-tenant laws of your state. In general my understanding is that you must honor any leases encumbering the property while they are in effect but you are not obligated to renew them. Have they been otherwise good tenants? I would get to the truth of that asap. Don't just take the seller's word for it, get hard documented evidence.

Are you planning to self-manage this property? If not I would be screening rock star property managers to deal with this property asap. It can be an awkward situation with inherited tenants and you want to take your emotions out of it as much as possible and just run it like a business. 

If they are otherwise clean tenants who are paying market rate rents on time every month it could all work out for the best. In general though I'm leery of inherited tenants because of the landlord tenant laws in my state of residence. 

I think overall you're doing everything right. Good luck and keep us posted on how everything goes. :)

Following this thread because I'm curious about them as well and have no prior experience. Am I understanding their website correctly? They want 8% interest on loans and paid in full after two years for small income buy and hold properties? 

It's hard to say without seeing all of the income and expenses. Is it $300 after taxes and expenses? Is that per unit or total? Something seems off. If you can provide a snapshot of the numbers I'm sure the BP community will be able to help you out. :) 

I feel you! One of the best books I've read so far on creative financing is a short little volume called Owner Will Carry Jack Miller. There are also a lot of great real estate podcasts :)

I would probably do it so long as I myself or someone I work closely with knows a lot about a mobile home park management and how to add value to it. Leverage is a powerful thing. With buy and hold strategies the terms of the deal are arguably more important than the price. Will the owner be charging interest? If you can acquire the place for no interest or very low interest it will be much easier to meet him/her on price. If they want more interest I would probably ask for a longer grace period while I make improvements to the park and fill vacancies. It all depends on the current physical and financial state of the park and what makes sense. 

But long story short yes, I would definitely consider that offer if the upside potential and highly favorable terms were there. Best of luck to you! :)

Hey fellow young aspiring investor! 

I agree with the other commentators on this thread so far. There is probably no "perfect amount" of money to have saved up before you buy a property. I am a fan of @Stephen Akindona's method of creative financing and that is how I personally want to start buying real estate. I do not want to be completely beholden to the federal reserve in this time of rising interest rates. 

But I do agree the first step is getting your mind right. Rich Dad, Poor Dad and The Richest Man in Babylon are great reads about personal finance. Pay yourself first to ensure you are saving as much as you can, then pay off your debts and support your lifestyle each month. Run your life like a business so that you are in the habit of being responsible and resourceful with money and it will be easier to buy property and run your investing business successfully.

I would say if you see the right deal take action. Always be networking and telling people about your interest in real estate and hopefully the right team members for you will come alone. Good luck! :)

Good luck! Your daughter is lucky to have a dad who can do this kind of thing for her. Be sure to pass on the knowledge you have of real estate investing. :)

Pay debt in time. If you have student loans, making payments on them will build your credit. 

I built mine up in college buy getting a very basic credit card with no fancy rewards. I used it to buy only one thing each month - my metro card (I live in New York City). Transportation was necessary, I used it every day, so it was an expense I could justify and would be able to pay off every month.

Really should have been working on those student loans. Coulda, woulda, shoulda...

Point is, paying off debt on time every month is the way to build a good credit score. Having no debt or having TOO MUCH debt or missing payments is what gets people in trouble.

You will have to pay mortgage insurance on the FHA loan as well as your monthly payment so be sure to factor that into your expenses.

Also, FHA appraisals are a bit different than conventional mortgage appraisals. The appraiser is required to do a more detailed inspection to ensure that the property is safe, sanitary, and habitable. They will look at the roof, the foundation, etc. With conventional banks their goal is to close the deal and sell the loan ASAP. With FHA their concern is that the person they lend to is living in a safe environment. See the difference? If there are multiple offers on the table you might miss out because it might take longer for the loan to go through.

I'm not sure how to answer the last parts of your question about the fourplex so I'll leave that to someone more experienced. I would think having two cashflowing 2-4 family properties between the two of you would be better than one fourplex, but I don't know enough about your market to really say. It also depends on your budget for the down payment and what you can currently afford. 

Good luck to you both! :)

Like Tristan said, the answer lies in the numbers you're working with. I'm unclear if you're saying the property barely breaks even with him living in it if you paid cash/conventional mortgage vs seller financed or if it barely works in either scenario. If it doesn't look like it will be profitable obviously don't do it. 

I've been listening to a lot of Larry Harbolt and Tyler Scheff's podcasts and they are big fans of seller financing. Listening to them it seems like few investors try seller financing because they are listening to the conventional wisdom of "cash is king," not because there is some horrible catch to seller financing. The thing is you will have to do your homework on what you can realistically afford to pay the seller and you might need to educate the seller on why this strategy could be a good thing for them and it seems that many people just don't want to make the effort.

Good luck!