All Forum Posts by: Joshua Beall

 Did this review get posted?  I'd love to see it!

Hi All,

I'm located in Jefferson County WV, and looking to buy properties in Jefferson & Berkeley WV. I'm looking for an agent who will work with us as a buyer's agent as we're making offers on properties.

We're looking for distressed properties we can rehab and resell in a short period, and we would resell through the buyer's agent we used to purchase. So, the agent would get two commissions on that property, in the span of three to six months. We're all about working with professionals and "sharing the success!"

If you are an agent, or know of an agent, who is comfortable working with investors in Jefferson and/or Berkeley County WV, I would love to hear from you!

Thanks!

  -Josh

These are important questions you're asking, and they really all need to be answered by your lender. You should call them up and ask them, just like you've asked here, and they can give you the straight scoop.

That won't stop me from speculating, though :-) I think you will find that:

1. Unless they have clearly explained this is a renovation loan, that they are expecting the repairs to be done prior to closing.
2. That if this is a renovation loan, they won't permit you and your dad to do the work.
3. They won't require AC, but they will require heat.

Once you call them and get the information straight from them, be sure to let us know what you find out!

  -Josh

Hi Bobby,

Welcome to BP! I'm here in Charles Town and always keeping my eye out for properties. Care to share anything more about what you're looking for? If I see anything that fits your criteria I could pass it your way.

Regarding your two specific questions about an attorney and an accountant, it is my general advice that you always work with business professionals when conducting business. You don't "need" them, but I certainly recommend them. They can help you stay out of trouble you didn't know existed, and also stay focused on the aspects if your business that actually interest you.

From the title of your post I see you are located in Ashburn. What made you choose Charles Town WV for your next purchase?

  -Josh

I know this isn't the advice you want to hear, but it's the right advice: you need to talk to an attorney in your area who understands your local laws, and can explain how they apply in your particular situation.

Yes, attorneys aren't free, but they're also a saying about free legal advice: it's usually worth what you pay for it ;-)

Got any pictures to give us an idea what you're thinking? I'm not sure what your kitchen looks like or how this would fit with your layout.

I'm a little unclear on what kind of loan you're getting. Is it FHA or conventional? You mention you're "going the Conventional Loan amount of 5% down," but that "repairs adhering to the FHA guidelines." So is this a conventional loan and the lender has told you that they're going to use FHA guidelines?

I also didn't quite follow your numbers, but right off the bat I have a question: is this a renovation loan? Just because you're qualified for a max loan amount of $60k doesn't mean you can just buy the house for $55k and spend the difference ($5k) on repairs. It needs to be a renovation loan that is specifically designed to cover both purchase and renovation costs. The FHA 203k loan is an example of such a loan.

You mentioned that you have been "reading up on what the FHA guidelines are and what they require for a house," but you still have questions. Do you have questions about a specific guideline? What have you found unclear?

Generally speaking, FHA requirements are supposed to ensure the health and habitability of a property. Practically speaking, that means that any safety issues (unsound structural items, unsafe wiring, etc.) and "broken" systems of the house (plumbing, heating, insulation, etc.) will need to be fixed. If the house is broken, you won't be able to just paint it and expect it to pass.

When I last had an FHA 203k inspection done (which was five years ago), I believe the inspection only cost me $350. I'm a little surprised to hear that you're being asked for $1000 up front. You don't need to get the inspection and appraisal together. And does that $1000 cover anything else? If you're unsure about the property, I would get the inspection first and then put down whatever appraisal/application fee the lender is requiring.

And lastly, I have a feeling you're right: $5k is not going to go very far, and even though I don't know a thing about this house, I suspect you're going to need more than that simply because $5k won't pay for much work. You may need to renegotiate your price, or find a better deal.

i certainly wouldn't want a fuse box. It all depends on your market, though. Around my area, if I bought a house with a fuse box, upgrading to a modern breaker panel would be on my "must do" list.

Additionally, if the house is still using a fuse box, I'd be concerned about the age and condition of the rest of the electrical wiring in the house.

Everything can be fixed for a price, though, so you just need to know what work needs to be done. If you're new to this, hire an inspector to go through the house with you and check all this stuff out. It will be money well spent.

There's not enough details to say for sure, but here are a few key things to remember:

1) With residential properties, it's all about comps. You mentioned that comps in the area are selling for 40-55k. If those really are comps for your property, in its current condition, then you're getting a great deal.

You mentioned the property needs repairs. If those 40-55k comps are "after repair" comps, then you need to factor in the cost of repairs.

2) What the current owner bought it for in 2005 is largely immaterial. What matters is what it's worth today. You can use the price they bought it for as a data-point, but it's really secondary to the what data you can find in recent, comparable sales.

Hope that helps! Make sure to keep us posted on your progress!

  -Josh

When you purchased the property, was the building on a separate deed from the land?