All Forum Posts by: Karl Platzer

Update^

After seeing the price go from 100k to 85k I passed on this deal. It would have exceeded the "one percent rule", meaning the monthly rent would have been higher then one percent of the purchase plus rehab price. It would have been an excellent addition to my rental portfolio. The reason I passed was that the Manufactured/mobile home was a pre1976 property. In 1976 HUD made the requirements much more strict on manufacturing and placing these units. This means that as I understand it the pre1976 properties will never be eligible for FHA loans, depreciate differently and will be a challenge to sell/refinance regardless of the level of finish. Although I am a buy and hold investor this property would have slowed my rate of expansion/growth. Buying and running the property would have certainly meant leaving a large chunk of capital stuck in this deal. Thanks for everyone's input. Stay well.

Update, It's been a few days. I got the keys to the property and did a walk though. This morning seller withdrew his offer of owner financing due to corona concerns. I would guess he needs money and as we know cash is king during uncertain times. I am going to offer him 75 cents on the dollar. Getting the funds together if accepted could be a challenge but when a deal is hot enough finding the capital happens. I have some private capital I can crank on, plus the CARES act lets us pull 100k out of our IRA's, I might even be able to track down some of the more aggressive hard money still out there. Anyone else seeing this in the market? Rates and loans all over the place?

@Account Closed, I have, It's in about the condition you'd think a 100k property would be in. It has the makings of a junk yard in the back and needs a full rehab to be competitive on the rental market. I'm starting to see deals like I haven't seen in ages. Maybe things finally moving to resemble 2010 again.

@Account Closed sorry mate, I though you were in Texas, that's what I really wanted to know. I hear Austin is amazing minus a few local ordinances that are not exactly landlord friendly. Something I heard from a bigger pockets podcast lately.

@Account Closed, Hello Peter, Thanks for being the first to respond. You didn't misunderstand any context. You comment is great advice for normal times. I would guess people need cash to counter poor rent rolls. I live in Olympia and this one is in Thurston county. In normal times this would be a full cash deal that no bank would touch, hence the high rates and down payment. How is Cali doing? Your state was on fire!

@brant 

@Brant Jones I just learned to tag thanks again buddy

Brant Jones, thanks for adding in so quickly! I sent the number over as is, and the owner is happy with them and ready to move forward. He hasn't told me what idea he likes the most. Your thought process is spot on. I agree with you 100 percent. Very smart tactical advice. He wanted the 40% but I will run it by him, since he's been full time real estate person since 08 I'm sure he'll want a prepayment clause : ) Thanks Brant

Hello Bigger pockets,

In need of some help in these crazy times.

I came across a nice off market property in Washington state. The seller is able to seller finance part of it. It’s a good enough deal that there is a fair amount of interest in it. So I’m moving quickly. I'm writing a few “options” and would love to hear your take on the terms. Buyer needs a 40 percent down payment so that leaves us with term, rate and price to negotiate. Since we’ve never had a pandemic like this before this is what I have so far.

Full asking price 99,500

Options:

A.

Price 99,500

Down payment 39,800

Note 59,700

Term 7 years
Rate 4%

Monthly payment 285.02

Balloon due on term 51,662.29

B.

Price 92,500

Down payment 36,800

Note 55,200

Term 5 years
Rate 4.5%

Monthly payment 279.69

Balloon due on term 50,598.87

C.

Price 85,500

Down payment 34,200

Note 51,300

Term 5 years
Rate 5%

Monthly payment 275.39

Balloon due on term 47,383.53

From what I gather common terms are 5/7 years on balloon mortgages. This seller is a professional.

Rates? With 30 yr fixed rates at sub 3 as of this writing I think that should be attractive.

Price the 99500 is full asking. So I dropped it as I wrote more favorable terms. Thoughts on the market? Don’t be shy I would love some input, what do you guys think of this market? Thank you!

 Once you get past Olympia the job market starts to dwindle off. That said Olympia is only a 30 minute commute and I know several people that do so Monday to Friday. Shelton is nice and there are defiantly good investments that way.

How did the market treat you in the last two years? Did you get your foot into the Mason county market?

It's a shame what is happening in parts of this state. I still think it's a good place for investment property. Washington has a bright future. I'm happy to hear everyone getting involved and standing up for what's right. With all the input, hopefully we can keep Washington from becoming as dodgy as California or NYC...