All Forum Posts by: Ken Jernigan

@Daniel Brown I've been involved in several SS deals like this in NC and SC. PM me if you want to discuss.

You need to make sure there are no issues with underground storage tanks. I've been involved with financing more than one C-store acquisition that went south due to the cost of remediation.

Make sure you comply with all local zoning and permitting for duplex.

New regs address this. When a property based on square footage has a substantial amount in the OZ as compared to that outside the OZ and it is contiguous, then it's all in the OZ. Lots of write ups on this online.

Community banks and some credit unions do this. It'd be a good idea to start a relationship with a local lender.

Some credit unions do, some don't. You just have to ask. Many won't fund repair costs, and need at least six month seasoning. 75% LTV and no LLCs. Start dialing for dollars.

Rate seems about right, but you also need to consider LTV, term and amortization--all of which affect your cash flow. Too many get hypnotized by the rate when it's cash in your pocket that determines the value of a deal.

FHA 203--you'd have to live in the house. Also they need a GC for improvement costs above $35K, adds to approval time and increases paperwork.

Hard money--90% acquisition and fix up costs, up to 70% ARV. One year loan at 11-12% interest only plus 2-4 pts up front. Should have exit plan in place--sell or re fi.

Some conventional lenders will not fund repair costs, but your first stop should be local banks/credit unions. CUs tend to have better terms. LTV should be 75-80%, 25-30 year amort.

These are pretty standard terms, comparable to commercial lender. Most commercial lenders, though would want a larger downpayment. Probably not an issue for seller financing, but make sure there are no prepayment penalties.

You can calculate payment and balloon amount easily enough with excel or google sheets.

Mold is pretty common. Some are affected by it, others not. Mostly it hits infants, or those with compromised immune systems, like the elderly. You should inspect the mold yourself. If it's really bad, it will be obvious, on joists, rafters, wallboard, pvc, wiring. It can affect structure if it gets inside the walls.

If visible it can be removed with any commercial mold killer. But if the source of the mold, like a water leak, condensation from an HVAC, or roof leak is not fixed, it will just return. I'm not sure what a mold inspection letter gets you in this case.

Mold killer, mold test kits and humidity indicators that test for dampness inside walls can all be had for a reasonable price online.

I had mold in my crawlspace due to a leaky HVAC. Mold was cleaned up, and HVAC replaced, but the problem wasn't really solved until I installed a dehumidifier and sealed the crawlspace.

Good luck.