All Forum Posts by: Kevin Quintanilla-Toledo

Hey guys I was looking into properties which are owned free and clear. I was wondering if I put in an offer and requested seller financing could I use a loan like FHA, Conventional, etc. for a down payment? For example a property is for sale at 200k and I request seller financing offering 200k with a 50k down payment. Could I use a FHA or conventional loan for the down payment? What are the risks for the seller if for any reason the property forecloses? What are possible benefits for the seller? Thank you in advance!

Hey guys I was looking into properties which are owned free and clear. I was wondering if I put in an offer and requested seller financing could I use a loan like FHA, Conventional, etc. for a down payment? For example a property is for sale at 200k and I request seller financing offering 200k with a 50k down payment. Could I use a FHA or conventional loan for the down payment? What are the risks for the seller if for any reason the property forecloses? What are possible benefits for the seller? Thank you in advance!

@Tanya Rooney 

Thanks! Yeah I got lucky because the numbers don't make sense for most of the properties in this area and this is a multi family. Yeah I have seen a lot of chatter about the refinery guys and them needing furnished rentals. Honestly the VA loan is amazing and if I didn't have that I wouldn't be able to acquire the properties I have.

Investment Info:

Small multi-family (2-4 units) buy & hold investment in Rosemount.

Purchase price: $350,000
Cash invested: $800

I owner occupy one side and I pay 800$ for my side and the tenant pays 990$ on the other side. Unit A is a 2 bedroom and 1 bathroom but the basement is livable and could be converted to a third bedroom. Unit B is the side I live on is a 4 bedroom and 2 bathroom. The cash I invested was actually only for the inspection and the appraisal. I used the VA loan to buy this gem. The monthly cash flow is actually negative but when we move out the monthly cash flow will be $1250.

What made you interested in investing in this type of deal?

I have owned a townhome and a single family property previously. I currently have one single family home which is currently rented and I wanted to expand to a multifamily property.

How did you find this deal and how did you negotiate it?

I found this deal on the MLS and I did very little negotiating because the seller was very motivated.

How did you finance this deal?

I used the VA loan.

How did you add value to the deal?

I was very confident and I explained to the seller's agent that I did not want to play games and nickel and dime the seller. I knew what I wanted and offered a fair price in the time frame that I said I would.

What was the outcome?

An executed purchase agreement!

Lessons learned? Challenges?

Communication was huge! I felt like the deal had its challenges such as bad tenants. The side we were trying to move into had tenants who where difficult to work with. We had to move the closing date one time to allow them to move out even if it was past the agreed upon time. The property ended up having a main sewage line issue which we worked around but in hindsight I should have done a more in depth inspection specifically on the sewage line. But the issues were fixed even after we closed.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

I represented myself as a buyer's agent and heck yeah I would recommend myself!

@Chris Mason Do you know how this could effect buying a second or third home with the VA loan while keeping the first home that was purchased with the VA loan? I know people refinance out of the VA loan usually to a conventional loan but will that be necessary now?

@Tim Swierczek @Tanya Rooney Thanks you guys! I have a couple properties but definitely looking to grow. 

@Tim Swierczek Here is the link to there website 

https://www.navyfederal.org/loans-cards/mortgage/mortgage-rates/

It is a loan for Military members who have already used up their VA loan and reached their loan limit well when there was a limit on the VA Loan.

Investment Info:

Single-family residence buy & hold investment in Saint Paul.

Purchase price: $93,000

This was my first single family home purchase and I bought it with a 0% down military choice loan (different than VA loan). I have put in $14,000 to fix it up and getting it rent ready.

What made you interested in investing in this type of deal?

I just separated from the military at the time I already purchased a condo in CA. I had most of my money tied up in my condo purchase. I moved back to Minnesota and my parents place was too small for my family of 3 at the time. This was more of a necessity for my family and I.

How did you find this deal and how did you negotiate it?

I went through a family friend who was a realtor but she said that the only homes she could find in my limited budget of $110,000 was about 1.5 hour commute. So I looked myself and found this little gem in the heart of St. Paul, MN. The home was at the 21 day mark and the seller was motivated. I offered $5,000 under asking price and for the seller to pay for closing costs.

How did you finance this deal?

I used a Military Choice loan from Navy Federal Credit Union which is similar to the VA loan but its considered a conventional loan. The interest rate is usually not as good as the VA loan but it was a 0% down loan and it got me into the home.

How did you add value to the deal?

I ripped out the carpet in the living room replaced it with laminate flooring, updated kitchen, updated bathroom, and a fresh coat of paint.

What was the outcome?

We owner occupied it for almost 2 years and we loved the updates! I was able to charge $150 more than other properties near my single family home.

Lessons learned? Challenges?

I did not schedule out the updates very well. We were simultaneously about to close on our duplex and the closing was moved to the move in date of when our new tenants where going to move in. We underestimated the amount of work it would take to move and clean. For next time give yourself plenty of time to move and clean. Pay for more services like lawn maintenance, cleaning or just take some time off to get all of the tasks done.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

The only lender that I would recommend for members using the VA loan would be Navy Federal Credit Union. But the downside is they are only willing to lend for the member to buy up to a duplex.