All Forum Posts by: Khari F.

Investment Info:

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

Purchase price: $134,000
Cash invested: $155,000

My strategy in this deal is BRRR.
I've got a 3.75% interest rate as a foreign investor.

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

Cash flow and below-market price

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

Through realtor - was an off-market deal

How did you finance this deal?

Cash

How did you add value to the deal?

Renovation and negotiation

What was the outcome?

Excellent BRRR - money will get back after 3 years

Lessons learned? Challenges?

The biggest challenge - is finding the right deal

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

Relator that works with off-market deals

 Hey Jordan, 

When you talk to these lenders, do they give you a fully underwritten quote? 

The best ones do this. 

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $150,000
Cash invested: $10,000

Purchased this property as a minor fixer upper to rent and hold.

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

MLS. Negotiated price down through the inspection process by obtaining market quotes for rehab costs. Saved by doing much of the work myself.

How did you finance this deal?

FHA Loan

How did you add value to the deal?

Rehab.

What was the outcome?

Property Cash Flows great! Learned some tough lessons by not fixing things right the first time along the way.

Hey all!

I was hoping to get some insight... I've got about $10,000 on hand and would like to get my first rental. I recently purchased primary residence and I'm not sure if any of the low down payment options would be available to me. I'm in the Denver market, looking to invest here, Houston or Atlanta. 

Hi Joel - thanks for heads up! Here's the relevant paragraphs below:

12. PROFESSIONAL INSPECTIONS AND INSPECTION NOTICES: Buyer may conduct at Buyer’s expense (unless payment for such expense is otherwise required by governmental regulation) any or all of the following inspections of the Real Estate by one or more licensed or certified inspection services: home, radon, environmental, lead-based paint, lead-based paint hazards or wood-destroying insect infestation, or any other inspections desired by Buyer in the exercise of reasonable due diligence. Seller agrees to make all areas of the Real Estate accessible for inspection(s) upon reasonable notice and to have all utilities turned on during the time of such inspections. Buyer shall indemnify Seller and hold Seller harmless from and against any loss or damage caused by any acts of Buyer or any person performing any inspection on behalf of Buyer. a) The request for repairs shall cover only the major components of the Real Estate, limited to central heating and cooling system(s), plumbing and well system, electrical system, roof, walls, windows, doors, ceilings, floors, appliances and foundation. A major component shall be deemed to be in operating condition, and therefore not defective within the meaning of this paragraph, if it does not constitute a current threat to health 170 or safety, and performs the function for which it is intended, regardless of age or if it is near or at the end of its useful life. Minor repairs, routine maintenance items and painting, decorating or other items of a cosmetic nature, no matter the cost to remedy same, do not constitute defects, are not a part of this contingency and shall not be a basis for the Buyer to cancel this Contract. A request by Buyer for credits or repairs in violation of the terms of this subparagraph shall allow Seller to declare this Contract terminated and direct the return of Buyer’s Earnest Money. If radon mitigation is performed, Seller shall pay for any retest.

Buyer shall serve Notice upon Seller or Seller’s attorney of any major component defects disclosed by any inspection for which Buyer requests resolution by Seller within five (5) Business Days (ten (10) calendar days for a lead-based paint or lead-based paint hazard inspection) after Date of Acceptance. Buyer shall not send any portion of the inspection report with the Notice provided under this subparagraph unless such inspection report, or any part thereof, is specifically requested in writing by Seller or Seller’s attorney. If after expiration of ten (10) Business Days after Date of Acceptance written agreement has not been reached by the Parties with respect to resolution of all inspection issues, either Party may terminate this Contract by serving Notice to the other Party, whereupon this Contract shall be immediately deemed terminated.

c) Notwithstanding anything to the contrary set forth above in this paragraph, in the event the inspection reveals that the condition of the Real Estate is unacceptable to Buyer and Buyer serves Notice to Seller within five (5) Business Days after Date of Acceptance, this Contract shall be null and void. Said Notice shall not include any portion of the inspection reports unless requested by Seller.

 You pay interest, you can deduct it.   You have every tax advantage of owning a rental.

Dodd Frank has a provision that if the sold house but debt is still in the sellers name is current for 12+ mo that debt does not count against the borrower (for a new mortgage).  BUT as any dusty corner of statute and regs its up to the lending banks underwriters to know this.  Its best to shop for a lender who's competent at hair ball closings.  I like swbc.com for rental and hairball borrowers.

I have NEVER had a seller contact me later to ask for help or complain that the debt is still in their name.

Sub to is my only focus right now. From now till who knows, several years, will be one of the best times ever to market to stressed owners to buy sub to. IE FSBO, Expireds (just failed an MLS listing), divorce, when these sceenarios are combined with low years of ownership (low equity) the sellers can't sell any other way but via an investor taking over their payments so they can move on. Every sub to I buy has some hair ball issues that prevent selling on MLS;

- low equity such that offers did not cover the debt + costs of selling (figure 10%).  = stuck

- they just hate agents due to bad experiences so they refuse to list and try FSBO. There are folks who just hate agents.

- Divorse and need to sell fast.  

- Probate sometimes has debt.  I only go after deals where the debt is over 70% of the value.  IE I don't want to put mjuch cash out to close.

- Pre forclosure.   FWIW this is a VERY VERY hard deal scenario.  I reco new folks stay away from pre forclosure.  So many leads above you don't need to approach these folks.

I have a sub to training doc complete with doc examples of how to close.   Connect then PM me.