All Forum Posts by: Jairus King

Thanks @ ,

   That was kind of the thought I had. However I do feel bad in getting approached by wholesalers looking to build their list, knowing that most likely I wouldn't be interested in what they have to offer. I was just wondering if there was a way to make it work... Likely not.

Good afternoon BP!  

I primarily deal in finding SUB to deals in Richmond VA. The start of the year has brought an influx of wholesalers. This would still require me to bring 20% to the deal for financing. Would it be too picky to advise wholesalers that I am primarily looking for sub-to properties? Are there any wholesalers that work these types of deals in the area?

Thank you for the input everyone! @Chris Mason - I do appreciate the consideration, but we do need to factor in a couple points on that strategy. First the assumption that bruised credit= late rental payments is simply not the case. Each person must be evaluated and measured on a case by case basis. For example- in one of my lower end properties the tenant had bruised credit because of a divorce. He is still working, divorce is over and he is able to continue his life. He had some credit card balances and a few charge offs in collection. That is enough to hurt him substantially, but he is able to bounce back over time if he works at it. Though I understand your point in how this substantially raises the level of risk. Secondly there is an assumption that I am targeting  "new tenants". I may have not been clear in my initial posting. I am converting agreements over to lease -option, which means that my tenants have already been in place for about 2 years. If this is the only exit strategy I could see your point, but I would like the opportunity at having an option than to just plain rent for now.

Good morning BP!
       I am changing my strategy from simple rent -to Lease option. As a result I would like to find a Broker or Lender that is used to working with troubled credit so that I have a higher opportunity of getting my tenants qualified and capable of exercising the options.

Well so far we are inching forward in the deal. He claims that it wasn't part of the bankruptcy and sent me the paperwork... Only weird thing is I really can't tell what this means as the paperwork doesn't really itemize kinda like I thought i would. I am guessing that the title search will reveal if there are additional liens on the property. I have the real estate attorney checking into it as well. Worse case is that if there is a BK lien by the trustee then I can simply buy it from myself after awhile for the market value or balance. (There isn't a huge equity spread 10K), but there are long term paying tenants, no repairs needed, and a good neighborhood.

Okay gotta a few updates just by looking around. Hope this at least helps a little. It really seems to depend on the status of the BK. In my case it was discharged, which is good however this doesn't mean the case is closed. Additionally common consensus is that if the lender stills has the loan they still don't want a foreclosure and will likely accept efforts to bring the loan current. This part of the sub 2 deal would work. BUUUUT- The concern that I am looking into now is what happens when we try to sell? If there is a lien on the property or based on the terms of how the BK ended any proceeds could be taken to satisfy the owner's debt. So in changing the exit strategy perhaps I end up on the hook after renting the property out for a number of years to simply purchase it for myself and keep it as a performing rental. Thoughts anyone?

I would love to hear more on this issue... I am in the same boat. Owner is single and went BK. The property is behind 4 months. Similar to you in a sub 2 deal we would catch him up. They are trying to sell, but its not happening in manner were he pays the balance of the loan off, maybe short sell or they take a loss? Currently I am in preliminary talks with the Portfolio manager to determine if we "can" get the loan current and performing again. Ill keep ya posted with mine.

Hey Stuart! Great to meet you. How do you like Lynchburg? I seen a couple deals out there, but had never bothered. The real estate appears a bit cheaper though. 

Good morning BP Fam!

       I have been searching a few resources, but was interested in hearing if anyone had any lender recommendations on the refi side of house on rental properties? I have 27K in and wanted to cash out a little and still be at about 45K. A few lenders won't go below 50K, conventional banks of course want you to be on the deed. I do have a couple of out of state lenders that may fit the bill, but again any recommendations would be most appreciated on at least a 10 year long-term/fixed loan.

Hey there Chris!

   Congrats on picking up your first property. I have one located there as well and am working on a second. I'd be curious to hear how things worked out with section 8 so please keep us posted as I am not familiar with their requirements, but would love to hear about it. With that being said:

The biggest question without knowing too much about the property is.........Does the ARV suggest that you can get your money back? You will certainly overbuild if for example the property is only worth 55K and you have blown that much or over in purchasing and rehabbing. Determine how much the property is worth and then try to keep your leverage. One thing you can do is simply bypass section 8 all together until you feel like your ready to deal with that. In regards to your other questions.

2) You will have to do something about the deck if it is a hazard. You can eat that cost up front or simply demo it and rent it to someone other than section 8. When you make your money back..Then consider adding it. 

3.)  I generally go basic tile, simply because it last longer. Again this all depends on how the numbers look to you. It there isn't anything that "needs" to be replaced ...Hold on it..It is an investment and you want your property to attract good tenants, but prioritize the work and then do what makes sense in the budget. 

One tactic that I do is stagger my upgrades and work. I get all the basic and must-do items completed first. Once my tenants are in place I deliver a letter showing the quarterly work to be done. A house always has something that could be done. It seems to go well with them because they know I am taking pride in my property. Generally they find less to complain over because they know in a few months something else will be maintained, checked, updated, swapped.  Just my 2 cents man good luck!