All Forum Posts by: Kevin Siedlecki

@Doug Harman - I think you have to decide to either delay closing or charge them rent. You definitely shouldn't let them live there for free after you own it for a variety of reasons, including holding costs, and the liability falling to you to maintain the property during that time. You might be able to get the $20k written in as a seller credit at closing, if that makes it more palatable for them.

@Mikaela C. - Good question. I think you still have to go off the original purchase price, regardless of when the deed actually transferred, but I will be following to see what a tax expert says.

@Akiba Watts - What is your plan to come up with the cash in time to close? Maybe show the contracts for loans and account balances in accounts for the funds that you plan to draw from for closing. 

@Cory McCormick - A cash offer, by definition, does not use financing. That's a huge part of the appeal to the seller: closing quickly because the seller does not have to wait for the bank. You might be able to find a hard money or private lender to give you the money quickly, but that still isn't really in the spirit of a cash offer if you don't have that money lined up in advance.

@Will Schryver. I focus most on COC when I'm analyzing a purchase, and then once it's up and running, I look at IRR to consider whether selling or refinancing would make sense at any given moment.

@Laramie Hiebner - it's going to depend on your market, and the neighborhood. You might see 20% on paper, but very few places will really work out that well, because those really high returns are in really bad neighborhoods. Most of us on BP are looking for a low-double-digit COC ROI. I'm looking for at least 10-12% when I run the initial analysis. My real returns on the whole portfolio average about 14%.

@Frank Daly - 3.71% COC and only a $142 cushion in the math doesn't look like a good deal to me. I always say this on the forums, but it always matters: the assumptions we make in initial analysis are always flawed- there's just no better way. I want to have more cushion than $142/mo, and certainly better COC ROI than 3.71%.

@Todd Magin - I've not included tax returns as a contingency before, but I've also never bought a property this big. I buy smaller multifamilies all in the same small market, so I'm pretty comfortable with my guesses on expenses. They end up pretty consistent.

@Thoai Han - Can't hurt to check with some lenders - if only to ask what they'll need to see to qualify you for a loan.

@Benjimen Elliott Johnston - You have a lot going on here. I like the creative thinking, but a lot of things would have to line up for this to work. 

The first thing to consider is how the lot is zoned. In a lot of areas, it doesn't matter how big the lot is, if it's zoned R1, you can't do anything more than build a single-family house on it.

 If it is zoned another way, can it be subdivided? That's another question for your building and zoning office. 

If all of that works out for you, you'll have to find a lender to give you the terms you want. You might not get a strictly traditional mortgage, but I'm sure you can get something similar.