All Forum Posts by: Kory Thaut

@Evans Wright Well said.  I am in a somewhat similar situation where I am buying a duplex from an elderly couple that have house hacked it for the past 30 years.  They don't want to be landlords anymore and they don't want to move and they want to cash out the equity.  I'll cut the story short at it's a win win for everyone but agree, the praise and the helping of people can mean more than the monthly deposits.  

@Bevla Reeves Both the agent that I use locally as well as the agent I use in my out of state market each invest in real estate themselves.  It's a different type of conversation when they're looking through the investment lens with experience.  

@Bill Black I live in Oregon but just put a duplex in Washington State (your side of the mountains) under contract. Given the distance from me and the fact it was an owner occupy and the owner wanted to do a lease back, I created my own letter of intent that modeled the BP one (link below). I might do this more going forward now (non MLS in the current market) as it made the whole process so much clearer and smoother.

The P/S agreement does not have to be a state specific form(s).  I've done both purhasing and selling in both Oregon and Washington with my own contracts. 

@Pete Perez BP LOI template: https://www.biggerpockets.com/forms/intenttopurcha...

@Brandon Kessler I am currently working on a lease back situation with an owner occupied duplex now. I used an LOI with an attached comp list of sales and rent data from the area. Using the LOI and comps helped us both feel good about the details for both agreements before either of them were drafted up. As part of the LOI process, we agreed to put high level rental details into the purchase agreement to confirm the sellers option to stay. This included language something around the lines of "At time of closing, Seller has the option to lease back the currently occupied unit for $x,xxx a month for 12 months, WSG excluded" (paraphrased)

As we near closing, we'll finalize the actual, legally binding rental agreement for one of the units and I'll inherit their current tenants in the second unit.  

This doesn't help you on the FHA portion but though it might help re: if you do decide to put more down and lease back. As @Brent Coombs outlined, COC of 21% isn't too bad either.

@Account Closed I am also a big fan of Dave Ramsey... but not all of his steps.  I believe his term is "debt is not a tool".  The only debt that I believe is good debt (or a tool) is the kind that pays you a profit (e.g. real estate leverage with good returns).  I've never believed a primary home is an asset so I have a really hard time with the idea of a primary mortgage being considered good debt... necessary in a lot of scenarios, but not good debt to hang on to.  

My approach is to use lending to get my positive cash flow deals secured and then use the positive cashflow to pay down the properties as I want to live off the NOI sooner than 30 years. I also still like my W2 job so the majority of the business growth still comes from those contributions. With that said, a lot of people here would disagree with this approach.

Just my 2 cents.  Glad you brought it up for discussion.  

@Jeff Hamlin Congratulations on door #2.  

On a side note, if door #1 and your primary are in Happy Valley, that's not too shabby of a place to be in.. Just read in the Portland Business Journal that Happy Valley is the fastest growing city in Oregon (5 year growth rate).  Between that and KC baseball and BBQ, life is good for you. Congrats.  

@Kimberly Rice @Larry H. The quitclaim deed does void the original title insurance.  It would be advised to have instead drafted up a warranty deed.  The quitclaim is very popular b/c it's so easy for one to draft up and do on their own for a couple bucks.  

Got it.  I've only invested in <=4 units but still use a cap rate for valuation across properties (sounds like you do the same).  I keep detailed proformas and even on the SFRs, I run a "cap rate".  :-)  I've always figured  it a.) helps me keep score and b.)will help tremendously when I go to sell.  

@Aimee Knier Congratulations on getting under contract.  I think you're in the drivers seat now so it's really making sure the numbers work and if they don't, move on to the next.  In my opinion, it's important not to let irrelevant variables such as back-up offers or the fear of a seller not accepting a counter influence your valuation process. No deal is better than deal you don't feel good about. The nice part about multi-units is you have all the data you need, it's just a matter of crunching it. 

@Account Closed excellent points.  Curious about the comment re: cap rates not supposed to apply to duplexes?  

@Account Closed does with beer but I usually leave a little beer in a beer can (after drinking the first part of course) and then lay it flat on the ground with the can mouth at ground level.  This protects the beer from rain/sun, etc... and makes for easy disposal.  My kids enjoy seeing how many we "caught" the next morning.  

With all that said, slugs indoors is probably an indicator of something else, moisture related.