All Forum Posts by: Lance Nelson

Newbie here... I'm likely going to make an offer on a duplex, but am trying to figure out how to structure the offer for an owner carry contract. The man is the sole owner of the duplex and he is in one of the units. He is paycheck to paycheck and trying to rent out the other side right now. The place is probably worth $460,000 so he's sitting on a good amount of equity. He has another lot that he wants to build on at some point, but doesn't have solid plans yet. The offer I'm thinking about would be for $460,000 with a 10-20% down payment and 3.25% interest on the remainder (owner carry) with a balloon payment at 3 years. We are doing this to have 3 years to secure financing (long story). The guy still needs a place to live so I'm thinking about writing a 3-5 year lease into the contract. Anyone have experience with this type of thing? Thanks!

@Michael Gilman

@Eric Snyder

Thanks guys! I'm going to reach out to a few banks on Monday just to ask the questions about commercial loan options on a duplex. I really appreciate it. 

@Kurt Lane Thanks for the response! The taxes and insurance are built into the line item that I titled mortgage. I'll need to look into the water meter to see if it's split and I should probably at least account for paying garbage. This was really helpful though, thanks!

@Joe Villeneuve Here are the numbers I came up with. I'm still figuring everything out so let me know if I missed something or if this is a terrible deal in your opinion. It's in a very desirable area just outside of Portland. Thanks!

I live in Portland, Oregon and recently quit my job as a Physical Therapist and became a real estate agent. My wife is relatively new real estate attorney. What I didn't totally comprehend when switching careers was how it would affect my ability to buy properties because the commission based nature of my new gig. My wife makes good money and it's only going to increase, but because of our current DTI (mortgages open one rental property and our current home) we are not financeable for our next project. The bummer is that I've found a duplex that I really want to purchase off market and the bank is saying we can't support that because of DTI. Any ideas for how to make this deal happen? I thought about offering cash for a co-sign, does anyone have experience with that? I also thought about bringing someone else into the deal in some capacity, but am not sure how that's typically structured. Any ideas would be much appreciated!

@Bruce Dashiell Kallaher Thanks for the response. The lender sent over a dispute form that I’ll fill out, but I doubt it’ll help much. I think you’re right about getting another appraisal, now I’m just up against the clock for the rate lock to expire. 

@Joel B. thank you! I bought it in 2017, but it ended up working out great! I grew up in Happy Valley and it has CHANGED!

Investment Info:

Single-family residence buy & hold investment in Happy Valley.

Purchase price: $269,000
Cash invested: $5,000

This is my first home that I turned into a cash flowing rental.

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

Just to get in the game!

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

Found on the MLS with a realtor. It appraised $13k under our offer price and the seller reduced the price.

How did you finance this deal?

FHA loan

How did you add value to the deal?

New siding, painted cabinets, new luxury vinyl floors, landscaped, painted interior and exterior.

@Scott Mac Thanks for the reply. We're planning on the property for a long time and this neighborhood is the next "sprawl" from Portland so I think there are a lot of ADU's, etc. popping up here. It's a tough decision.

Does anyone have any experience with the process of disputing appraisals? I recently got a report back on a property that I was planning on doing a cash out refinance and I disagree with the appraised value. Not sure if it's even worth going through the dispute process vs. just paying for another appraisal. Thanks for the help!