All Forum Posts by: Lee Haenschen

I'm considering going to marketing route to try and find below market deals on single family homes and a few duplexes. 

Going that route would it be a wise decision to have financing setup before I even start the marketing campaign? In order to have the ability to act quick on any deals that do come my way I'm assuming I need to have a line of credit or something ready to go for a quick closing? I just know from experience that it took 2 months to get to a closing date on my own personal property. We had to send the SAME financial information to the finance company every 2-3 weeks.

Good info!! Yes me and my wife are looking for passive income. Our goal is to achieve enough income so that she can quit her desk job and take over property management duties of our future rentals until it's to much for us to handle. Then we will pass off the management to a property management company .

I'm very new to the market here, so please go easy on me! 

I've read a lot of books and a ton of BP podcast and everyone makes this stuff sound easy.

http://www.greatercarolinas.net/index.php?action=l...

Above link is a property that I wanted to use as a example to help myself learn what numbers are important to run on that property to see what needs to be my offering price to make it a good deal.

From all my reading I understand that you can't buy anything at market price that it needs to be considerably below market price. How do you understand what market price is? Just my opinion that most put an inflated price on the homes when they are listed.

Just running some vague numbers on the property above.....with me knowing very little about what I'm doing I'm missing a ton of important numbers here.

Asking price is $139,900 for the duplex (homeowners pay their own utilities btw) 

Lets say I offer $130K and pay half of closing costs. In a perfect world I would get a mortgage interest rate between 4.5-6% with 20% down with escrow my payments would be around $777 per month + withholding around $150 per month for maintenance & $75 per month for vacancies. 

IF the rent is $550 per unit that would leave me with $98 per month total cash flow. And im sure that would get gobbled up by some other % that I didn't equate for.  I tried reverse engineering the numbers to figure out what I would have to offer to make it profitable. It seemed like around $85,000 would be the magical number. I know getting deals at far less then market value is the name of the game, but how do you go so low on an offer without the realtor saying don't bother submitting the offer, your ridiculous....get out of my office! ?? 

Jesse thanks for the good info the lima one sound like a good option to look at. 

Brent - Our current home is a house me and my wife built on 5 acres here in midland nc. We've lived here 2 years this past May. Bought/built the house for $210,000 on 5 acres of land that was gifted to me by my mom for only $1,000 . I don't have accurate figures on what our home is worth other then zillow claims $265K. Which can't be completely accurate? Since we built the house I have added a 2,600 square foot shop to the property that I paid $43K cash to build out of my own pocket. And the land appraised for $40K which we used as equity to not have to put a down payment on our home. So I would assume we have roughly $60-80K in equity. Our loan is paid down to only 205K now after 2 years.

I think I have convinced my wife to go the conventional mortgage route for our first few rentals just to get the lower interest rate. With all the figures I've ran on about 20 of the prospective homes it looks like if we took a hard money loan at 10% that we would be cash flow negative until we refinanced. Which doesn't sound like a smart move from the beginning seeing that we don't have a lot of money to get us started. I have about 8K saved up towards a down payment and my wife thought she had 8K saved up until she found out that she can't cash out her lousy performing 401K until she quits her job. So this sets us back a little bit until I can come up with another 10K to cover 20% down and some minor repairs to get a home ready to rent. My wife has maybe $20 to her name after all bills are paid every month. So I'm more or less on my own for saving money to get our new venture on the road. 

Thanks again for the ideas guys! 

BTW, we have considered getting a HELOC to get a foreclosed home cash. That way if we can flip the home with a respectable amount of money left over we would possibly have enough money for a down payment on our first home. I'm constantly searching the market to see which idea would work the best.

I haven't quite got things figured out enough to buy my first rental property.  So far the department I have the least confidence in is the finance side. IF I get a hard money loan to get me & my wife started into the rental business and it's time to refinance to get a lower interest rate and pay off the hard money loan before the deadline. What direction do you go from there? If I want to keep my personal credit out of this new business venture, what options do I have? From all my reading there is a limit to how many homes you can buy on personal credit before your debt to income is tapped out. If I want to have 200 rental homes one day, I'm sure ill need a different type of loan to achieve this then a conventional mortgage tied to my personal credit? 

I realize this might not be as important when doing the first deal, but I definitely don't want to get started by heading down a path immediately out of the gate. 

from my reading it sounded like you had to put up a $2500 deposit before you could actually even bid? 

Besides closing cost what other fees are associated with a transaction on auction.com? 

Is there anything to be aware of when bidding on Auction.com? Looking in a 40 mile radius of my house I've found several favorable deals. Some look to good to be true.

I've seen several homes that are valued at or around $200K with a starting bid at $50K and with less than 24 hours left on the auction they are only bid up to 80-100K. Looks like a quick way to make money if the inside isn't trashed. Could clean up the yard and to some routine maintenance on the inside and re-list with a local realtor?  I guess the main down side I see is that they are cash only auctions and you must have funds ready to go before you bid. 

I'm new to the board and very new to home buying. I haven't invested in any homes yet....i'm just doing my research before I bite the bullet. I have been reading 1 audio book a day and sometimes re-reading the same book multiple times a week.

My goal is for me and my wife to purchase 2-3 homes a year to rent and 3-4 homes a year to flip for extra income. My wife has a steady job that she absolutely hates, and I have steady income from owning a small landscape company. We have 2 children and are looking to expand our future so we can spend more time with our kids. I currently work 60+ hours a week running my business and I'm currently looking for a new manager for my business to take my place so I can spend more time with family and starting a real estate investment business.

On to my questions: Of all the books I've read I haven't seen any of them touch on the subject about financing foreclosed homes or non-foreclosed homes in depth. My concern is that I know after 4-5 homes that my credit would be tapped out. My debt to income ratio would be at it's limits, which in turn would limit my ability to acquire more homes. 

I had a drug addict employee that ruined my credit by using my SSN# and steeling money from my company. That was 7 years ago and much of that time I spent rebuilding my credit. It took 7 years to get my credit back into the high 700's and I don't want to jeopardize my credit power with filling it up with rental properties. 

Can homes be purchased in a corporations name to keep my credit clear for personal use? I'm not greedy, but with many years spent repairing it I worry if buying homes would ruin my ability to use my credit for personal use if I ever needed to get a new car etc...

Me and my wife have no car payments, no credit card debt, no store cards. Just mortgage, cell phones, insurance and related house hold expenses (besides mortgage) 

Any help offered would be greatly appreciated. If someone could point me in the right direction that would be great! I did talk to my personal bank that I've used for 10+ years and was VERY disappointed when the woman in the finance department tried to talk me out of buying investment properties! I've read way to many Robert Kiyosaki books to fall for the bland trap of CD's, mutual funds etc... that she insisted I invest in.