All Forum Posts by: Louis Zameryka

Hi Jaron, thanks for replying. Maybe I was not clear enough in my post. The parents want to help. So they are open to finding a workable solution that achieves the following. 

Kid pays off some of their debt via selling home. 

Kid pays them some $ so they (parents) can rehab their own primary

Current investment property still cash flows for them but new main tenant is their kid, and that payment from their kid is basically like the kid buying equity into the multifamily home (which likely was eventually going to be partially an inherence for the kid). The kid also has to rehab the multi family on their own dime (at least their unit). 

I agree completely about hard work, and tough decisions. Which is why I am trying to help them figure out their own solution, rather than just giving them both the $ they need. 

Does this help inform any new points of view in your reply?

Here’s a situation that one of my relatives is in.

If anyone has advice or experience I’d appreciate it.

I have a family member that is in a bad spot. They have personal loans, heloc, and mortgage they cannot pay based on a newly reduced household income.

Their parents want to help but also have shakey finances.

However his parents have a 2 family investment home, that is free and clear of debt (in addition to the parents primary) but the parents need income from that home for their retirement (now) and also both the parents primary and the investment property need rehab soon.

I'm trying to think of a way where maybe my family member can sell their own primary, use the equity to pay off some of the highest interest of debts, then pay their parents some equity that allows the parents to renovate their own primary, then my family member move into the multi family as a tenant, but also pays a bit more than normal rent, so the parents get the cash flow they need, and maybe the "rent" is at least a portion of it rent to own, (in a way that limits taxes for the parents?) maybe via an LLC the house is put into where my family member gains shares of ownership annually over time?

Am I dreaming that there is a playbook for this?

@John Underwood I’m out of inspection window. Let me ask this, does any of this matter if my investment thesis has the unit cash flowing significantly +$2500 a month after expenses in 2 years and as a result if that cash flow, being valued at 30-35% more than it bought it for?

I'm under contract for a condo for STR and I underwrote with a typical mortgage but my lender just came back after my initial approval to tell me that as of Jan this year Fannie and Freddie now consider the development to be a condo hotel. Which makes this a Non QM mortgage and more expensive to close both from an interest rate and fee point of view.

My offer to the seller included a $5000 deposit that was not contingent on financing. So I lose that if I walk.

The original underwriting would have lost me $50 a month for 18months this new version means $11k more in fees and about $150 a month in losses for 18 months.

Any advice for what I should do?

What additional info can I provide to help folks share advice?

Thanks

Has anyone bought a STR in the town of Shandenken since their horrible STR rules went into effect and they passed their non- resident cap of 150 STR permits?

I see that if you have an Ulster County Temporary Housing permit you are exempt from the towns rule. I’m curious if anyone has done that workaround yet?

Thanks for any advice

@Louis Zameryka

So as an update for anyone interested.

I found a realtor to help me via Bigger Pockets.

He made contact with the sellers agent. They do not want to do the Subject To and are sticking with their high asking price (a previous deal fell through because the buyer could not sell their own house) the other agent said the house appraised close to asking when the other buyer was doing their inspection etc.

So the owner wants to wait to get their price and says if they cannot get their price they will just rent it out.

I’m doubtful they will get their price, or that local rents would make it attractive to rent it.

The owners already moved out of state to live with family and are currently unemployed so I’m just going to be patient.

I asked my realtor to offer them $260k cash and tell them I’ll be here to buy it with a 30 day or less closing time whenever they are ready.

Any thoughts?

Thanks again. To everyone who gave a reply with some advice.

@Jacob Sloop

Thanks man.

Quote from @Chris Martin:

Jacob, if you re-read my post, the CU policy uses the word "assumption" (in their (old) four-item Policy Statement) because they don't recognize "Subject-To" transactions.  In the Deed-of-Trust, it's Section 18 that explicitly prohibits Transfer of Property (FNMA Form 3034). My post is just answering some of the questions the OP presented. Note that "Subject-To" is not a term recognized much outside of real estate investor's circles, and on an OTP contract the line item associated with the purchase price will contain the word 'assume'. 

I would suggest getting lender approval, which means having Section 18 waived in writing. If we call that "Subject-To" then we are on the same page.

 HI Chris. Thanks already for your time and your thoughts. My plan was to avoid speaking with the Credit Union entirely. From what I have learned so far (watching Pace Moby videos and similar) The idea is to avoid that the lender even knows someone new has the deed. 

That seemed low risk from the content I've seen, but it seems like maybe you know more about how this works with Credit Unions and maybe they have some specific protections to prevent this? 

@Jacob Sloop I am also curious to hear your thoughts. Thanks again to both of you for your time already. 

Quote from @Lyndsay Zwirlein:

Check out Pace Morbys content on YouTube. He also has a Facebook group. This is exactly what he teaches!

 Yeah I did listen to about an hour long BP Rookie podcast with him and also watched a video. My partner on this deal probably watched like 7-10 hours of him recently. Ill catch up :) 

Quote from @Patricia Steiner:

You need a realtor to represent you; as a buyer, you don't pay commissions so why not add the bench strength. Here's what you need to explore beyond the loan assumption issue:

1. Is the property zoned for STR? What is the industry average for STRs in that market - time occupied as well as average rate? How will you pay to funish it and make the renovations if used as a STR? Will it cash flow as one?

2.  Why did the last deal fall through?  Did the property not pass inspection?  You need to know this.

3.  The mortgage currently on the property may  not be assumable.  Most are not.  If it is assumable, do you qualify.

4.  What is the property actually worth?  If it's worth the ask, what is the seller's motivation to just get their down payment back and walk away?  

Find yourself a realtor who works with investors to help you analyse this property in real terms and to seek information from the listing agent.  You don't know enough at this point to make an offer of any kind.  Get some bench strength first...

Thanks for the good questions Patricia. You are right. I will look for a local realtor that may have experience with owner financing of this sort and maybe even know the local STR codes. I have researched them and there is no restriction. As for occupancy the plan for today is to research that on mashvisor or airdna. I did a conservative back of the envelope using Airbnb and Vrbo and it looks like it will cash flow. 
Ill use cash for rehab and to furnish. I put $20k in for that into my underwriting. 

I'll also check on the last deal and why it feel through. It could be a buyer issue becuase it was only in pending status for about 7-10 days. I will check specifically though. 

I am assuming that the subject to I will do does not involve directly assuming the mortgage but instead getting the deed from the seller and paying their mortgage as if it were mine. 

Thanks again for the advice.