All Forum Posts by: Macie Moore

Josh VanLandingham I also wanted to make sure you were aware that there are licensing requirements to manage property that is not your own. So, if you talk to prospective property managers I suggest looking them up here: https://elicense3.com.ohio.gov/Lookup/LicenseLookup.aspx to make sure they have the necessary license(s). This is a helpful website if you want to learn more about the laws around property management: http://www.allpropertymanagement.com/propertylaw/property-management-law-in-ohio.html Once I get my brokers license, we will be going into property management for other investors' portfolios, so maybe we can connect down the line, but in the meantime, I suggest doing your due diligence to protect your interests before selecting a manager.

@Josh VanLandingham sure! Anytime! 

I'm from Urbana! I will send you a colleague request and if I hear of any good ones (we have begun meeting with local investors just to make connections) I will direct message you! We plan on self managing for now, but we definitely want to have some prospects lined up for when we make the jump! 

@Rich Baer thank you for your response! You're right, we are currently structuring a deal that involves "subject to" and its getting very clear how crucial it is to have an attorney who can advise on all different types of real estate transactions!

Hi BP Community! 

Me and my husband are newbie investors with zero properties in our portfolio, however we've identified (8) properties we would like to acquire in the next (6) months. One of these properties is a FSBO that we've been eyeing for a few weeks and we finally made an offer yesterday! Our first offer ever! It felt so good to get it over with! So here's some details...

SFR

3 Bed, 1 bath

1277 sq ft

Built in 1956, but upgraded recently with new HVAC installed and new roof as of last week 

Located on a very quite street. There are (12) houses on the street and I know for a fact (4) are rentals. One of which is another house we are trying to purchase, three doors down from the property I'm discussing here. 

The owner is a contractor, bought the house back in 2008 as a flip, ended up converting to a buy and hold and has had the same renter for (8) years, they recently relocated to a different state due to a job so the seller decided to finally sell. The rent was $800/month and the owner paid the trash. We believe that rent is below market value for our area so we are looking to rent the property for $950/month. 

So, we want to pursue seller financing and I thought this would be the deal that it could really work on because it is a current investment property so that made our argument stronger. After talking with the seller we found out there is a mortgage on the property which isn't as ideal as a free and clear house but we told him we could take the house "subject to" the existing financing and then his profit he would've received on the deal he can do seller financing and we could work out the terms. My main arguments for this are:

Since this was an investment property and not a primary residence, profits from the sale are going to be subject to capital gains tax. So, if he does seller financing he can receive his equity over time and shelter it from capital gains, and additionally he could receive more interest on the profits than he would depositing it into a savings account.  

All of our interactions have been through email, and we've gone back and forth on price and he's kind of ignored the seller financing and I think it's because he wasn't understanding what we were implying and so finally in the last interaction we spelled it out and said we'd be happy to meet with him and discuss and he has agreed.

So here's where I need you BP! What do you think? Are my arguments solid? Is there anything I'm missing and should drive home in our efforts to secure our first REI??? I really want to get this right, it might be our only shot!! Let me know if you need more information, I'd be happy to provide it :)

Thanks in advance! 

Hello BP, My husband and I have set up a meeting with a local firm that has "real estate and title agency" as a service. We've heard time and time again how important a good lawyer is in your success and how you should find one that understands your vision and can help you achieve it. For us, we want to mainly do buy and holds. So we are wondering what are some good questions to ask a potential lawyer to determine if they are a good fit for a real estate investor? So far, we are planning to ask if they have experience in the following areas: Rental agreements/lease options/land contracts Seller financing "Subject to" financing What else would be important experience for a real estate attorney to have? Thanks in advance for any advise you can give!!

@Daniel Dietz Oh! Yeah, okay I get it! Thank you for elaborating!!  

@Daniel Dietz thank you for the advice, that is a very interesting approach and one I could see using beyond just this deal!! One question, when you're talking about asking the bank for the 75k to pay off the existing mortgage and then 65k with a 15k down payment gift, would the 15k be applied to the 75k and would he have to give that to me up front then and I pay him back 65k based on whatever terms we agree to? Everything else makes sense! 

@Jon Lee we haven't discussed a down payment! I've told my husband it's something we should consider but his grandpa has not mentioned it so we could potentially acquire the properties with nothing down. If we don't have to tie up capital in this deal it would allow us to pursue other deals don't have that family connection and flexibility. I would think no money down would be ideal when possible as the ROI would be better. Is that an incorrect assumption?

@Account Closed that is excellent advice and something I didn't think about! We are still looking for a CPA and lawyer with real estate experience but your points make it even more clear we need to secure them before moving forward. The inheritance angle is very creative and something I never would've considered.

Thank you all for your responses, it's wonderful to have this community as we are starting out and I appreciate all the time you've taken to help us through this process!! 

Hi @Daniel Dietz! They mortgaged all three properties together for 74k in September of last year, the homes collectively are appraised at about $144,000. We are not exactly how much we want to offer them, but as you can see there is quite a bit of equity there. We are struggling a little with what our purchase price would be, on one hand we don't want to take advantage of the family connection to where the deal wouldn't be a win, win for everyone, but at the same time we'd obviously love to buy homes that have an incredible amount of equity going in. 

We were going to take the approach of "we will offer you x% interest, which is more than the bank would offer you, and you no longer have to worry about managing the properties or taxes and insurance" but I've never seen a seller financing offer and how it's structured. So, I'm a little lost on how to even structure the deal! Is there a common interest rate? LTV ratio? We do plan to hold them for the long run and do long-term fixed, ideally we would refinance them at some point in order to pay his grandpa off and satisfy that loan.

@Shawn Q. thank you for the response! The property description identifies them as "motivated sellers". So, I definitely think that they'd be willing to provide what we ask. I do get nervous about the age, but understand that that is the market I am in and just want to factor that into my deal criteria so I can act quickly and not be discouraged by the age! I definitely need to find a quality contractor, that is the area I am currently struggling with. I feel like a bad contractor could make or break these deals for me!