All Forum Posts by: Macie Moore

Hi BP Community,

My husband and I are ready to make an offer on (3) single family homes, one of which we are currently renting. The three properties are owned by the same person, which luckily happens to be my husband's grandpa. He acquired the properties from his mother's trust after her passing and got them for a great deal. So, they come ready with equity and they all have long-term renters in them currently and have been in my husband's family for years. So, clearly this deal is very attractive to us as new investors who have no experience in land-lording. 

We've spoken to his grandpa about purchasing the properties and we asked him if he was familiar with the concept of seller financing to which he replied that he was. We have not explicitly made him an offer yet, but that is mainly because we don't understand how we are to structure this, the main reason being these properties are currently mortgaged. 

If these homes were free and clear then yeah easy peesy, we get it, but throwing this mortgage wrench into the equation really has us fumbling over our next steps. Where does the original lender come into play here? I am aware of the "Due on sale" clause that could potentially blow up in our face, and we don't have any safety net should the lender decide to call the loan, but I've also heard of that being a very rare occurrence as long as the loan is performing, so I'd hate for that to stop us from moving forward with this. What's the cleanest way to finance a property using seller financing that is currently mortgaged? Any tips or tricks for navigating this deal would be so incredibly appreciated! We are desperate to get moving and get some properties into our portfolio!! 

hi Elijah, sorry for not seeing your reply to my post, must not have these notifications figured out yet! Casey is right! In our case we intend on using an FHA loan which has a low down payment requirement, to acquire a multi-family unit and rent out the other units so we can live for a reduced cost as our tenants would pay our mortgage. FHA has owner occupancy requirements, which is usually a year. At that point we will refinance to conventional and get another multi with FHA (at least in my are you aren't allowed to have more than one at a time). Also, what my lender told us, was anything above 5 units is not FHA eligible, and you would then need a commercial loan.

Hope that helps!

Hey Scott! Great to hear of another investor in the urbana area! We are also new to REI , however I am nearly finished with my real estate license requirements so I've been pursuing other areas for awhile. We are currently researching seller financing strategies and terms to hopefully be acquiring 3 sf properties. 2 in urbana and 1 in Mechanicsburg so I am really hoping we will acquire properties soon! Urbana is a unique town but I think a good investment opportunity :)

Wow - great advice from you both. I appreciate that! I had the thought of hiring a contractor to tour the home with us and point out potential budget busters, I also thought of the lead paint issue, but was going to ask if it had been sealed in all it's years of existence. Do inspections test led paint levels? I thought they did. At any rate, I truly appreciate the advice and will take it to heart as we move forward in analyzing the deal.

Hello All,

My husband and I are BRAND NEW to the investing arena and have been in our education phase tip toeing around the hot lava that is "analysis paralysis".

We are considering taking the plunge and opting for the "house hack option" in a du, tri, or fourplex so that we can "live for free" and spend extra money on advertising (we are very attracted to the seller financing option) or saving money for some down payments on "flips" trying to get some capital coming in for our end goal of buy and holds.

Our town is very historic, there are a lot of 1800/early 1900 homes. These homes are very large and as a result, many have been turned into multi-family homes. We have found one that we are interested in purchasing (a triplex) that seems like a great deal with great cash flow. As I mentioned, we intend on "house hacking" and living in the 3rd, larger unit, of this property. During my research, I went on the county auditor's site to see past purchase prices, taxes, etc and noticed that an investment company purchased this home in 2016 and they are who are currently trying to sell the home.

This particular home was built in 1908, and the house description uses many buzzwords about "newer" this or "improved" that while also using "charm" (read - old). It does seem like a good deal, but we are brand new and I feel like maybe it's a red flag that an investor is selling this home less than a year later?

Should we avoid these old homes (that make up a large part of our market) due to unpredictable and potentially expensive maintenance costs? Is it common place for an investor to sell properties like this that quickly and it not be indicative of a larger problem? What are some questions we could ask the seller to figure out the behind the scenes of what, on the surface, seems like a great deal? (i.e. - maybe there are tenant issues, or a costly repair that needs done, or maybe it's a money pit and they want out). What are some things to consider when dealing with old homes?

Thanks in advance for any insight you can provide!