All Forum Posts by: Rebecca Morrell

Thanks for the info, Des.
As I said before, I was initially looking at this house for investment purposes, but now have decided that I would like to own and live in it for at least a year as my primary and only residence... For the purposes of the forum I was still referring to it as a "flip", but I'm really just concerned with how much I will make in resale in the same way any other homeowner would; I simply don't think it's a wise choice to purchase a property and spend money to fix it when I know I would never be able to get it back.

I apologize for the confusion, and I'm now certainly embarassed that it has appeared I was trying to be an investor who would fraudulantly "pose" as an Owner-Occupant; this would NOT be the case at all, I simply have never lived in or looked at a house that needs a lot of repair, and I am trying to figure out if it is a smart purchase.

I am aware of capital gains of course, I just don't have experience with private lending methods and I was trying to figure out if they would be an option for this purchase. I honestly would personally prefer to borrow money from a smaller, more personalized lender than a major institution on any day of the week.

Also, Peter: To clear up any confusion about my "scary" approach, I am brand new to this side of property sales, and I have been exploring all options during the past few months. Just by looking at this forum you can see how many approaches one can take: pre-foreclosures, foreclosures, REO, short sales, HUD foreclosures, rehabs, bankruptcy sales, short sales, the list goes on. Three months ago I didn't know anything about most of these, and I have asked questions about them as they have come up in my research. I agree as I have been advised that it will be wisest and most profitable to focus on one area, however I am at this time looking to see which will give me the best results in the short term. That is all.

Thanks again to both of you, take care!

Hey there Peter,

Thanks so much for the response; I would love to take you to lunch sometime and hear about your experiences and advice...

If I may clarify; the outcome of this purchase has shifted DRAMATICALLY since my first posts (which were about another HUD property)... This is why I certainly apologize for the "randomness" and confusion!

When first posting, I knew ZERO about how the HUD process worked, but have subsequently spent a great deal of time over the past week becoming familiar with how these homes can be purchased and by whom.

At first I was looking at it from an investment standpoint; as such I would have financed as an investor. This would be me doing the purchase and sale, possibly with but most likely without my boyfriend/partner.

After deciding that the first property we looked at needed far more work than we were willing to put in, we scrapped that. The same day I found another property which I initially thought could be used as an investment purchase. However, after spending a great deal of time there, we started to think that purchasing this as a home was a much better decision; this is where the owner occupancy comes in, we are not actually plannig to "flip" it and I apologize for not clarifying. I would NEVER attempt to "cheat the system" in that way; I don't understand how or why investors would waste the time, as you said.

The reason why this would be potentially profitable would result only if we could get the house at a low price; we will potentially be moving to California next year, and if we were to sell then at fair market value, it would certainly be above what we paid.

My question was simply about what other financing options are available aside from FHA and conventional lending... Again as I stated, neither one of us was planning to purchase a house to LIVE in at this point, but as most first time home buyers realize, it would make sense to buy this house and have a monthly mortgage that would be less than our current monthly rent.

I hope this clarifies... Again thanks for the great input!:)

Hi everyone!

I have made my first foray into real estate investment this week, and subsequently I have many random posts flying around the forum, so I'm going to post this several different places...

Basically the story is this: Found a HUD property that is a rare gem for my area in Maine, and after having several contractors give estimates, my partner and I decided that it would be a great rehab flip if we could get it for a certain price.

We made a bid with him using FHA financing as an Owner-Occupant because 1.) we wanted to get in during the Owner-Occupant initial period of bidding and we do plan on living there for a while during renovations, and 2.) we don't have a lot of money to put down right now because we weren't planning on finding a great deal so soon.

The first bid was very low and subsequently rejected, and we don't feel comfortable going much higher using FHA financing in his name because we are so new to the game... However, I am interested in possibly finding a way to get private financing for the cost of the house plus repairs.

Having never worked with anything aside from conventional financing before, can anyone offer some advice or opinions on the situation? From my precursory research and understanding of hard money lending, it is most beneficial in short term flips, and usually only for the purchase price; is this correct?

In this case I would need to finance the purchase price plus some extra for remodeling (mostly cosmetic), and also be able to hold it for 3-5 months until resell.

Can anyone recommend a way to finance this deal?

Any help would be wonderful and much appreciated, as I have already learned so much from the experts on the forum!

Thanks :)

Hey everyone!

I'm from Portland and have just started attending the Southern Maine REIA during the past few months; they have great speakers that come to each meeting... Google "Southern Maine Real Estate Investors Association" and you should find it! Right now it's meeting one Wednesday a month at a hotel in South Portland.

It looks like some of you guys are a little farther North, but if you can get down here I do recommend it :)

Hey Ted!

Thanks so much for the caution; this week has been a HUGE learning experience and I feel great about all that I have found out about the process...

To summarize:
1.) Indeed the property I was first referencing would require more rehab than we were interested in, so we scrubbed that on Tuesday.
2.) The very same day, another property came on the HUD website: single family in a great location, and only in need of some TLC.
3.) Unfortunately, since we were not planning on making our first purchase/investment at this time, we fell a bit short of the down payment and have today decided to nix that one (although I was a bit more emotionally attached to this one, making it our first real disappointment).

I suggested to my partner that he try to get a private lender to fund the rest of what is needed for the down, but unfortunately I have not thus far been able to convince him that private lending is secure enough to use as a means at this point in his life... I am much more comfortable with the idea, and look forward to finding a lender to help me finance another deal in the near future, but in a nutshell, that's the outcome of this situation!

I can't thank everyone enough for all of the info this week, and as I said I am not too upset about these prospects not pannig out since I know others will come along soon.

Des and Maryann, you have definitely answered my questions: Thank you so very much!

I am far more educated individual and investor now than I was at 8am...

I have found out that I am one of the first people in my office (as an agent) to work with a HUD buyer, but that in fact we are certified and I can place the bids myself once we decide on a property, making the whole transaction smoother.

The advice on offers and financing has been very helpful: at this point after finally seeing the interior, I have also learned that "Good" condition as listed on a HUD Property Report is nowhere NEAR what it would be on the regular market. We are now trying to find a general contractor who might be able to give us an estimate on repair costs, and also a rehabber who we might be able to flip the property to (per transactional funding) in case the repair work is more than we want to handle.

The terms that HUD offers are just too good for him to not take advantage of at some point soon, but I'm thinking that doing a wholesale in my name might be the best option for this one.

UPDATE

Thanks so much, Des, that's very true; I'm now trying to get ahold of someone in my area who actually has experience dealing with HUD because some people here are saying that they will counter if they don't like my offer, while some say they never counter period.

Another question, and I apologize for asking such basic questions but I am still a novice as a broker; my buyer was pre-approved for conventional financing about 90 days ago, but hasn't applied for FHA financing... I'm realizing that we should try to get that done today before making an offer? On the FHA website it links to LendingTree to apply for a loan; has anyone used this method?

Thanks again everyone, I very greatly appreciate the help!

Thanks so much, Desmond, that was exactly the info I was looking for!

This property is in fact listed as "uninsured", so if I understand correctly, the coverage of closing costs and commission won't be an option since he won't be able to use FHA... Definitely a bit disappointing, but I'm very glad to be aware of that now.

Thanks again, I really appreciate the help!!

Hey guys,

Looking for some quick advice on a HUD sale:

My boyfriend is going to be making a full-price offer on a HUD property tomorrow, and I'm trying to figure out what the bottom line is for the amount of money he will need to close.

Can someone who has dealt with a HUD sale before give me a little info into how it works? At this point he has a pre-approval for conventional financing through a local lender, but will HUD be offering any deals for financing as part of the sale?

Any help would be really appreciated, as this will be our first investment property purchase!!

Hi everyone,

For the past 2+ years I have been researching real estate investment based on one idea which I thought could have a high yield in a small amount of time: a transaction in which I could buy a property from a homeowner who has filed bankruptcy through a Chapter 11 Trustee, and flip it immediately.

After not having successful luck contacting the local Trustee in my area (wrote 2 e-mails, never received a response) I had given up on the idea that this was even possible... Until tonight!

I just read a story from a member on here whose first sale was exactly this type: a Trustee had received his mailer, called him and offered him a properrty for $40k which he immediately flipped.

Has anyone else had luck working with Trustees, and can reguler bankruptcy attorneys liquidate property the same way?

Also, I assume that acquiring a property this way would relieve a lot of hassle in the way of title work, since the Trustee would also be able to disclose any liens that are on the property... Does anyone know if this is true?

I know now that one of my biggest problems in my past e-mails was that I was not forward and/or "ready, willing, and able" enough; I am trying to line up private financing right now so that the next time I make contact I have cash in hand and I am ready to buy then and there.

Thanks so much for any help, I'd love to hear what others have experienced!