All Forum Posts by: Matt Hurley

This is a very sweet gesture, but we will need much, much more information to give an accurate recommendation. Why is she losing the house, because she can’t afford to buy it herself? Why does she not qualify for a loan? How much is the current mortgage and how much equity does she have in the house? What are your long term intentions by helping her (do you want to move in yourself later on)? Are you a current homeowner yourself, would you qualify for a mortgage with her? 

Would you buy this house normally if you were not getting a land contract? If not, then a land contract is not a good reason to buy a property, especially if your rehab will be limited by the historical district. Also wanting to clarify this, "can't do new reno" Isn't necessarily the correct moniker. You absolutely CAN renovate a house in the historical district of Ypsi, but you need to present plans and get approval from the historical society first and they need to fall within the guidelines of the society. My brother put a brand new double pane window in his kitchen (house is in Ypsi's historical district just outside of Depot Town). It took him 3 months to get a approval, then he had to order the window (which took 4 months to arrive). So start to finish 7 months to replace one window. 

Regarding the refinance, I'll echo Eric: refinancing a land contract is no different then refinancing any other loan. You pay off the land contract first, then take out the rest of the money if available usually up to 75% - 80% LTV. But, if there's no value add in this house, how are you going to be able to meet that LTV?

I'll echo what Eric's saying, you need to have a better idea of the potential problems you'll be facing before jumping on a deal like this. My recommendation would be to find a real estate lawyer ASAP and ask all of the above questions. You cannot kick someone else's tenants out after purchase just because you're the new landlord, there are very specific laws that you need to follow. Especially if none of these tenants have leases, then you would have to go through the eviction process to get them out. 

To answer your question about a cash out refi, yes you can get one but you'll no longer be on a land contract. The previous owner is in first position, so you would have to pay him/her off first then what was remaining up to your lenders max LTV would be the cash you could pull out. If you aren't familiar with the terms I just mentioned, I would recommend spending some more time on the forums and with the BP analysis calculators. They helped me out a lot when I was first getting started.

Best of luck! 

@Taevin Thomas great, keep us updated :)

I house hack a single family house in Ypsilanti, and long story short: yes you can convert some houses into a duplex, but it really comes down to finding the right opportunity. The house has to be basically setup already for it to work, and each unit needs a full bath and a kitchen, and it's own hvac system. It can get really expensive. I've seen a few larger single family houses that have a door blocking the staircase up, then they added an external staircase to the house turning it into an upstairs/downstairs duplex. Most were modified like this decades ago, I haven't seen a lot of people retrofitting SFH's recently.

More importantly, you have to know your zoning inside and out. For example, you can't do any duplex conversions on R1-R5, nor can you even convert it into a rooming house is you wanted to. Spend some time reading the town zoning definitions, and call the zoning board to ask questions. Since the City of Ypsi has EMU, code is followed to the T and it's mega rare to pass your rental inspection on the first try. 

If you're creative, you'll find an opportunity though! The tenants in my house hack currently pay for my entire PITI + the water, and when I move out the place will throw off something like a 30%-40% cash on cash return.

Sorry to read this. I used seek capital back in 2017 to start an online subscription business. We wouldn’t have been able to move forward had it not been for them. They go through reps like candy though, it’s clearly a crappy place to work, and it appears to have gone significantly downhill since we used them. Sorry to hear!

@Bryan Igboke

I house hack a rooming house. All of the very personal stuff like my mortgage or financials I have go to my PO Box. Everything else comes to the house.

@Matt Nettles Appreciate the honest responses! I've got 4 doors under the belt in the single family world, wanting to scale sooner than later into multi's and syndication. I was not aware of Tim before reading your post, and he's now at the top of the list after some research and listening to podcasts. I'll definitely check out his zoom seminars, thanks for the heads up on that one. 

@Matt Nettles 

Wondering if you could post an update, since you're approaching the one year mark. How are you feeling about Tim's mentorship? Well spent? Any thoughts on the program? Thanks!

@Brian Burke Just finished the book myself, fantastic job! 

I came at it from the other side: I'm looking to become a sponsor myself and heard that this was the best book to detail what a fully educated investor should expect. It did not disappoint :) I now have a significantly deeper understanding of the underwriting process that has been lost in many of the other education resources I've seeked out regarding syndications and multifamily analysis. 

Thank you!