All Forum Posts by: Matt Nico

Sarah, read my post above. This may help you negotiate. I just bought a house with seller financing 3 weeks ago.

Good luck!

@Cody Cross:    Love the post man. 

When you are doing the deal analysis, If you want the cash flow to be great, then I would focus on what the mortgage will be with PITI. Most banks don't have a lot of flexibility so you are halfway there by just plugging in the banks 5% interest rate with the purchase price and the rest of the terms.

Its the sellers offer that matters....I would go back to him/her and ask to do one of a few things:

1. A longer payoff period. If its longer, you pay more in interest, but your monthly payment goes down.

2. Explain to him that the bank is offering much lower interest rate and 8% doesn't really work. Its true you can only get 10 Freddie / Fannie loans, but even a portfolio lender's interest rate is like 5.5%-6.5% right now, so that 8% makes no sense.

3. Ask him to lower the interest rate a lot (Like do a 2% rate), but increase the purchase price. This should lower your monthly payment, and the seller will put more money in his pocket. This is because interest for him is taxed at income level (Probably 35%-40%), while capital gains are taxed at a set rate of 25%. He saves potentially 15% on taxes.

Hope this helps,

-Matt

@Jourdain Francine:

Jourdain,

A lot of techs charge a trade fee, which means just for showing up. As an example, I had a problem with an AC unit the other day. My AC handyman charges $80 just to show up. Then he tells me what the problem is if he can find it quickly and we go from there.

If he only charged you $20 for "Tools" but no trade fee, then I would be fine with it. If he charged you the trade fee, the supplies, the "Tool" fee, and all that crap, then I would say you have 2 options. 

1. Explain that what he is charging is not right and have him drop his tool fee. This is assuming he is good at his job but maybe doesnt understand the business side.

2. Fire him and find a new guy.

Good luck,

Matt

@Michael Kammer:

I am not super familiar with the Tampa area, but I know a few brokers in the area, and they do not seem to have a problem renting anything. What I see a lot of today is the SFH that has been renovated get rent out, but Im not sure of the rents that they command. Tampa is a growing city, so I am assuming you should be able to get something to cash flow pretty good.

I would suggest staying away from high HOA's too, even if your numbers work with that added cost. HOA's are like paying money to be yelled at and restricted. A lot of HOA's restrict short term rental or monthly leases or things like that. Its better to have 2-3 options with renters than just the 1 that they usually allow, which is a yearly lease.

I'm in a place called Championsgate, which is up I-4 from Tampa. I rent places out here no problem.

Good luck!

-Matt

@Harpreet Singh:

Hey Harpreet,

I bought my first house in 2016. Put 5% down on a conventional loan. I rented the rooms and lived in the master. When I lived in it, The mortgage was $1,400, and my rent coming in was $2100. Then once I moved out, I rennovated the entire thing from top to bottom. 

It now rents for $3,600. It is worth $325,000 and I owe $200,000 on it.

If you are looking to get advice or are trying to do this yourself, jump right in man. Your first deal is about learning and finding what works, and what doesn't. My deal just happened to turn out well. It was mostly luck.

Happy Housing,

Matt

@Michael Kammer:

Hey Mike, sounds like you are dedicating to real estate. Good strategy to study up.

Are you looking to buy a place to move into? Like say a duplex and live in 1 side, or are you looking at a pure rental? Multi-family properties don't really come around too much in Central Florida. If you want to get your hands on one, you have to pay a premium, which for investors like us makes it not worth it.

Your best bet is to go into the Single Family Arena at first. Also (what I do), you could try buying a single family home, and building an in-law suite into it. Which is effectively a duplex.

Happy Housing,

-Matt

@Mike Miller

Yeah I invest right along the I-4 corridor. I buy, rehab, and rent it out. I rent by the room as well, increasing cash flow. PM me if your interested in trying to find a place up my way. I'm near Championsgate. Takes me 45 minutes or so to get to Tampa.

-Matt

Hey Mike,

There are a lot of deals in Central Florida right now. I think that 1% rule is more of a guideline than a rule. Keep in mind things like property taxes and insurance affect the numbers a lot. A home in NJ is very different from Florida. Taxes and way less. I see people investing in Orlando, Tampa, and St. Pete a lot right now. I helped an investor not too long ago that took a beach bungalo and split it into a triplex, and he cash flows over $1,000 on it a month.

 I am in the Orlando market myself, and there are still plenty of deals around. I focus on cash flow and end up leaving money in every deal I do, but I have the capital for it so I'm fine. 

What are you looking to do with your investments exactly? BRRRR? Buy a turnkey and have it cashflow? Flip?

 -Matt

 Richard, There are a lot of lenders that do no-doc loans. You just have to get out of the big bank sector. Try local banks and credit unions. Or try a commercial broker. They could possibly help.

If you are in a big hurry to cash out then I would say call a bunch of lenders. I know a handful of them told me that the loan programs were either put on pause or adjusted for the lower 65%-70% LTV. However, I'm hearing a lot of the normal programs will start to become available in the first week of June.

If you can wait a month or two, I would just say to stay patient, rent your place out, and get the appraisal in a month or so when everything gets more back to normal.

Also you dont have to do a Fannie / Freddie loan. There are no doc loans that I see interest rates in the low 5%'s