All Forum Posts by: Maurice Selva

I looked at a property today that just came on the market that is priced at $250,000.00 in which the ARV is between $490,000.00 - $510,000.00. I am estimating that rehab cost will be around $85,000.00. The biggest challenge I am anticipating is that when I walked through the property to evaluate it 3-4 agents were walking their flipper clients through and because the owner lives out of state and has to review all offers with their attorney they will not be reviewing offers for another week. I have to believe the they will have multiple offers and that I'll be competing against pro flippers who don't have to obtain financing and will be able to offer more than I because I'll be using hard money and I will be using a contractor to do all of the work. I remember hearing on a Bp podcast about putting down $100,000.00 as a deposit would sweeten the offer, and that as long a I have my contingencies in place I should be fine. I'm not new to the business and have made a lot of offers over the years but am a little apprehensive about structuring my offer in this manner. In the past when I've made offers on properties that I've gotten way below market I've only figured in $40-50,0000.00 profit but as you can see there appears to be more than that on the table. I don't want to be greedy, want to figure in a good profit margin and would like to pick up these deal if at all possible. Do any of you have any suggestions other than what I've laid out on how I might strengthen my offer?

I'd love to help my two daughters buy a home using the house-hacking method and want to know if they can use the rent from room rentals to help them qualify for the loan, whether FHA Loan or otherwise? I am aware that some lenders will allow you to use 75% of the rental income to qualify for a loan/debt but does this hold true for purchasing of a single family home where you are renting out individual rooms? Would love someones input who has done this help me in answering this question. Also, would love if you shared how you went about qualifying for the loan when you bought a home and if you had to qualify solely based upon your own income?

I found a foreclosure property on MLS that has been on the market for 381 days and was wondering if anyone has any experience in purchasing a foreclosure-notice of default property through MLS and if they can impart any words of wisdom as to how I would make offer and what kind of offer would the bank be holding off for? I would have thought they would have gotten something in 381 days of having been on the market. Any guidance or insight would be appreciated.

Investment Info:

Single-family residence fix & flip investment.

Purchase price: $340,000
Cash invested: $127,000
Sale price: $517,000

We purchased this home as a divorce sale. We did a full rehab on the inside and outside doing new paint inside and outside, new plank flooring, remodeled the kitchen and both baths, blew open the floor plan by eliminating some walls areas, redid some of the ducting for the HVAC system, new lighting throughout, front and back landscaping, leveled the floors, updated the light switches and outlets throughout and removed a fireplace that was badly damaged in an earthquake. Since I am a realtor I was able to list in only having to pay the selling agent commission. My partner is a GC so with sweat equity we were able to save a few bucks on some labor costs.

What made you interested in investing in this type of deal?

Just got through attending flipping seminar in las Vegas and were excited to get started

How did you find this deal and how did you negotiate it?

My partner found it by overhearing a guy that he knew at a fish store that he frequented that he was going through a divorce and needed to sell his house so that he and his wife could go their separate ways. We negotiated the deal by going to the house face to face with the both of them offering exactly what our formula told us to offer.

How did you finance this deal?

We financed it by using funds from my self directed IRA, funds from a heloc and a majority from hard money that one of my friends had introduced me to.

How did you add value to the deal?

Upgrades like granite countertops, barn door doors, paint, kitchen and bath remodel, moving walls, paint in and out, opening door from living room to garage, landscape improvements and sweat equity.

What was the outcome?

We were able to make some money, pay a majority to uncle sam and learn a ton.

Lessons learned? Challenges?

Use more of other peoples money and less of mine. That I need to shop for more favorable financing terms. Start looking for new deals before you existing deal is complete.

Having just bought my first out of state turnkey duplex in Lubbock. I thought that I would take a different route this time around, do a bit more research of my own so I started googling "best places to buy a rental property in the USA" and I was given a bunch of data in which to start my evaluation. Not only did it give me 1 yr & 6 yr. job growth but it gave me an equity growth rate over 7 yr. period, unemployment rate, median house price per month, median sales price and unemployment rate. From this information, I was also able to determine what the rent percentage of the purchase price was, somewhat like when using the one percent rule. I see a lot of the same states on your chart that is on mine it just looks like you need to do a bit more homework and layout your date on a spreadsheet so that the numbers will reveal where best to invest, then you can start building your boots on the ground team..... best of luck! Here is a link that should take you right to the information I was able to use; https://www.realwealthnetwork

Ben, you have to start putting your foot down and take control of the situation. After over 20 years of managing over 300 units, I've learned that tenants are like children that are always testing you so if you don't stand your ground then they will walk all over you. There is nothing wrong with being empathetic about a person's situation if, in fact, it is a real hardship but never let rent lapse beyond a month because that snowball is going to keep getting bigger and out of control. If you have not already done so serve her with a 3-day notice to pay or quit. If she doesn't respond to that within three days, serve her with a threat of eviction. It doesn't necessarily have to be a formal summons and complaint it can be a flyer type notice on a yellow or red sheet of paper outlining what the terms of her rent payment are as outlined on her rental agreement and stating that if her rent is not paid up within 24 hours it will be put in the hands of your attorney. If she still does not pay her rent in full ask an eviction attorney to prepare a formal summons and complaint, attach a cover letter stating that as evidenced you are serious about proceeding with the eviction and only need to file paperwork to start the process. It doesn't cost much to have an eviction attorney do this for you and is much cheaper than and actual eviction. By not filing it and preparing it it lets the tenant know that you no longer are willing to play by her rules and that you hold the rule book. I do this with my attorney all the time with tenants that try to but heads with me and 99 percent of the time tenants get the message, pay their rent, correct their behavior and I am able to avoid an actual eviction. My business is in California, not Texas so I'm not entirely aware of your termination or eviction laws but they are more favorable towards landlords than ours so this all should be legal. If after all this she continues to pay her rent late I'd just cut her loose and find someone that is willing to pay their rent on time. Some tenants just don't get it. Ain't it fun being a landlord?  Best of luck..... I hope this bit of wisdom helps get your tenant back on track. 

Hi Alec, Jon's suggestion of holding an open house is a good idea if you are getting a lot of inquiries and don't want to be running back and forth showing the property throughout the day. I typically try to qualify prospective applicants over the phone to weed out as many people as I can who are not qualified. Some of the things I ask them is if they are working, how long they've been working at the same job, how many are in their family, do they have pets,if it's a dog what breed and age it is etc. There is nothing that says you can't qualify or disqualify someone over the phone. You can also ask them how soon they need to move into a place which will tell you their urgency and motivation. If they don't have to move into a place immediately encourage them to come by your open house so you don't have to make a special trip for them. Remember, you are the one that holds the gold so make people work on your terms not theirs. Be somewhat accommodating but make sure to structure your showings and marketing. It's also a good idea to put as much information into your advertising as possible which helps to weed out the people who are not qualified and who will waste your time. Good luck.....you are in control.

Hey Cheryl,

Thanks for the shout out. I wish I had seen your posting earlier this week. I have been a little under the weather and have not been spending any time on the forum. I am really new to BP; I just found them but a month ago. I never knew they even existed.I've been following Clayton Morris for the last few months until I found BP, now I'm 100% on board with BP and am a PRO member. I see you are a flipper. Are you actively looking for something to flip or do you know of any wholesalers in the area that are looking to wholesale anything? I've only done one flip but I'm not new to real estate and have a decent team together and are just looking for a project. If you know of anything that you don't feel like tackling please let me know. I am in the process of trying to buy some more out of state multi-units but could sure use flip proceeds to dive in a little deeper.

Hi Conrad, thanks for responding. I have a small conference office downtown setup for now but I'm talking with a couple of pizza places to see what else I can line up. I thought that it might be neat to be able to view some BiggerPocket podcast during the get together to get the conversations going, discuss some of the subject matter that other people are doing, share some experiences, get to know each other and get involved in sharing our wants and needs. To try to keep the cost to a minimum or free I'm looking to see which night of the week is the slowest night that we might be able to bring them some business. I hope to have more information in a couple of days and will keep in touch. 

Much success,

Maurice

I am looking at starting monthly meetup get together group with people who are:

- Looking for deals
- Staring at a deal right now
- Looking for others like you
- Seeking tricks /tips from others
- Looking for a partner / mentor
- Looking to build your network
- Thinking of getting into real estate
- Seeking hard money
- Sitting on money and want to invest it
- Looking to bounce ideas off of other real estate investors

If you are interested in getting together to socialize, talk, network and have fun please let me know so that I can set up a venue at a fun local place. Let me know what time best works for you and what day of the week you'll be most likely to attend. Looking forward to hearing back from like minded, fun loving ambitious investors, flippers, wholesalers etc. that are looking to build there businesses in the area. 

Sincerely,

Maurice