All Forum Posts by: Sean F.

Nathan Emmert Yes, the $2,000 in rents includes my unit. At least I got that right! : )

Regarding the neighborhood, yes it's in a rough little city just outside of my hometown. I wouldn't say warzone, but definitely C neighborhood. I will have to double check and see if it'll qualify for FHA.

So because of the high taxes it throws the 50% rule out the window? I hope I used the right tax figure. I found the information online off the county property appraisers office website. This was total advalorem and non advalorem taxes combined for 2011

Regarding the interest rate, I wanted to use a more conservative number just in case. I think I can safely use 4%

Thanks guys, how can I come up with accurate figures for PMI and the insurance?

For the taxes, can I use 2011 tax figure and divide by 12?

Hello BP'ers,

I've located a multi-family property not too far from me that i'm interested in. My plan is to purchase FHA and occupy one of the units. This will be my first real estate purchase. My intent is to hold the property long term and continue to buy up properties once I satisfy the 1 year OO for the FHA financing.

The 4 plex consists of four 1 bedroom 1 bathroom units all on the same floor. I realize this isn't ideal and will experience higher vacancy than normal.

Price $80,000
Loan amount $77,200 (3.5% Down payment)
Payment: $414.43 (30 year, 5%)

Monthly
Rent $2000
Expenses: $1000
NOI $1,000
Payment: $414.43
Cash flow: $585.57

I have not calculated PMI or Insurance into the numbers yet.

On the surface, the numbers seem to work. Now that this property passed the screening tool, i'm not sure where to turn.

I looked up the 2011 taxes online $6,455.42

I'm going to drive by the property today and check it out. I will check for seperate meters, roof condition, etc...

What am I leaving out? What else should I be researching on the property?

I checked public records the property last sold for $59,780.00 in 1997.

I was only able to find one 4 plex comp in a half mile radius. It's a 8 bedroom 4 bathroom and sold for $90,000 April 2012.

Thanks in advance

Hi Dan,

Welcome to BP, it's nice to see someone local to me on here. We share a similar strategy. I'm also trying to obtain a rental property using FHA financing.

Inventories are low and lots of competition from cash buyers. Don't let that discourage you though.

Good luck!

Ah, just spoke with the lender. No appliances needed. A/C is required.

After some reading, you bring up a good point. I'm reading conflicting info regarding if appliances are required to go FHA. This is something I definitely have to clear up with the lender. Thanks for the heads up.

When I spoke with the lender, I inquired about the FHA 203k rehab loan. He asked me questions about the condition of the property and I disclosed everything I could remember.

The roof is 10 years old with no apparent leaks it was pouring rain the day of the first open house. It has working central AC, new tile floors, new windows, wood laminate upstairs, plumbing seems to be ok.

On the other hand, kitchen cabinets need to be replaced, no stove or fridge. Bathrooms are decent, just needs to be cleaned up maybe some new sinks, and the light fixtures.

The previous owner that was foreclosed on by the lender (seller financing) started fixing it up but lost his job and lost the house.

Thanks for the replies and guidance.

@Steve Babiak I just left the attorney and he used the standard Florida contract for sale and purchase. He really took the time to explain everything, eventhough he was cleaning up his desk to go on vacation to South America. He was really helpful and I plan to use him in the future. Did I also mention that he waived the $100 he usually charges. So that was cool.

Now that I know what the contract looks like with the addendums etc... I feel way more comfortable submitting offers on my own in the future.

I think I just need a little bit of help with my strategy. Basically what I'm doing is offering what they are asking so that I can get under contract. I don't want to lowball them because I know someone will offer higher this coming Saturday at the open house and outbid me just like last time.

So, I'm offering 110k with the thought that it wont appraise at that amount and then can begin to negotiate from the appraised value.

I am so new to this it isn't even funny! I'm just copying the same strategy the buyer before me used because it worked on me!

What kind of strategy or other creative options am I not considering? I'm trying to not pay above the appraised value as the property would still need 10k in repair. (rough estimate) My plan is to occupy it while I fix er'up then rent it out for profit and keep on doing the same thing. Slowly acquiring rental props with owner occ financing.

Thanks again!

Kyle hit the nail on the head. Anyone can create a site nowadays. Getting to the top of the page with keywords is the tricky part. SEO and paying for the adsense words can get pricey. You can also drive people to your site by creating content, writing articles etc...

Update: ill definitely be meeting with an attorney today and sending the sellers my formal offer. I will post back my progress.