All Forum Posts by: Michael Lauther

Good morning Joel:

I would be interested in learning more about the properties. Location, asking price, current rental income, any particular or compelling reasons the area is good for a buy and hold landlord?

this is my current experience in Waterbury CT.I have a partner who was recently assigned a deed to property as payment for a small loan that would have gone unpaid anyway. The property owner is now in jail, the property has 2 tenants that were paying $800 monthly for each of 2 rental units ($1600) but one tenant has recently stopped paying the rent. There is $7,000 in back taxes owed and the mortgage is now 6 or 7 months past due. (Taxes are around 2400 year).The electric is about to be turned off because the tenants have not paid the bill which is in their name. the mortgage is for approx. $200,000 and the comps in that area show similar properties that recently sold between $16,000 and $65,000.The property is in Waterbury Connecticut. and I understand it is on the edge of what we would consider a "war zone". My advice to my partner is to forget about accepting the deed as it would cost more to resolve the problems and the bank is unlikely to consider a reasonable short sale. I am not sure he could negotiate a short sale in any case as he would own the property subject to the first mortgage but would not be a borrower on the note.

My advice is to not get involved but I have also posted this as a blog to see if anyone can see any value in pursuing any aspect of the situation.

I reviewed this post briefly and have some thoughts. It appears that your credit is trashed but that you want to avoid bankruptcy. I f you do not have substantial assets and your income qualifies you may be able to negotiate a modification on your first mortgage. not the "Obama plan" because this is a rental property, but an in house modification from your lender. This could substantially lower your payments. you can now deal with your second mortgage and re-negotiate terms. since they know that if you did go bankrupt they could be stripped as a lean holder and get nothing. The sink hole problem works to your advantage because your lenders may find that there is no market for the property and a BPO will probably reflect a very low value. If you PM me I will be happy to give you the benefit of my experience in this area. I am not an attorney, real estate broker, or mortgage broker but have been involved in many of these kinds of transactions.

I'm not sure about your numbers, I guess you are financing a good portion of this investment and the lower appraisal means more money up front to qualify for the loan.
I would need to know more about the location of the investment and the return on investment after PITI maintenance and property management to tell you how i would handle this. I do know this, Its hard to negotiate a profitable result if you are unwilling to walk away when your own numbers start telling you to "ask him to drop the price"

I have to admit that I am a proponent for civil discourse this does not mean discourse without passion. there have been several threads posted over the last year where the gloves came off and the participants responded directly each communicating their take on a particular subject. it is invigorating and useful if done with respect for each other.

Cary, welcome to BiggerPockets. I have not invested in Kansas City MO. only because i do not have adequate support on the ground there. It is in my opinion an excellent area for a buy and hold investor. Section 8 rents are good in relation to the market prices, values are fairly stable, population is increasing and there is a strong rental market with good public transportation. Please research these facts for yourself. Fedex among others provide a strong employment base. If i had a good good rehab crew there i would look for a very inexpensive 3 bedroom 1 bath home located on or near a bus line and start there. Good luck, i believe your are in one of the best markets for buy and hold opportunities in the country.
sincerly:
Michael

Perhaps not the most important thing to be learned, but important none the less. Nothing good happens until we take action. Yes you need to find and check out the deal and perform due diligence, but success depends on execution. Too may "investors" sit on the sidelines because they are afraid to fail. Doing nothing results in opportunity and sometimes life to pass us by.

If you want to flip you need to determine who your end buyer will be. in this environment and in lower priced homes i require a strong rental market and this usually means the only end buyer will be another buy and hold investor. If I can buy right and keep rehab costs under control and rent the property than i would anticipate a good profit on a flip. only trouble is once i own a good property with a good tenant i don't want to part with it.

just a quick thought , you could go to knowldege base on the bigger pockets web site, click on resources and you will find several sites where you can check out your property for free. If you haven't done this already its a good place to start.

There is no lack of title companies in ohio. However, you can go online directly to the county clerk and get informaton on this property and at least get some idea of the status of taxes water and sewer. I recently purchased a propety in Ohio for $1500 that needs rehab, but the back taxes came close to $6,000. Thats one reason i got the property at the price i was willing to pay. do your homework first and then by all means call a local title company, one of your choosing. they are usually very accomodating.