All Forum Posts by: Michael Finkelshteyn

Hard money won't make sense, I think you should avoid the hard money, too expensive for your situation.

I've come up with some possible solutions:

A.) Cash out refinance, as mentioned and use that cash to purchase the other unit. Hopefully seller is not asking for too high of a price. I would guess that you're 50%-70% leveraged this way? You may have some left over cash to purchase another property.

B.) Buy the other unit with a bank loan (commercial note or conventional mortgage) at 70%-80% LTV using the equity in your unit as the down payment. It's similar to the above, but you may get different terms.

C.) Ask the owner if he's willing to seller finance to you. You could get a line of credit against your unit to use as the down payment if the owner requires it, but you should strive for no or low down payment. 

D.) If seller has a note in place, perhaps you could assume the note through the bank or just do a subject-to. 

Let us know how it works out, this sounds like a cool deal!

Denise,

Those numbers look good to me. Like people said, it's not a bad deal, but not  great. 

Why did you choose to use cap rate instead of cash on cash return? Interestingly enough your CoC is 6.3% (1624/25700).

I thought I saw you mention that the property only needed paint, but I couldn't find that on second glance. Are there any repairs or make ready required? 

You budgeted $1400 for repairs and maintenance, but that could easily get exceeded if you need to do a make ready a year from purchase or if a major expense comes up (water heater, roof, AC). Is everything else fairly new? If so, then I would say that's a fair estimate.

Final note, you could probably bump up your CoC by lowering mgmt costs. I used to have a mgmt co at $120/month and for the lackluster service I was getting, I was paying too much. You're estimating at $116 a month.

Speak with @Jerry Ta about property management if you choose not to self manage.

But make the offer if you're comfortable with it! You gotta start somewhere. 

Oh and 2% exists in Houston, you just gotta go to the low income areas.

@Ron I meant that the homeowner would procrastinate and delay the inevitable. Kind of like a deer in the headlights because they have no idea what to do.

@Jay Thanks for that insight. I imagine there is an art to this, since you're some stranger coming over unannounced claiming salvation. What are the key things to say to build trust? 

This is a bit late, but I am kind of in the same boat except I am trying determine what criteria is best: date of pending auction or date of executed filing?

This may sound stupid and obvious, but did you click "add criteria"? I had the same thing happen to me.

You can also find a mentor by partnering up with someone if you come across a good deal.

If you really want to spend 10k-30k on mentorship and its local, then first attend the networking events, meetings, club events etc. You'll quickly see who is legit and who is not.

But, plenty of people can help you just by you asking questions. BP is a great source too.

Ali,

Welcome. I am an engineer in the oil and gas business too and not sure how long the market will support us!

I recently got my license through Allied Schools, you can find a list of schools on TREC's website: www.TREC.state.tx.us

It's a personal preference, honestly. Allied offers online courses which were about $600 but some of the courses required 1300 minutes of "coursework" meaning that you had to be logged in and going through the material.

Champions school of real estate is a live lecture course held at various locations. I think it's $1000 but it takes less time and you get to personally speak with an instructor and network with other people getting their license.

You don't need your license to be an investor, but it does help. 

You should also check out the numerous real estate clubs, meetups and networking events in the Houston area.

Best of luck!

Armando,

It's hard to answer your question without knowing what the numbers are. 

What do you mean by your HELOC has expired?

How much do you have left on your FHA?

How much do you think you can sell your properties for? 

Do you have new properties in mind that you'd like to buy? 

Have you run numbers on the profitability of those new properties? 

There are a few more questions that need to be asked, but I don't want to drown you in questions. 

Welcome!

I'd say best way to stay engaged is to attend networking events regularly and sign up with one of the clubs. I personally learned a lot from RICH and Wealth club, they have some very educational courses. 

Once you understand the process, then you just need to take that first step!

Best of luck!

Hello BP,

I am trying find out what's more effective for pre-foreclosure list criteria:

 Date of foreclosure filing or date of pending auction?

I would think the auction date has a sense of urgency whereas the the date of filing may result in the homeowner putting off the foreclosure dealings until later.

Michael,

You should be careful using the statement "splitting commissions" because the law does not allow anyone but the agents to receive commissions. 

You could also get unlicensed access to MLS but you'll need to get an agent and their broker's approval to do so.

Regards,