All Forum Posts by: Mariah Jeffery

Rich -
The reasons I'm buying properties in Rapid City are a) cash flow opportunities are few and far between in the Portland area (the 1% rule is almost unheard of, much less 2%) and b) my father in law lives in Rapid City and manages the properties for us at a very low cost.

Don -
I don't know the answers to these questions, so I guess I have a lot more research to do!

Thanks to both.
MJ

Rich -

I have looked into that. The lot is not quite big enough to be split, unless the neighbor would be willing to sell me a small chunk of his land. It's a possibility, but not one I can count on. This one would be very difficult to sell, so I would plan to buy and hold for a very long time.

How much higher is maintenance on a mobile home?

By the way, this property is in your home state of South Dakota (Rapid City).

-MJ

I know someone who has 65 properties and has offered to sell me any of them at the tax assessed value. For this particular county, the values usually run 10-15% lower than the market value on average, but there is a lot of variability, and some are 20-30% below. These are the ones I'm trying to find. They are all in decent (but not excellent) shape with tenants currently in them.

One of the seller's properties has 3 mobile homes and one single family home on it. Asking price: $94K. Total rents $2,000/month. All utilities paid by tenants. This meets the 2% rule, and property taxes would be pretty low (~$1,950/year). I have asked around about financing, and so far the best I can find is 20% down, 6.75% on a 25-year loan with a 15-year balloon (so I would probably pay it off in 15 years because I don't like to gamble).

I calculate the cash flow to be $388 (not quite $100/door but not bad for a 15 year mortgage; I get $534 if I plug in 25 years.) and the 30-year IRR to be a whopping 36%. This seems like an outstanding deal, but I know very little about mobile homes. Is there anything I should change in my analysis? Is maintenance higher for mobile homes than single families?

Thanks!
MJ

Actually, that is how we ended up doing it. I found out that two of these properties are on the same tax lot, and then there was no way I was going to agree to let my earnest money be at stake if I couldn't find a way to finance that one. We closed on one already, will close on the next two in two weeks, and we're still trying to work out a deal on the others.

Were you able to find financing for this, or were you trying to buy it in cash? I am interested in buying two properties on one tax lot, and finding financing with a fixed interest rate is providing to be challenging.

I'm still trying to find financing for this. Any mortgage brokers out there who can help me? I've found plenty of lenders willing to give me a variable interest rate loan, but I need a fixed rate.

I think I am close to an agreement to purchase six properties from the same seller. They are approximately 30% below market value.

My husband and I would each purchase three properties in our own names, to minimize the number of mortgages we have. We each already have one investment property with a mortgage, and our primary residence mortgage is in his name only. I have owned my investment property for 2.5 years, and we are closing on his triplex this week. We are planning to buy one each per month for the next three months. I am concerned that lenders will not want to lend to us on so many investment properties so quickly, even though we have ~780 FICOs, plenty of W2 income, and low DTI. The others more than pay for themselves with $100+ cashflow per property, so our debt to income ratio should improve. Should I be concerned? The seller wants earnest money on all six properties with no financing contingency, since the main reason he is discounting them so much is because we are buying six (we still have inspection contingency).

The seller is not willing to owner carry because he’s 87 and will probably die in a few months, so he wants his money now. I tried and tried, but he won’t budge. I suppose if he’s going to give me my price, I’ll give him his terms, especially since we have the cash for the 25% down payments.

We may try to buy one of them (currently vacant) as a second home.

Even though it would actually increase our cash needed for a down payment, I’m considering trying to buy one or two of these properties in cash, if the seller will consider allocating something very small (around $20K) to one or more properties. The market value for these properties is between $70K-$95K but our package price will be just over $55K per property. I’m not sure if the seller will balk at allocating $20K to a $70K property because I haven’t asked him yet.

Are there any other creative strategies I can try to minimize the down payments and/or reduce the number of mortgages? Any other suggestions would be appreciated.

By the way, the package includes five SFR’s and one duplex. Four of them are right in a row on the same street.

Thanks,
MJ

Would a better approach for me be to show up at the auction, hand my card to all of the bidders, and mention that I'm interested in buying it from the winner? Would I be able to buy it with a mortgage this way and avoid tying up my cash? Do you think the winner would want to do a double closing? There is a 30-day right of redemption in Oregon. Would that prevent him from selling it to me for 30 days?

I'm looking for a mortgage broker to help me finance a triplex in South Dakota. Credit score is 790 and debt to income is very low. The purchase price is $100K and rent is $1,325/month. I'm particularly interested finding a lender that will allow 20% down without a premium over the 25% down rate. Please PM if you can help.

Thanks,
MJ

I'm interested in purchasing a property like this, but the one lender I talked to said it may be difficult to find enough comps like this to do an appraisal. What are my options to finance? I don't really want to purchase it if the rate is higher than 6.5% or so, so hard money is probably out of the question.