All Forum Posts by: Matthew O'Dell

One idea... your friend had mentioned many others already doing this in the area. You could reach out to one of them and see if they'd consider Arbitraging your properties. They may not be "professional managers" but could be interested in making a little extra cash handling more properties in an area they're already doing the work in. I know many operators that wish they could pick up additional properties in their markets if it were possible. 

Though I have NOT done this myself YET, the way I understand this is to take out a second policy for your LLC. You'll need a POA to cancel the original policy after about a month or so(if taking subto because of a foreclosure/reinstating a loan). If you do this immediately the Mortgage Lender may notice this change while finalizing reinstatement. You'll want to change the mailing address on both policies to yours/ business in case there is an overcharge or a claim... you wouldn't want the seller cashing your checks. You will definitely want to consult an attorney in regards to all subto transactions as well as the specifics.

@Caroline Gerardo

Thank you for the response. Do you know if there is a reason for that? Is it another opportunity for the lender to make more money?

Is there a loan product that takes into account the home equity instead of the purchase price or appraisal?

Obviously finding a property with equity is beneficial but also negatively impacts the cashflow and principal with the mortgage insurance in addition to the amount of cash I need to keep in the deal. Sometimes the interest rate as well?

I am in the process of purchasing my first investment property. While talking to my lender I am trying to understand the difference of the LTC vs. LTV in regards to my down-payment and PMI.

I am told that my down-payment need to be a percentage of the purchase price not of the value of the home to avoid PMI. I feel like I understand with a refinance why having 20% LTV will eliminate PMI but why doesn't LTV matter in the initial purchase?

I feel that if I pay 295 for the home and the appraisal comes back at 330 that putting 31k should eliminate the PMI. That would leave the loan at 80% LTV. Instead, I have to put 59k on a 295 purchase no matter the appraised value.

What am I missing? Is that right or should I look at a different lender?

@Miguel Lopez

Thanks for responding to my question! I'm putting in an offer this afternoon on a buy and hold in the North Ogden area.

My Realtor friend told me it is a poor idea in this market to write an offer with Seller Financing. Is this something you have ever done? Would it be a good idea to still write an offer with Seller Financing in addition to a more conventional offer?

Thank you for responding to my other questions as well, I really appreciate it!

@William Hochstedler

Thank you for your help!

I am using a Realtor friend to write an offer on the purchase of an income property. I was told that writing an offer with any seller financing during this market is not a good idea. Is this true? Should I still try to write multiple offers with different types of financing options for a better likelihood of getting under contract or should I just go with full price, 21 day close conventional financing like my Realtor recommends? If seller financing is actually an option would it be possible to have the seller carry a portion as well as a financial institution or will that create a conflict?

Thank you again!

I am trying to get into Rental Real Estate. I want to make sure I have everything in order. If I find a seller what type of contract do I need to have to follow through with the purchase? I am in Utah, is there a state specific contract or can I write my own? What phrases or keywords are recommended if I do write my own contract? Any help would be greatly appreciated!

-Matt O

@Colleen F.

Thank you so much for taking the time to answer my questions, that means a lot especially with how busy life is.

If you don't mind me asking, you mentioned not doing many flips, if you had the opportunity to purchase this home at about a 30k discount as is or finishing some projects the current home owner started forcing equity and potentially selling at an arv of 450k-470k would you personally consider this deal and if so, how would you take it on?

Thank you again for your time!

Matt

I am new to real estate investing! My first move was a cash out refinance of my primary residence. I was able to get 140k without raising my monthly payment. 

Over the last two months I have been talking about what I would like to do with real estate and an associate sent a friend of his my way. He has a home in a really good area, in between elementary and jr. high schools, good access to amenities, and a quiet, working class neighborhood. There is room for appreciation (I think) but home prices seem high here in Utah. He said he is interested in selling his home by owner for what he thinks is about 30k under value. 

This would be my first deal but when trying to make any numbers work it would not cash flow, it could be possible to make some money reassigning the contract if I knew someone willing to purchase but have never been associated with a wholesale. 

I thought about buying it myself. If I bought it at the 390k he is asking and put up to 10k in cosmetic upgrades (assuming he is honest about the current condition) it could make sense. Similar homes in the area are selling or valued at 420-455. I am going to see the home on Tuesday with a friend that is an agent so he can tell me what people are looking for when buying and to get a better senses of comps.  

My concerns are the amount of margin that will be consumed by financing the property as well as capital gains taxes and possible holding costs. I was also wondering with being in a "buyers market" who is typically paying for the closing costs on a traditional sale, the buyer or the seller? I think the seller paid when I purchased my first home.

The extent of my financing experience is the first FHA purchase on my home and a few "Smart Refinances" and a traditional cash out refinance all on the same home.

Can anyone help explain if there is a way for my to offer the seller options that could make this a deal? 

Also, I know this would be a "flip" and is somewhat controversial when referring to real estate investing and with that I have a question if it is possible to take any equity from a deal like this and reinvest into a true income property to defer taxes?

Thanks for sharing your knowledge and helping out a rookie in advance! 

Well, I sent a letter to the owner about a twi weeks ago. In the meantime I refinanced my house(cash out 100k) to be sure I have the funds incase this property somehow works out. No response as of yet.

Positive note: A few days ago the exterior around the building was cleaned up quite a bit. Either coincidence or maybe my letter sparked something in the owner. Either way the neighborhood looks a bit nicer!

Lastly, BIG THANKS to all that have welcomed me and shared some positivity...hasn't been much of while sharing my new goals.