All Forum Posts by: Murali Jesudoss

This is my first ever deal and OOS. Please share what do you think. 

Purchase Price: 107K (Ocala, FL)

SFH Buy And Hold: 3 Bed 2 Bath 2 Car Garage(detached) 1989 Built. 1000+ sq ft.

Tenant Occupied: $1000 per month (Long term tenant). 

It went pending and came back to market and we made a cash offer and got it under contract and closed with HML(25% down). Property is in decent shape and probably needs a new roof in few months or an year. Full tile flooring. May be a cosmetic kitchen rehab during tenant turnover and HVAC in 1-2 years. Hoping for $1100+ rent after tenant turn over.

Not a great cashflow now, but after tenant turn over in June, looking to target $1200 rent with minor rehab. Will refinance after 1 year and try to get it fully funded using conventional.

I started exploring the REI during Dec, 2020 and spent lot of time in BP and gone through lot of learning process. It has been great fun so far and challenging BRRRR is easier said than done and all markets are super hot right now and hard to find a good deal..

I do have another one closing next week in Kansas City MO (Blue Springs via Roofstock). Will share more info once closed. There is a third one in contract as well, but closing only on Mar 31. Excited :-) 

Thanks all of you for the help.

@Joe Villeneuve Thanks for the response. I am just trying to understand this specific 10% down second home option with 14 days delayed rental option and if that violates FM guidelines. I guess you have not heard these offers by some providers which attracts lot of new investors. Trying to understand if that was legit.

Hello BPers, 

Having lot of fun last few weeks looking at different markets and closing couple of properties in Feb. Will share more once closed.

I wanted to get people's thoughts on some ideas I heard from some reputable TK providers. There has been lot of attractive deals with 10% down second home option for new construction homes in few cities. 

It is really interesting because, as an investor, we are only putting 10% down and even with PMI, if the rent value is there, it will still cash flow. Also, the interest rates would be really attractive as well due to the second home loan.

Here is the problem.. The requirement they state from the lender is that you need to sign a affidavit that you intend to stay for 1 year in the home to have this as second home option, but you are only required to not rent for the first 14 days and rent the home after 14 days or so.

I had done lot of research on this and there is no place that it mentions about the 14 days or so. Every web site states that you should not rent it for the first year. I initially thought that this is more of a lender option where some lenders might come and say we could do this option as we will not go after the investors (which would be OK if they want to make more business this way).

However, after talking to few of my local lenders they all state that this is not a lender guideline but more of Fannie Mae guideline and as an investor, it does not fall on the lender to enforce but more on the investor to make sure they follow the affidavit signed with the lender. Especially if there is a audit on this loan, this could be considered as an "occupancy fraud". In this case, the lender won't be liable and it would fall on investor and he/she would get into trouble. 

I know lot of newbies might go after such loans,  due to the benefits it offers and wanted to understand if anyone else had thoughts on this.. If this really not a big deal or would be considered fraud.. Since this is being offered by some reputed TK providers, I wanted to understand, if this has been vetted by fellow BPers and may help some new investors choosing this option either way(including me).

Thanks Mark. I will let you know. Will connect..

Thanks for the info. Makes sense :-) @Andrew Weiner

Also, might be another rookie question.. I understand markets like Bay area/Reno makes sense for lot of people to rent than buy homes due to the inflated prices. However, what does so many people in OH/AL all these new trending markets to motivates people to rent for $700-$1000, where they can easily buy a home for $50k or so with $300 or so payment per month. 

Have anyone explored Sauk Village near Chicago? Received some referrals there and would be interested to know what the community thinks about it?

Thanks all for your suggestions. I have been doing lot of research last night on the Columbus, Toledo, Dayton and Cleveland. While Dayton/Toledo does present attracting price ranges but I could not get a feeling for the rental market there. Most listings I saw were vacant and was bit worried.. Cleveland does have good options too and having James's guide helped to avoid the red zones.. After spending lot of time on Columbus I did feel that it offers good deals for duplexes. I am going to connect with some experts here and try to build the team first.. Thanks again all..

The issue I feel with Youngstown/Boardman might be finding the good team there.. Some good deals on 4-plexes but not sure about the PM team that can handle it for OOS. Hopefully can find referrals.. 

Interesting.. Let me review these cities as well tonight. @Mike D'Arrigo