All Forum Posts by: Nathan Reed

Thanks for the reply Dave!

I read through the loan docs and I couldn't find anything that says that I have to provide any more information. The only "invasive" thing that it specifies is that he can come inspect the property when he likes with proper notification. 

Great idea about the discounted payoff. I hadn't thought of that. Although, I did meet with my bank to see if I could just refinance and pay the loan off. Sadly, my bank wants 1 year of seasoning so I was going to explore some other avenues. You wouldn't happen to know any PA lenders that don't require seasoning on investment properties would you?

Hi everyone,

I had bought a SF rental property in early August from an investor that was selling his portfolio. I paid him 20% down and he seller financed the other 80%. Two days ago I received an e-mail from him stating that he is selling the note off to an investment firm and needed my SS# and employment history for the firm.

I'm not just going to send him that information no questions asked. But, my question is, should I have to provide him or the firm any of this information since I am not technically a part of their transaction and what should my response be?

I've never been through this so I don't know what the norm is. Any input is greatly appreciated!

Best thing to do would be to find a real estate attorney in your area. Tell them what you plan to do and ask them if they have a blank contract that they can send you. (Expect to pay for a consultation. Usually from $100 - $300.)

If you don't know a real estate attorney ask the community for recommendations!

Wow, 400,000 leads. You're gonna be busy!

If you are newer you may want to start mailing around your area. In the beginning you typically want to be able to go out and look at the properties so that you can learn more and so that you can better estimate the repair costs (so that your cash buyers don't get angry at you because you sent them a bad deal). 

After you have mastered that, I would mail in the areas where my cash buyers are and start to build your cash buyers list in the areas where you have a lot of leads. Then mail to those areas.

You may be able to make arrangements with contractors in distant areas to give you a quote for the rehab costs on potential deals so that you can present that to the cash buyers (so that you would have a close estimate). In return you would recommend them to the buyer.

If you wholesale you won't actually be buying a property unless you do a double closing. It could be a great way to make some money to put toward a multifamily purchase in the future. But, I will warn you, if you go the wholesaling route be prepared to market like a mad man and set aside an actual marketing budget. Making it in wholesaling is totally dependent on the amount and quality of leads that you produce.

Now, if you actually purchase a property then your first time home buyer status will go away. So, make your first purchase count!

Wow, well, unfortunately we all typically have to pay for our education in the beginning by failing a few times. Sounds like you analyzed the issues that you had and learned from them which is definitely key. Don't let it get you down and keep going! Thanks for sharing your experiences.

I personally would just keep the one you have until it expires and then in order for him/her to renew he/she would have to pass my tenant income qualifications. Tip: If you go this route let the tenant know well in advance so that if he/she won't meet your criteria he/she will have time to find another place to live.

There's a lot of good pitbulls :) But, the question is do you accept pets? If so, will your insurance company drop you or raise your rates because they have a pitbull mix? If so, you need to add on your tenant qualifications sheet that you do not accept pets that are x, y, or z breeds unless they are service pets (you can't discriminate against people having service pets). 

That's always a tough one. You could sell and move into an apartment while you find your multi-family property, but then you will probably have to sign at least a 6 month lease and you would be moving twice.

What I would look into is possibly taking out a home equity line of credit (HELOC) with a bank or credit union (Check with a few and see what loan to value (LTV) they will give you), use that money for the down payment on the multi-family, move into the multi-family, then sell your house.

Now, I don't know your market at all so I don't know if that's going to provide enough down payment money, but there's always a way if you're hungry for it. Maybe pair a HELOC up with some other loan avenues like a 401k loan or a loan from a nice family member (offer interest on the money for their help). And if none of that pans out, get serious about cutting your living costs and save.

Another thought: Start looking for multi-family properties soon (not just on the MLS. Try Craigslist, etc.). Ask sellers if they're interested in providing seller financing. If they will finance the loan you may be able to agree on a lower down payment. You never know until you ask!

1) Personally, since there's not going to be any good tenant references, I would just do a credit check on her and her husband and use that to gauge how seriously they take their financial obligations.

2) I've seen a lot of families where the husband has a full-time job and the wife primarily takes care of the kids and works a part-time job. There's usually a lot of turnover in those part-time jobs so I wouldn't consider it a big red flag (if they do in fact have a similar situation).

*Note: I would also verify both of their incomes and do a background check on each of them. (Have them pay for the background checks and let them know up front that they will have to pay for them as part of the application fee.)

3) Don't be scared. You should have the qualifications that you require of any tenant written down and kept in your home/office so that you can back up your decision when you turn someone down. (This helps thwart discrimination claims!) Also, it's okay to be a new landlord. You don't have to hide that fact. Just learn to be accommodating but fair and enforce your rental contract when you need to.

So, if everything checks out, awesome. If not, she should understand that you have written standards that tenants have to meet for you to rent to them and that her and her husband did not meet them.