All Forum Posts by: Scott Seaman

@Andrew Olson You need to talk to a loan officer and find out how they are going to qualify you. If you're going to be deployed for more than 6 months, they may have an issue with your not actually owner occupying it (VA would allow a spouse to do this in your absence but I'm taking it that you aren't married since you're talking about your brother handling things). They're also going to want to figure out your income situation if you going to be getting off of active duty when you your deployment ends.

Check with the housing office over at McConnell AFB to get a list of local VA lenders if you're looking to use your benefit to buy the house. If not, most of them can do FHA and Conventional financing as well.

If you're looking in Tampa Bay area (or any area that has a need for flood insurance), you should be aware that the National flood insurance rules are changing under the Biggert-Waters Act - and that there are over 60,000 properties in the area that will be losing their subsidies which is increasing their rates 700-1,300%. They will be phased in over the next 5 years for those people staying in their properties or jumping to the full rate when the property changes hands.

This has the potential to bring a large number of motivated sellers into the market (who may not be as motivated to tell you that your numbers aren't going to be anywhere near their current ones)

http://www.arcgis.com/home/webmap/viewer.html?webmap=e0208985e8e64d44bca999325254ff5b&extent=-106.6909,33.1708,-76.9399,43.9898

I don't use a service since so much more accurate stuff is normally available online for free from the Register's office. Every county is set up a little different but once you get familiar with how the system the county that you are looking in works, you can go through it in a few minutes every week to see what's interesting.

Generally you are looking for a Notice of Default (NOD, the code could be some variation). If you are looking in a Deed of Trust state rather than an actual mortgage (like NC) - the first step is usually a Substitution of Trustee since it's typical for the closing attorney to be the original Trustee but when the payments get behind, they want to substitute their own attorney to start the process

Actually @Dawn Anastasi what he should have mentioned was that the old man had dementia to the point that the courts eventually appointed a conservator (too late), that his son tried to pay the bill when he found out that it was past due, that even the Attorney General has been to court to shoot down these massive fees being tacked on.

The article wasn't trying to glorify or excuse the deadbeats but point out how badly the entire program is being abused without any sort of safeguards in place. And the 2nd part of the series goes into the bid rigging by a handful of folks. Sure, there will always be those so motivated by greed that nothing else matters. Somehow they find a way to live with themselves no matter what.

The Maryland company that had bought the lien had already gone to court to put a foreclosure in motion. To lift the lien, the company’s lawyer was demanding steep legal fees and expenses— $4,999.

In addition to money, investors are going to want to know what you bring to the table as far as a way to run a large hotel profitably enough to pay them back and keep it off the auction block again. Is this currently your business or just an opportunity you've come across?

We had looked at using old hotels/motels to house the homeless but the operating costs were pretty high compared to apartments/SFH.

And as someone who provides housing for homeless veterans - no matter how it's phrased, the idea that only welfare cheats need a place is both highly offensive and revealing at the same time. Everyone's got places their tax dollars get spent that they'd rather they didn't; get over it.

Spent a couple weeks down in Tampa/St. Pete looking through a bunch of properties and had to laugh when this showed up on my screen:

It pretty well summed up how I was feeling about most of the "deals" I'd seen up to that point. "Wholesale" deals that are actually $10K added on to the price I could currently buy it on the HUD Homestore. Agents too busy to call you back (and that was a $300K property he had listed, not some $30K dog he didn't want to mess with). Auction.com and the County both pulling properties from sale before they finalized. Things eventually picked up and a few good things look to be working out so not a total waste.

Plus a great new screensaver to remind me to doublecheck everything I think I have learned before I get ahead of myself and buy an Income Reducing Property. :)

56 months looks like simple breakeven number. Stay less and you come out cheaper, stay longer and you're better paying that up front lump sum Since money is fairly cheap right now - is there something better you could do with that $5K? Pay off a car loan or something that would be a bigger savings?

@Mike Heth Since you can't buy VA as anything but an individual, you basically list the income from your rental and it's share of the expenses on Schedule E and file it all on a 1040 at the end of the year. Sounds complicated, but HR Block or Quickbooks will handle it easy enough (possibly Quicken) so no need to rush off hiring a CPA right off the bat. Spend it on the mortgage and repairs, but make sure you set aside money for maintenance and other hiccups (1994 means you're likely looking at an almost 30 year roof and with appliances having a life of 7 years normally, some of them could be coming up for replacement as well). Sock away as much cash as you can that is left over from the rental as well as your quarters allowance and after a year, you could buy another 4 plex OO with a low down FHA loan - or refinance this one to free up your VA and do it all over again - provided your wife is willing to move that quickly with a 3 year old).

Buying in IL doesn't automatically change your HOR so you'll need to discuss your situation with your base housing office to see if it would be beneficial for you to change it or leave it as whatever State you currently claim. Also keep in mind that as long as you are active duty, some of the capital gains rules won't apply for the whole 2 out of 5 years owner occupied exemption.

And don't get too caught up in the formulas on here - they are valid and pretty solid to go by - but you're looking at getting into an income producting property with zero down, fixed rate, low interest financing for 30 years and Uncle Sam is going to give you a nice tax free check every month to pay for your quarters while in reality your neighbor is buying your property for you. Your out of pocket $200 a month for a place to live plus utilities which is less than the other unit generates in depreciation per month (can't claim it on your side until it's rented out to someone else). The other expenses you simply divide in half for a duplex and deduct that half from your rental income - half the lawn mowing, half the snow plowing. Half the property tax bill. More than half the insurance policy (your agent can give you a breakdown on that one since your policy needs to cover you and your belongings as a homeowner as well as the property next to you as a landlord). Finance in your funding fee and negotiate the seller to pay all your closing costs (money is cheap now - $3,000 in lower sales price but you pay that much out of pocket for closing fees isn't worth it - the difference in the payment is $15/month and it's deductible.) I used to own a real estate office in an Air Force town for almost 10 years - we listed the houses and showed the seller what they would net if they paid all closing cost vs someone negotiating that much off the price. Same bottom line to them. For the buyer, they had to come up with about $500 out of pocket total.

So, how did you determine that you are getting the property that much off of market value? If that's an accurate valuation, then there are some problems with the property or repairs that need to be made that you maybe haven't found yet. Why is the seller volunteering to leave almost 10% on the table? Seriously, that's as likely as him handing you a $20K check the first time he meets you - gonna have to do some more digging to figure out why.

@Mike Heth Once you do that initial search off of one address that you know is a 4 plex to get the code, then you can usually do a search for all the same code. Every county is different, in some markets that overlap several counties they can be totally different and you just have to learn what the software will do in the county you are looking. Bigger places tend to do a bit better at making the information easy to get but that's not guaranteed. If you get lost, message me the county site info and I'll see if I can help you find what you're looking for.

If you aren't already familiar with VA loans, you should be talking to a lender now to get pre-qualified. If you can, find what they call a 'direct endorsement' lender. That means that they will be the one making the final decision on the loan. If you are going to be using the income from the other rental units to qualify, be prepared to show the bank you have some experience managing rental property or that you have 6 months PITI in the bank to fall back on.

They'll usually count 75% of income after backing out some standard expense numbers like taxes and insurance. 41% DTI ratio but can go as high as 46% if the lender can document that other circumstances justify it. Don't forget that they also include a monthly figure for "family support" based on the size of your family. It would be a good idea to have your pre-qualification letter in hand before talking to individual sellers. It'll show them that you are serious and a number of sellers don't want to mess with VA financing because the appraisers may add conditions that have to be fixed on the property (in all reality no worse than FHA). This shouldn't be as big an issue since they aren't taking the property off the active market and potentially losing buyers only to find out that they can't close do to a bad roof or something.