All Forum Posts by: Craig Steltz

All,

I recently applied for a mortage on an investment property. There was a small non-refundable fee for application. I went in thinking there was absolutlely no way it could be declined. I have perfect credit. Meaning 800 or higher. Plenty of cash/investments to pay for the property many times over. So I believe I couldn't be rejected.

I even asked the lender if mortage lender if there was anything that could stop this and he said the only thing could be the area. I asked him what do you mean the area? It's in a decent part of town what issues could there be? He just said there could be a reason why the complex could be rejected. I asked why? He said sometimes it just happens.

Well come to find out they rejected it based on two reasons:

1. Owner occupancy is like less than 10%
2. One owner owns a high percentage of the units.

I was livid over this. And I demanded a refund of my application. In my opinion this is their restriction and not mine. And if so it needed to be explained ahead of time. These were facts I could of researched ahead of time. In my opinion the mortage rep was negligent in explaining these issues.

What is your opinion? Do I have any ground to stand on here? I believe this is near fraud to not answer my question when I asked what could possibly be reasons for not accepting the loan and he provided not feedback. And he damn well knew this was an investment property area and the owner occupancy would be very low.

Hey all. I came to this forum back in April with a bunch of questions. Thank you to all of you who took your time to answer them and help me out.

I wanted to provide an update of what has occured.

1. I purchased a condo at a foreclosure sale for $83,000. The condo is now leased to own at $999.00/month. Looking good there.

2. I purchased an REO condo for $92,000. Just closed on the sale of it today and walked away with $7,000. Not huge but you know what I probably put in 10 hours of work. Not bad.

One thing I learned is that I like this business. But I like to work close to home. Call me lazy but between gas prices and travel time I want to be close to my properties. There is a garden apartment building, 6 unit, for sale about 1 mile from my house. Listed at $295,000 for the 6 1br units. I'm thinking I could get it for $265,000 with no agent. The rents are $500/month but there is a $100/mo condo fee. There are two nice pools and it is an upscale apartment complex. What are your thoughts on this?
I really like the idea of being close. How difficult is it to get financing on a 6 unit property?

Lastly I purchased Quickens Rental Property manager. I recommend it to anyone that is new. Real easy to use and makes it easy to manage the paper side of properties.

Take it easy and keep making money

OhioBuckeye

I recently purchased two foreclosed condos that I am renting. I purchased the condos using a home equity line of credit. Now I would like to convert these to a mortgage in order to allow me to purchase more properties to rent.

The purchase price was 83,000 for the 3 bedroom condos. The appraised values in the area are $105,000.

My question is does this equity count torwards a down payment? meaning if the bank's appraiser agreed with the 105,000 would I already have 20% and not need to put cash down?

Also are 30 year loans easy to get? Or is 20 the standard for investment properties? Lastly what are current rates for investment properties?

Thanks to all my money crazed friends in advance. You've been a huge help! :beer:

OB

shoot. The 1031 won't work because I've just read that the government doesn't consider buying to flip as hold holding for investment.

Hot damn....I knew nothing about the 1031 exchanges. I'm going to meet with a title company this week and get this all figured out. I just bought two condos I plan to flip and this looks like a great way to take the proceeds and invest even bigger properties without paying taxes.

Thanks!

All,

Other than having to pay tax on your capital gains are there any other consequences? Can it raise your tax bracket. or have ony other impact?

If you make $1,000,000 and then pay your tax bracket amount say 25% or 250,000 is it like nothing ever happened then?

Thanks

OB

I'm curious how most of you handle evicting current residents after obtaining the lien to a house. In my case the houses I'm looking at are higher end. 200K and higher homes. In Ohio at least that's a decent house :)

Do you knock on the door and ask them to leave? Or just to see if they're living there? Do you call them on the phone?

I've seen where some suggest offering to help them with the first months rent to leave.

In Ohio you can go through legal steps to get the current residents physically removed but it seams like would be something to attempt to avoid.

Just curious how you all handle this issue.

Thanks OB

I created an LLC because originally I was planning on purchasing a couple of condos to rent out locally. But the seller did not accept my offer. I am now looking at a property in foreclosure that is due up for auction next week.

My question is can the LLC be used in anyway with a foreclosure deal? Or will the title deed be put in my name only and therefore the LLC can't come into play? My plan is to sell the house after the deed has transferred so there isn't as much liablity as renting so maybe there is not as much need to work under the LLC? Any thoughts?

Thanks

OB

Ok after feedback from all of you I have made a couple of decisions. I don't plan to buy any rental properties unless a real deal presents itself. I've also decided that I will not deal with section 8 or lower income tentants because of the potential pitfalls. I think dealing with higher end clients will be a better option. The issue is finding properties with cash flow.

I've decided to turn my attention to sheriff's auctions. Here I believe I can find houses that can be purchased at up to 33% below market value. A lot fo these homes are in great areas and can easily be turned around and sold for a small profit.

So my questions. And I always have questions are. What about this plan:
Attend Sheriff's auctions where I will only purchase properties between the initial bid price(66%) and 75%. Then quickly as soon as I can transfer the deed sell the property at an amount less than market value in order to attempt to have a quick sale.

I realize that the properties still need to be researched and a true market value determined. Meaning I can't rely on the county appraiser. Do any of you know if the appraiser in the case can only assess the value from the outside? I have to believe that a lot of tentants totally trash the insides because they have already lost the house and simply don't care.
Any horror stories out there?

Ok so how about this plan? I'm sure this is nothing new but just want to hear about common issues/pitfalls. Can money be made doing this?

Thanks

Ohio Buckeye

Thanks for the response. yes the taxes were wrong and I corrected he post. It's per year for each unit. so roughly 1900/year.