All Forum Posts by: Orion Walker

Hey @Joseph Cooper, I’m a realtor these days serving Lake and Mendo and beyond. There are definitely opportunities if you are careful. Let me know if I can help with anything :)

Thanks for sharing this success story. I've done a couple private second mortgages (note and deed of trust) on rental properties that I own, but I may look at a HELOC or something similar on latest house. We are currently doing a bunch of fixing up. We have a two year owner carry interest only loan at the moment, but we have to refi and pay out the owner by the end of the two years. Hopefully when we go to refi we can pull out cash, or we may look at doing a Fannie May Homestyle loan sooner, so that we can get all of the renovation/remodel stuff done, and wrap that expense into the loan.

Hi BP Folks,

I'm a buy and hold guy presented with what I think is a good looking wholesale option. Is it?

The distressed seller wants $10k for a six month option to purchase at $420k. As is I would say it is worth $475-500k. Fixed up a little nicer it could go for closer to $600k. 

The only significant catch on the deal is that the seller might insist on being able to stay in the back unit for 6 months after sale. 

I would buy the property myself, but I'm just not sure I can swing that right now, so looking at wholesaling it. I have a pretty decent local network, so I feel pretty confident I can find a buyer. 

Does this sound like a good deal? 

Suggestions? Things to look out for? 

Thanks for any/all input!

Hi @Account Closed, I own the house that I live in free and clear, but it is a family property (other family owners) so I can't use that one as collateral or pull money out of that property. 

I am part owner of three other properties that are cashflow rental properties, those are the ones I was referring to in regard to equity.  

Hi Folks,

My girlfriend is moving out of her house and selling it. She expects to get about $100k from her portion of the sale. What's the best strategy to use those funds to build our RE holdings/business?

I know this is one of the most asked questions on BP, and I have, and will continue to read through the old threads, but every situation is a little different, so any thoughts/feedback would be much appreciated. 

I'm trying to decide between hard money to buy something for cash and do a flip, or maybe find a seller finance deal on a small multi and put the $100k down, and do the house hacking approach, or I'm really fond of the BRRR strategy, but so far I haven't navigated the refinance/pull your money back out portion of that strategy. And I'm sure there are a million other approaches that I'm overlooking.

A few of our particulars:

- While she is selling her house we will live together in my house (which I own free and clear), but it is a small house in the country, and between the two of use we have a lot of kids, so ideally she/we will buy another house or multi in town. Or we may build an addition on my house.

- Average 3/2 houses in our area cost about $350k. Getting much cashflow around here is challenging, but I've managed to do it so far.  I don't think we would consider out of state investing right now. I know that's a big hot topic, but I would want to travel to wherever we would be investing, and I don't think we have the bandwidth to do that right now.

- I've done a few significant buy, renovate and hold projects that are producing good cashflow, but I'm carrying a fair bit of debt, so not in a great conventional loan position, though I do have a steady W-2 job. My girlfriend has had her current job for less than a year, so she doesn't have a lot of loan strength either. I don't think I have enough equity to refinance and pull money out yet, plus, to refi I think you have to do a conventional loan qualification?

- We would like to build the business, not just focus on the next deal.

 What would you do? Thanks in advance for any and all comments/suggestions!

-Orion

Thanks for the reply @Steve Vaughan, I haven't really considered a conventional financing approach because the over all purchase price of the property is well beyond what I would qualify for. Purchase price will probably be around $800k. I suppose it might be an option to do a conventional loan on one of the properties. That would certainly help on getting her more money quicker. 

Thanks! I hadn't really thought about this option. 

Other ideas/suggestions out there?

Thanks for your reply @Ellis San Jose. Yes, I will definitely see if she is interested in extending over 20 years. 

Yes, she was saying it needed to be her primary residence for 2 out of 5 years, and she would need another year to have that be the case. So with the $250k exclusion, that reduces her tax burden by that amount off of the sale price correct?

Another piece of the puzzle is that the property is actually 3 lots, with houses on two of them. That increases options, but I would need rental income from both the properties with houses in order to make the numbers work. 

I'm unclear on how the buying the house and leasing the land would work in relation to the 1031. If you have a minute to flesh that out a bit more that would be great. My understanding from her was that she wouldn't be able to do a 1031 because I wasn't paying enough upfront for her to turn around and buy something else. Maybe she could do a 1031 on the property that isn't her main residence and use the residence exclusion on the other one. 

Any additional thoughts/explanation/ideas from folks out there?

Thanks!

Hi Folks,

I'm in conversation with a lady who has a property that I would really like to buy. She owns the property outright and is open to holding the loan. I made her an offer of 100k down and the rest over 15 years based on using a portion of the cash flow to pay her, but she responded that it wasn't enticing enough. 

I'm looking for ideas on how to sweeten the deal. Currently I don't have a lot of flexibility on a larger down payment. I can come up some on the monthly payment, but I'm wondering if there are other ways to structure/adjust things that might work best for her. 

One of her issues is dealing with the tax impact of selling. If she lives there for another year she said that will significantly reduce her tax hit. I was thinking I could offer to do a lease/option type arrangement so that we don't actually transfer title for a year or two. 

I've also thought that I could adjust interest rate and length of pay back to either reduce her tax burden and/or increase her interest income. If I pay a higher interest rate but lower the purchase price does that help her on taxes, or does she just take the hit paying taxes on the income from interest?

So, to summarize, I could suggest a lease/option type arrangement, I could increase the purchase price and monthly payments a bit, I could see if she wants to extend the loan timeframe and pay more over a longer timeframe... Any other bright ideas that might help to make this more appealing to her?

Thanks for any/all ideas and input. 

-Orion

Great thread. Goes well with the latest podcast episode (210). Sounds like @Brandon Turner, is finally taking the plunge and trying this out too.

I've got a couple properties that I'm thinking about trying. One quick tip would be to contact the local vacation rental companies and ask questions as a potential client. A lot of companies will do a free assessment and give you an estimate of expected occupancy, income, expense, etc. 

The company I spoke to charged 35% rather than the 10% mentioned above, but that was for full management, including advertising, booking, cleaning, etc. 

So far I've been scared off by the logistics of getting a place set up for it and getting a management system in place. I'm an hour and a half away, so everything would need to run smoothly without me onsite. It does sound like the profits would be significantly more than my current long term rentals.

I have a couple small structures that currently aren't really used for much. I'm thinking I can retrofit into cute little short term rentals.

Thanks for the helpful pointers folks.

upgrade current properties