All Forum Posts by: Paul Wurster

This seems like an opportunity. You could justifiably offer low and make a contingency that they not renew the current tenants. They are probably on a month to month now. Just make sure you get to inspect after they move out.

As far as I know, the military clause allows you to break a lease legally as long as your orders make you move more than 50 miles. If you have orders, it doesn't seem like you can break the lease because you knew. It would be more ethical to request a month-to-month.

Get the parents to cosign on the lease as well.

Ignorance.

I remember my first few investments.  I kept saying, "this seems too good to be true."  That slowed me down for a while.  Then we kept going and going.  Investing is slightly more comfortable now, but there is still that trepidation every time you buy a property or find a problem.  

The difference between me and the big guys is that they have done more transactions or tried more things than I have.  

@Richard Rockwood 

Don't be afraid to ask around about cash out financing loans on this property. Banks are investing in notes just like we are investing in properties. They go in waves. The local bank that I have been using would give me 85% or ARV. This was always more than what I had put into the property. I did this several times. Other local banks would only give me 80% of what I had into the property. The terms were usually 20 year amortizations with 5 year balloons.

Just call around and ask.  I've had more luck with smaller local banks.  My first loan in Montgomery was an eye opener.  The Vice President of the bank wanted to do a walkthrough.  He knows all of the loans and property histories of several neighborhoods.  He liked our numbers and the people that referred us.  It is a much more personal world than just plugging numbers into the internet.  Don't be afraid to ask around.  This is how we got plugged into so many of the other services that we still use today.

Also, remember that this first property is more about education than anything else.  You don't have to hit a homer at your first at bat.  

Get a mortgage on this property once you have it finished and rented. Use the proceeds to pay cash for the next property. 

You can seek financing after you own the property just like you would at the time of purchase. If you can find a lender who will give you 75-80% of your ARV, you would get $48,000 back. If you only put in $40,000, then you could find another house and do it again. Also, you would rental income. Even with the debt, you should be $300 or so positive cashflow a month. Why do the flip with numbers like this? As a rental, your next house would be free and you will have a new source of income.

I'd keep it as a rental. You can always refinance it after you are done and you have a renter in it. This will make your cash on cash look better. It will also start your long and successful track record.

You paid retail and financed 100% of the house. It isn't your fault. That does not cashflow anywhere. You could try to refinance and put more down if you want to make it cashflow.

I just moved last week. I do have good property managers there if you ever need them. They are investors themselves with 200+ units in town.