All Forum Posts by: Max B.

Thanks for the replies. Its not shady, this is my good friend who doesnt want the entire liability/debt of the property. He will essentially pay fair market rent, then we will deduct expenses-taxes,insurance,repairs and split the difference from which he will pay his loan for his half and I will be making a return on my half. He doesnt plan to live there forever, eventually we will rent the property out to someone else.

My good friend and I have an LLC in Ohio where we own outright a duplex that brings in a 10% return on our investment after expenses. Our business has no debt. My friend has moved to Tampa where he works for an adequate income and also has no debt. We want to buy a house there in Tampa. He would live in the house, but he wants us to be in on it 50/50, as we are on the duplex in Ohio. I personally have half the price of the house to put down on the property. It seems really difficult to get a loan for the business as compared to consumer. Even with 50% down I don't think the rate would be nearly as good. I'm thinking I should put the 50% down and he finance the rest (since he will be living in the house and he has plenty of income/no debt). Perhaps we setup a new partnership in Florida for this property.

Anyone have any insight into the best approach for this?

Thanks for the responses.

I have a partner who lives in the area now. We offered $46k, seller pays closing costs. Wish me luck.

Thanks for response Brooks!

'm pretty sure the $700 is right for Section 8. I'll probably rent it out to non-section 8 tenants though. So I'm hoping to get $500-$600 per unit.

Where I live, I rent a house for $1800 a month (i know it sounds like such a waste) that would cost me $700k to buy. I think I'll keep renting for now.

I'm looking at buying this property non-owner occupied, and it's my understanding that even though I have substantial capital, excellent credit, and mortgages are at record lows, that rates for non-owner occupied are 7%+. I'm not investing all my capital into this property, and the capital I am investing isn't able to get a return anywhere near 7% without some somewhat substantial risk or very long terms.

I'm more just wondering my original first question: Is this a smart investment in terms of rents (have I calculated the costs accurately, and have my 50% rule right)

For about 8 years I have been trying to get into the Real Estate market. I have been saving my money, and think I have finally found a deal worth pursuing.

The property I'm looking at is listed for $54.9k, It appraised in 2009 for $130k. So the taxes are pretty high, but I think I still can get 2:1 rents. Better yet I plan on buying the property cash. Its a 2400sqft Brick Duplex, in the city. Across the street they are renting a 3/1 for $800 a month. The property is bank owned, and I plan on offering $44.9k cash.

So I'm hoping to get it for $50k
+ $500 inspection costs
+ $700 closing costs
+ allocating $8800 for repairs and an initial bank for taxes, vacancy and insurance.

So I'm calculating based on $60k, which like I said I have cash. Yet I'm want to think of it like I have to borrow the mnoney - $60k @ 4.5% for 30 years (i know non-owner occupied loans are higher) = approximately $300 a month + $125 taxes & insurance = $425 a month.

The place is two 3 bedroom units, but the third bedrooms are small. Bank claims the units were rented @ 700$ a month through section 8. So I'm thinking they should rent pretty easy for at least $500 each side.

$1000 a month income, $425 a month mortgage/tax/insurance.

Unfortunately I live out of state now although this is my hometown and I come back to visit 3 times a year on average. I was thinking about having friends and family help me manage the property but now I'm thinking about a property manager.

Two questions for my peers here at BP
#1: Does it sound like a good deal/investment overall?
#2: Should I consider a property manager and can I afford it?

Thanks for reading

i fear the one i get will then be filled with termites and have a cracked slab and a leaking a/c.

oddly a friends brother has a house he wants to sell right down the street. the one i offered $236k on was 3 BR 2 bath 1500 sqft with .75 acres. this one is a 2 BR 1.5 bath with 1 bedroom 1 bath guest house. my friends brother said he plans to list for $400k. i told him i am only approved for $350k and he suggested i dig up more money. the yard was nicer plus guest house but overall not worth $100k+ more. my appraisal is that the one i was rejected on sold for $250k-$260k. this one that he plans to list is probably worth $320k right now. zillow has it at $340k.

now they are posting that sales in SoCal are twice what they were last year. i see lots of places on market disappearing and not many coming on. i think the low mortgage rates, pending summer, and low prices have attracted enough buyers for now. however i believe the market still has room to fall, its just not going to go straight down.

dont like this process of blind bidding. found out today the offer was rejected. thanks for the responses!

I put an offer in on a place on 3/25 that had been on market since 3/19. offer was over asking price of $238k on $232k with 20% down and preapproved with no termite. they asked on 3/31 for some initials at which time they said the offer is complete and it takes 4-5 days to hear from client. checked on 4/7 and they said they have 45 offers and havnt figured it out yet. now its 4/14 and still nothing. do they have any sort of time to respond?

i guess this is normal and i should just get more offers out there. probably higher over list price? seems this blind bidding war is a little rigged.

any input is appreciated. luckily i might have another option up the street through a private seller, who is already an aquaintence and the home is not listed.