All Forum Posts by: Pepper Bradford

Had another call today, so currently batting .250 on my 8 mailers. This property is a 2 story 1/1 duplex. Rents are $650 up/$600 down. No mortgage. Most worryingly is that there's currently no flood insurance. In an area where insurance could be anything from $400-$800. Thinking there might not be enough there to cash flow. But then again, all the BP videos say that you shouldn't care if your first property cash flows...its main purpose is to get you to your second property. 

anyway, his agent called me and apparently the owner is open to seller financing, but his #1 concern is how much of a down-payment I can make. Odd...

I'm looking for duplexes on the MS Gulf Coast, so I used the county tax GIS site to identify every duplex in an area I liked & sent out my first 10 letters on Monday. Personal first class mail with a photo of me & my wife. Got a call today from one of them, and spent a nice half hour getting to know the owner. Sadly the duplexes are paid off (he inherited them a year ago when his mom passed), so no Sub To option. But he didn't say no to seller financing, mainly because he knew nothing about it. He said he was going to ask his brother in law, who is a banker...I can't imagine he'll get a good opinion about it from a banker!

He doesn't know what he wants to do, but said he's going to give it 6 months. Told me to come by next time I'm in town, and said he was going to keep my letter (said he'd had lots of offers, but sounds like they didn't make a good impression). Then we talked football and seafood for 20 minutes. No deal, but a good opening...he has several duplexes, as well as several empty water front lots. 

This would be my first real investment (not counting renting out our old house), and it's my first attempt at off market deals. Enjoying the experience so far. 

Thanks for the great advice! I have to admit I didn't know how well it would go over, telling some tenant "Hi, I'm the new owner, and I need your place, so get out!" so I like the idea of making that the current owner's problem.

We are VERY new to this, having only read Rich Dad 3 months ago to start the journey. My plan is to start with a duplex (though tri or quad would work also), and are looking at the Pascagoula, MS area (MS Gulf Coast). We live 3.5 hours away, so to qualify for owner occupancy and the low FHA down payment, we are looking to put my 21 year old son on the loan. He is heading into long haul trucking, and doesn't care where he lives, since he won't be home much anyway. Then we hope to do it again 366 days later!

My plan of attack is to send a letter to every duplex owner in the area and offer to buy the property. What I'm wondering is if I need to only be looking for properties with a vacancy? He can't very well "owner occupy" if it's already 100% rented. Is it ethical to buy a property with the intent of kicking someone out? 

Is there a good resource for listings that have expired? 

Loved what I heard on a "recent" (archived) BP Podcast about using craigslist to find rentals, then approaching the owner about purchasing. Is there any way to search back in time to find properties that were up for rent recently? Same for other sites (realtor.com, zillow). 

I've been trying to analyze a "deal a day" for the last few weeks to gain some experience (in truth it's been more like 3 a week) One of them has really turned into an interesting case. I've gotten a lot of numbers on it, and the more I learn the more intrigued I am. I've gotten the rent rolls, and am waiting on an insurance quote. It's currently only about 30% occupied, and been that way for the whole year. This seems to be due to being under managed, as far as I can tell, since the neighborhood is fine, and property was rehabbed a few years ago. I do still need to nail down a few more expenses. I talked to a commercial lender and got a ballpark rate and monthly payment. 

As far as I can see now, God's got 3 main doors that He needs to open for this deal to go through (in reverse order):

3) The insurance numbers can't be prohibitive (flood & wind zone). 

2) Bank will need to lend on potential income, not current NOI. Lender said they might could do that.

1) I don't have the $70,000 needed for a DP. Not even close. And don't currently know anyone that does. 

But I'm not going to let any of these deter me. I'm going to keep going as if all 3 are green lights, until such time as the deal either dies or closes. 

I think I must have asked the question wrong. I don't have a problem with the lender requiring it, regardless of the % ownership. It seems perfectly natural to me. 

My question is about what the Investor is going to think. I'm asking them to put up the Down Payment, and "oh by the way" they have to jump through all the hoops as if they were borrowing the money themselves. Isn't this going to kill the deal for them?

I'm concerned that an investor isn't going to want to guarantee the loan, but instead just give the cash and get the returns.