All Forum Posts by: Peter Giardini

Mark,

At the risk of being a bit contrary... are you sure a loan broker is the way to go?

Most "loan" brokers, not mortgage brokers working in the residential world, might be too expensive for a 4 unit deal to carry.

I know you mentioned nationwide... but unless you have a significant level of experience and cash to put into any of these deals, I am not sure that in todays environment you could get financed.

In my experience I have found that the best financing deals are obtained through local banks who do business in the communities the properties are located in. These lenders are referred to as portfolio lenders and usually have extensive experience working with real estate investors.

Remember also... lenders look for three things when underwritting a loan...

1. Your overall financial situation... credit score/history, reserves, etc.
2. The quality of the deallll
3. Your experience with similar deals.

Your job is to convince the lender that you can mitigate their risk in each of the above areas.

So... if you plan on owning 4 units nationwide... you will have to convince one or more lenders that you can own and manage these from a far.

I hope this is helpful?

Pete

I have experienced both. Buying properties with tenants in place and vacant.

My preference as an investor is to purchase the property without tenants. My reasoning for this is based on my experiences.

Consider... in almost every case where a wholesaler is able to get a property at a low enough price, the owner most probably is a "tired landlord" and the tenants that will be inherited more then likely are not very well trained relative to paying rent on time... if at all.

My approach as an investor was to always seek a greater discount if I inherited the tenants.

Here is how the tenant thinks about this situation... they probably have been skating along maybe paying the rents and that is why the wholesaler got such a good deal... the landlord can't afford his/her management style.

So... the tenant knows that when a new owner comes along they will either have to start towing the line and pay rent or start to look for another place to live... but not before they manage to live in the property rent free for as long as their jurisdiction will allow them.

What is the solution?

As a wholesaler you could ask the seller to get the tenants out... but a yearly lease will kill that pretty quickly.

Or... you could go to the tenants and suggest that if they are willing to vacate the property and release the owner from the lease, you will pay them some amount of money for their troubles.

This is known as cash for keys.

In making this suggestion to the tenant also let them know that they can have their entire deposit back... no questions asked if they agree.

As regards the deposit... this is like giving away someone elses money... as the deposit should transfer to the buyer at closing.

I hope this helps?

Pete

The previous posts nailed it... "everything is negotiable"...

But if you don't ask you will never know. I have locked up deals ($100K range for a dollar) and much larger deals for under $1,000. All I had to do was ask.

Hope this is helpful?

Pete

Here is what I have found. Take this all with a grain of salt... because I don't think anything will happen if at all until late October or so.

6/10/2009--Introduced.
Home Ownership Moves the Economy (HOME) Act of 2009 - Amends the Internal Revenue Code to: (1) extend the first-time homebuyer tax credit to all individuals who purchase a principal residence (currently, only first-time homebuyers as so defined); (2) extend such credit and the waiver of recapture requirements for such credit through 2010; and (3) repeal the limitation on such credit based on modified adjusted gross income.

Hope this is helpful?

Pete

Thai,

There have been some really great responses to your question.

I would offer one more point.... In my experience those investors who have money and no plan... soon find themselves without both.

Bottom line... don't just buy a property because you can. Know why you are making the investment, break the numbers down, and make the purchase.

Oh... and yes you can purchase properties at the some really low prices.