All Forum Posts by: Pete Schmidt

I agree with Scott.  By the time you find someone to find the used one, pick up, install, and cart off the old one, you would have spent more than buying new, especially when they have their sales.  Of course if your not in the area, you can’t use my method of keeping an eye out (or getting a call from employees) for the scratch and dents.  I have picked up $1600 refrigerators for $500 and all the damage is to the back side that was not even seen. So when I know I have a project coming up that will require some or all, I will pick them up when I see them and put them in my storage unit.  Doing this I have been able to outfit most of my rentals with stainless appliances for less than black/white ones could be purchased for.  Plus buying new gets you a warranty, where as the used ones, who knows how long you have.  

Last year I had a few that I have been able to tie into a commercial loan, but that's only because it was on the same parcel of land as a brick house. 

In April, I picked up a double wide on its own land that is cash flowing great.  Unfortunately I cant find anywhere to refi it to pull my cash back out. I have tried just about every bank/credit union in the area, and no go. There is a marker in SC for this type of lending for sure. Though they are hard/impossible to finance and refi, they are the best cash producing housing in this area by far. 

I am looking for multi family apartment, townhouse, or condo buildings in and around the Myrtle Beach, SC area. Nothing turnkey or recently updated, looking for places that are run down and needs rehab. 

 Myrtle Beach is blowing up for sure. Prices are high for the income people are getting in the area, but the deals are out there if you look long enough. If I can help you out with anything, let me know. 

Shiloh Lundahl, this is all your fault!!!  Haha  

I believe it was your BP pod cast interview I just listened to that got me into this idea. Now I see there is a lot more to it... and you made is sound nice and simple. Still sounds like a good idea, but I have a lot of learning to do. Thanks for the feed back, it is appreciated. 

Thanks for all the feedback guys. They are having issues getting financing since they just moved to the area and starting new jobs. However they do have a large sum of money to put down from the sale of the house they just moved out of. So I though that this may be a good solution to help them out while getting my place rented for a little bit and then sold. This being something totally new to me, I just want to make sure the I's are dotted and T's crossed. I know with 100% certainty that what I agree to will be upheld on my end and no shady business, but never know what they have planned or how they may change over the next year or two.  I understand with the keep it simple and separated and agree totally.  

Yes sir, I did plan to have a sales agreement and forget to mention it.  So with the 3 separate docs, and doing just 1 lease option this year, does that allow for them to apply money down to the mortgage? They want to put a large amount to the principal to lower their monthly payments.   Feel like everything I’m reading says they can’t apply any money or get credits to the purchase.  To clarify, this is a home someone will have as a primary residence, not an investment. They are on board, I am good with it, and it will be a fair deal for both parties, just need to make sure the govt. is good with it and we are not violating any laws doing so. 

After reading a lot about the lease option strategies, one thing I have not seen much about is an exception for home owners looking to do one or two of these a year. I understand if your are going to go into the mortgage business and begin financing people regularly, then you need to become a broker and get a license. However, reading over DF, the way I interpret it is that there is not any violation if I was to create a standard lease, then a separate option form that they can apply money to the purchase price, as well as an option fee of say 5% as long as the property is appraised and the sales price is within reason of the appraisal and they are qualified to make the payments. This would be written up by an attorney of course, but not sure what I am missing with this. 

My credit score looked like a yoyo because of doing that. lol My rehab last year dropped mine from 810 down to 730, then refied and it went up to 830. Now its down to 710 due to the 2 rehabs I just finished up. A few more months and should be back to the 800's again. Would suggest finding other means for sure, since most lenders dont like to see that much cc debt even if you are making all payments on time and pay them off each time. 

I agree if you are talking about home owner sales or vacation rentals. The tough spot is for the BRR investors, since the places around are selling at prices a homeowner will pay and not at a price for an investor to make money. A lot of people are relocating down here from up north due to the nicer weather and lower taxes. They can sell a 1200 sqft home up there and buy a 5000 sqft here and still have money left over. To find places cheap enough that you can rehab and then price low enough for the jobs pay around here lies the problem. A lot of these multi family places are also so run down, that a lot of times it would be cheaper to build new. That being said, they are out there, but nowhere near what they were 3-4 years ago.