All Forum Posts by: Petr Anisimov

@Todd Dexheimer thank you for your input as @Marc C. said I should stick to my mission of buy and hold. As @Thomas S. said it is pass for me. Maybe in the future I can hack the deals but should follow a dead simple logic right now: take the deal that you can put a value to it now not in a future!

Walk away if it does not make sense now.

Foreword: My local market is Santa Fe, New Mexico and the center of the city near plaza is very congested to provide space for new constructions. The value of houses and rentals is through the roof because of that. I have recently came across a neighborhood that has potential for gentrification due to its proximity to the plaza and hipster businesses. I make this statement as there are new renovations going on there right now with whole houses being torn down and rebuilt.

Deal or no Deal: Very few houses are being sold or rented in this neighborhood. When house for sale came on the market in that area, my realtor called me. An advantage of this house that it has a large plot of land that could be split in two. The disadvantage is that it an utility pole on its side with electrical wires crossing the plot. I was told that utility company might have rights to do that but I do not know how to check it or make them to move the wires.

I am being sold on this deal because of appreciation and an opportunity to sell an empty half of the plot in the future. I do not know how to put a dollar value to this land. They also tell me that I can build another house there.

I am not being sold because I look for positive cash flow. The main house (400k) has two units - main+guest. The extra land has an artist studio built on it for extra income 2700 total price that might be pushed to 3000. Combined rent covers the mortgage, aka FHA, but does not provide extra income to pay for maintenance and capex, which I can afford to pay if need be.

Conclusion: I feel like passing on the deal but decided to check with more experienced people here. 

Can seller financing in some form make this deal pass your muster?

I have no background in construction and look for passive income so if I could sell that land to lower the price of the house then it might meet my criteria. 

Hi Jeff, welcome to the site! 

Just came from the white sands and your wonderful city. My problem is always to find a good place to stay for the visit. Are there any short-term rentals?  How is the real estate climate there? What kind of support community can you rely on? 

@Wayne Brooks thank you for your response. 

My agent has verified that it is not a wrap. I am involved in one right now so it will be an easier thing for me to follow. 

It feels that this type of financing has more risks to the seller that to me. He must be more interested in getting his attorney involved. I can always walk away if I do not like what an actual note and mortgage says. Am I wrong?

I am guessing that the following sums it up well:

http://www.kreisenderle.com/news/real-estate-selle...

Since it seems that my realtor is not familiar with this side of business, what steps should I or my realtor take in order to secure this deal?

It sounds like attorneys might get involved on seller's side but should be easy for a buyer.

What is the difference between seller financed mortgage and real estate contract?

This is a question I got from my realtor here in Santa Fe, New Mexico who is preparing a purchase agreement in order to submit an offer to the seller. I am going to do my research but want to here from BP community since I do not know what to tell her and the time is of the essence.

I have recently found a property that seller agreed to carry a note for on the following conditions. It is a 340k property with 50k down, 5% interest only loan for 5 years with balloon payment at the end. It should have a decent cash flow and let me test my land lording skills.

I know that real estate contracts are how properties are sold here in New Mexico with seller financing if they have prior mortgage on the property. The buyer pretty much assumes the previous mortgage payments.

In my case, the seller own the property so it sounds more like a seller finance mortgage. How do we structure the paperwork in this case?

Thank you for any information and pointers where to look for this

@Tyson Hosey, you might even share the story at New Mexico Mastermind meetup hosted by @Marc C. as well if he thinks that it will fit the scope of the meetup.

Hello @Donald Lanzer,

Welcome to BP. I agree with you on buy and hold idea and that is my ultimate goal. Yet I would like to follow BRRR strategy. Thus I am looking into flipping experience so that I could get better deals on my buy and hold properties as I will know how to rehub them to my liking.

I also look to learn from others experience. @Tyson Hosey would you like to meet? I will be great full to hear about how to do a first deal!

@Marc C. Hi Marc, I have not even thought about contacting hard money lenders to offer them to lend my money out. I was told that the going rate for Albuquerque is from 8 till 15%. Would they be interested in shelling out 12% to me? Do you have any names in mind that I can start talking to?

Thank you! and yes it sounds "thin" the more I think about it the less I want to get into it. 

@Matthew Cole that is my concern exactly. Why does she need me on this deal? I will ask for her references however.

Thank you all for your valuable inputs and please see my responses below. Overall, you have convinced me that there is not enough money in the deal to jump in. Yet, I should learn how to come up with my own numbers in order to be ready to analyze a next one with due diligence. I am sure that it is somewhere out there!

@Robert Smith thank you for looking into my numbers and I totally agree that I should verify them myself. Where would I get an independent numbers from?

You are right that I do not want to sit on this deal too long yet it appears that it can get back on the market after holidays when the market is slow. I think that 8 months vs 6 months is a more realistic time frame.

@Brent Coombs the 18% was a number I came up in my analysis based on 260k sale price. Actually, my initial excitement was about 310k sale prices but I do not believe that this neighborhood can support that. How can I verify ARV on this house by myself? And no I do not want to tied up my money with them.

@Wayne Brooks yes I agree with you on the comps. They seem too thin for me but I have never seen CMAs before. I do not want to invest majority of the funds I have on my first deal. I want to invest enough to be in the loop. I also do not want to wait to save enough money to be in the first position on a deal in my area. I think that I have to study other markets where my 50k can go a long way.

@Charlie Claxton thank you for your vote! It is my first and I hope that not last. What have you liked about my post? I think that I will follow your advice and pass on this deal.