All Forum Posts by: Mogi P.

I also would love more insight on homepath. I do know that most fannie mae REOs qualify for homepath. Some don't, and it might be because they require too much rehab like you said.

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Originally posted by Johnson H.:

FannieMae likes to see HomePath being used for their properties, it is a positive to have that in your offer. Properties right out on the market you can negotiate a bit, with properties more than 90 days on the market you can negotiate a whole lot. Just start low, the worse that can happen is that they counter at list or reject your offer. If they counter at list, just increase your offer a little bit, sometimes they are just faking it and will negotiate with you, they are just testing you. Also, when they say there are multiple offers on a property on the market for a long time, sometimes they are faking that too. For FannieMae properties, they can pay up to 2% closing costs so you can play games with that. Instead of offering $100k, you can go up to $102k with 2% closing costs.

For example, one property was listed at $150k with 90 days on the market. I offered $100k last week. We went back and forth and I got them down to $139 with 3% closing costs, which he shouldn't have offered the 3% as he can't. It was their best and lowest and I walked away. Today, the property is listed at $139k. Maybe next week I'll put another offer on it.

Those numbers seem pretty high for a rental property. How much is rent? How well are they cash flowing?

Btw, thanks for the negotiating tips!

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Originally posted by Realtyman:

Why bother setting up something that is really unnecessary. Invest in real estate - roll over the proceeds from one property into another using a 1031 exchange.Anytime you have someone elses hand in the pot - the money has a way of moving from your pocket into someone else's pocket. Usually the other person has "BiggerPockets"!

What about the benefit of a SD Roth IRA where your gains are tax free for qualified distributions?

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Why not just offer your highest and best if you feel like you are losing out on deals because of your low offers? Your profits should be built into that number. I don't think anyone can really tell you how to get the magic number, doubt even the seller knows sometimes.

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I'm a newbie, but I think many here will agree with me. You need to deduct all your costs/profit/margin from the ARV on a flip. This should give you your highest and best offer. Do not buy the property above this number. If the bank doesn't accept, walk away.

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Originally posted by Ryan ODonnell:

Mogi,
You can get the best of both world's using someone else's cash and then qualify for refi's through a bank (or part yours/part theirs). I started out by buying properties with my brother-in-law's money and then refinancing into longer term bank and private money loans. The only thing you're up against there is qualifying (should be no problem with a 9-5 and no debt GOOD FOR YOU!) and making sure you keep your loan-to-value under 60% (that's just my number, and I keep it lower if I can). You sound like a smart dude so just be patient and make sure you're doing something you understand. I've gotten anxious about deals and it always clouded my judgement about some aspect and I ended up mis-stepping on some part of the deal. That is the best way to learn though, cuz you never want to do it again!

RyanOD

I will make it a point to contact some banks this next two weeks to get their refi info. I have read on this forum that there are more positive responses from local banks vs big banks. Has that been your experience as well?

Time to give some relatives a quick hello...

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Originally posted by Johnson H.:

I am in the same position as you. Just turned 26 this month and I am on my third rental property. Take a look at FannieMae foreclosures and utilize HomePath loans with 10% down for investment properties that are SFH. Don't ever stop asking questions. Don't always take everyone's word. People don't always paint the whole picture for you. Whatever you think your expenses are to bring something into rental shape, add 50% to be safe.

Find areas in great school districts and they will rent all the time. Get multiple bids on everything, call multiple PM, call multiple mortgage brokers, call multiple insurance agents, you will be surprised how everything is negotiable.

A buyer's agent will work with you if you are serious and they know you are looking for multiple properties. My agent bends over backwards for me as he is also my PM and knows I am looking to buy more.

Last thing, take it one property at it time and don't make it emotional! Look at the numbers, look at the area, if your gut feeling is bad, walk away, there are plenty of properties to choose from at great prices. Good luck!

Thanks for the encouragement and happy belated! I have been looking at the homepath site in my area and there are some great deals if bought below their listing price. How successful have you been with using homepath financing at acquiring their listed properties? Are they amenable to negotiating the final price with the financing contingency?

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Originally posted by MikeOH:

Magi,

I bought almost all of mine with bank financing, subject-to, with owner financing, and on lease option. However, if I was very young; had some cash and very low expenses, I would work hard and pay CASH. You would be amazed at how fast your portfolio would grow and everything would be paid for!

I don't want to start a cash vs leverage debate. I merely want to pick your brain. Seeing as how you obtained most of your properties by some type of leveraging, yet you still preach buying in cash, what was it in your experience to have this perspective? If you bought with cash, do you think you would have the same cash flow and portfolio you have to date?

btw, it's Mogi with an "O"

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Originally posted by MikeOH:

With your specific situation, I'd be very tempted to pay CASH for the properties. You'd be amazed at how fast you could build up a significant rental business, assuming that you buy right!

Mike, I've read quite a few of your blog posts, and I'm fascinated by your stories. They really bring to light some of the realities of landlording. When you started your rental business, how much capital did you have to work with and did/do you mostly buy cash?

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Originally posted by Jeff Sielicky:

You ask why an agent would bother with a cheap property. The answer is, if it is his listing, he will love to sell his own listing because when you are an agent and you do this everything works so much better, plus he makes double. Also, some agents prefer cheap properties. It is just a different business. Good luck.

I believe you are referring to the listing agent in the first part of this paragraph. I was referring to working with a buyer's agent, but I understand what you are saying. I just need to keep looking for the right agent. Thanks for the advice.

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All Forum Posts by: Mogi P.

Mogi P. has started 5 posts and replied 31 times.

Post: homepath houses for the 10% loan how does it work?

Post: Saver with an Investing Problem

Post: Who is your self-directed IRA custodian of choice & why?

Post: Making a Forcosure Offer

Post: Making a Forcosure Offer

Post: Saver with an Investing Problem

Post: Saver with an Investing Problem

Post: Saver with an Investing Problem

Post: Saver with an Investing Problem

Post: Saver with an Investing Problem