All Forum Posts by: Sharon Tzib

Hector, what are the comps? Can't really answer your question until we know that. Thanks!

Wow, Brian, congrats! $45K/door for a Class C. Is that the range you're seeing in Houston now for this asset class?

Can I ask some ?'s re your expenses:

1. I imagine if this wasn't a Reg 506D your entity formation and legal fees would have been less?

2. Why did you have to pay legal fees for the lender?

3. Was the lender's impound account for interest? It seems too low for taxes in TX.

4. How much would you set aside for reserves, and what portion of that would come from security deposits?

5. How long from start to finish did this deal take you?

Thanks for taking the time to share.

It's a pass for me too, Shari! No way I'd take on that tax liability, and you don't have separately metered units on top of it. Add that to the not so great neighborhood that could further decline, and it just doesn't look appealing at all.

Also, @Joseph Weisenbloom 's numbers only accounted for the special assessment tax, not the regular tax, so regardless of the loan term, you are cash flow negative. And what happens if one unit goes vacant and you don't find a tenant right away?

Banking on appreciation in a C area is more risky than taking on debt and looking somewhere else. If you do buy this, make sure you have ample reserves - you're gonna need them.

Just my observations. Good luck whatever you decide.

Hi Charles! Good for you for starting to research real estate investing so early. Lots of good info here on BP. Be seeing you in Houston soon! Good luck!

I've heard previously in this forum that Stewart Title is investor friendly.

http://www.stewart.com/houston

Hi Angela (I kind of want to call you Georgia Peach lol!). Welcome to BP.

It would be hard to start flipping without any money. Even if you found a hard money/private lender, being it is your first deal, they're gonna want you to have some "skin in the game." You could possibly try to find a partner. Or, you could start out by wholesaling, which can be done with little money (I did not say none, as you'll still have some expenses, like gas, basic marketing, small amount of earnest money deposit, etc.). You should research both thoroughly on this forum before proceeding. Sharon Vornholt & Danny Johnson are two of the top wholesalers here. J Scott just wrote a great book on flipping too.

On the note deal, I'm somewhat confused. The house was bought for $192K in 2011 - what is the amount of the note? If the mortgage holder (which I assume is a private individual, not an institutional lender) only wants you to pay off the face value of the note, why would you want to pay the appraised value of $250K?

Instead, you should be buying the note for a discount, since the mortgage holder is in a bind and needs out. Now you have equity with the difference between the two (appraised value and note purchase price). But you say you don't have any start up funds, so not sure how you plan on accomplishing this. But if you find the money, then yes, you can seller finance the note to the tenant collaterized w/ the home. Being that her credit isn't great though, make sure you charge a premium interest rate and she needs to put something down too. Again, you should research this thoroughly before proceeding. There are mortgage servicing companies that she can make her payment to that can help you with some of the formalities.

Please let me know if I've misunderstood any of the details. At a minimum, knowing the pay off amount on the note would be helpful so others can chime in and continue giving you ideas/advice. Hope this helps some.

Welcome, Robbie! I'll be moving to Houston end of the year. Lots of multi families in Houston to do as Ned suggests. Good luck!

"I've had a meetups in a bar, a pizza place, a shared workspace, and a BP member's rehab project."

What a great idea to have a meetup at a rehab project! I mean, even if you're not a flipper, you could probably still learn a ton of information you could use in the future.

Hey Taylor. You should be able to verify the vacancy rates w/ the due diligence documentation the landlord gives you (rent roll, bank statements, tax returns, etc). If they don't seem unusually high, then you may want to leave things the way they are (i.e. the way the tenants are used to) after purchase and take six months initially to decide if these are, in fact, tenants you want to keep. If not, then you'll have flexibility with being able to get them out w/ 30 days notice.

Also, you should be aware what the "customs" in the area are. If almost all other landlords do this, it may be hard for you to be the exception (and, you could draw some assumptions as to why they are doing it that way). On the other hand, if you are ok with the current rents and don't mind locking them in for a year, then the tenants may not mind signing a lease if they were planning on staying anyway, and now know their rent won't be raised at least for one year. If nothing else, you may find out who's planning on staying and going.

As with many things in REI, there's not always one clear cut answer. You will have to look at what is normally done in that area, what each buildings specific situation is, and what your comfortable with, and make a decision from there.

Hi Tanisha! I'll be moving to Houston end of the year, where I'll be investing in the multi family segment. Good luck to you!