All Forum Posts by: Rene Owczarski

You can continue buying properties with that FHA loan in place on the 3-plex. But if you're going the conventional bank financing route, the other purchases will be underwritten as investment properties, which will mean you'll need to bring more cash to close, since the allowable LTV will be lower on the investment properties than on an owner occupied property.

If I'm going inside someone's home, and meeting with them face to face to make a deal. I always have a paper purchase agreement with me for the meeting, even if I don't think the deal will work out. You never know with sellers.
Because the last thing you want, is to have to tell them, "Oh, let me come back tomorrow with a purchase agreement" because you weren't prepared to do a deal right then. And then all of a sudden the seller has get cold feet when you come back tomorrow. I learned this the hard way.

This is also why you have inspection clauses in your purchase agreement, because if you need to walk away, you’ve got the out clauses to get you out. So after you get it locked up, then you can bring out your contractors to take a look, and if they find something, you can walk away. Also most contractor won’t walk a property, until you have it under contract. They are already busy enough trying to find there next project, and a property not under contract, is not a future job for them, it’s just a waste of their time, especially in a hot market.

Hope that helps.

When you say "loan originator", are you talking about the mortgage underwriter, or the sales person is telling you no?

Depends on the paperwork you signed with the bank. Because with owner occupied loans, the credit overlays are more generous, in giving you a better rate and higher LTV's. But the tradeoff is that you are telling the bank that you plan on living in the property, instead of buying it as an investment property (which would be higher risk for the bank, so in turn, lower LTV and higher rate).

Sometimes the bank has you sign a separate sheet, with an occupancy declaration, affirming that the property will be your primary residence for a certain amount of time. And sometimes its actually listed in the Deed of Trust/Mortgage that you sign at closing, which was then recorded.

Bottom line it'll be in your paperwork you signed at closing.

Don't take the current landlords word, that the tenant is payment on time. Trust but verify.
And the only time that i've gotten estoppels, is when the landlord can't find the lease, or the tenant is month-to-month.
Most of the time, the estoppel is bare bones: Tenant name, is it month-to-month?, rent amount, deposit amount, and do they have an option to purchase the property. So you'll want to look at what's on the estoppel.

Also you can ask the current landlord for 12 months of canceled checks, to prove the tenant is paying. And if they balk, that's a red flag that they might not be paying, and are trying to dump their problem on you.

And if I remember right from one of the pass BP podcasts, they talked about doing a 12 month escrow holdback on the rent from the seller's sale price, if they don't want to prove that the tenant is paying. And if the tenant pays each month, then the seller get a month's worth of rent from the escrow account.

 
Driving for dollars and out of town owners have been winners for me. And off market vs. on market for BRRR. It really depends on the numbers on the deal. Because when I first got into real estate investing, all I bought were foreclosures off the MLS, but they were so cheap, that the numbers worked out.

You're welcome Darius. And my lien was for about $5,000-6,000, since interest was also accruing during collections.
And I ended up getting about $4,000 out of it in the end.

At this point, instead of selling it, you should think about reaching out to a debt collection law firm in the area, for them to collect on it. Because it was a pretty seemless process, when I've used a debt collection law firm to collect back rent/damages from an eviction.

You typically pay the firm a retainer amount upfront, to load it into there system and start calling on the debtor to pay up. And you typically have to give the firm a third of the gross amount they collect, but the upfront retainer usually gets credited toward the third to the firm.

But when the firm got the debtor on a payment plan, I would get my check about every month from the law firm. And the firm would deduct out their third cut, and I would get the net amount on the check.

The payment plan took a couple of years to run its course, but the debtor eventually paid in full.

My wife and I run an urban farm just a mile or two from downtown Des Moines. We live in the 50314 zip code, and all the land we farm is in the 50314 zip code. So my real estate background, helped to secure us the land we farm on for this farm.

I would give Community Develpment a call at the City of Des Moines. Since Des Moines just did a conprehensive rewrite of their zoning code under the name planDSM in the last couple of years. So a lot of the rules have changed for zoning type, house design, minimun square feet, lot size, etc.