All Forum Posts by: Richard Davis III

I bought my duplex on FHA, my brother bought his triplex on FHA. We couldn't qualify for the conventional options because our credit wasn't good enough at the time. Even with an FHA you should be able to get PMI knocked off IIRC. FHA's biggest weakness is having to follow HUD restrictions (no chipped paint, all handrails to code, etc). Another thing about FHA is you can only have 1, so when I go to buy my next building ill either have to refi this (not happening I'm below 3.5%) or buy conventional.

The best advice would likely be to go out and make connections with lenders in your area. BP has a vendor search function on the top bar that you can look up traditional lenders for your zip code. If you're in WI I can recommend a few people too. 

Cheers and welcome to BP!!!

Im not sure on the best route of action for your LLC/Bank account, but I just created my account a few minutes ago too! So welcome haha. Good luck and hopefully you can make the best of BP. :) Congrats on your closing.

The best way is to find out what the seller wants and then pivot to them while still keeping the points you need to keep. This boils down to qualifying. YOU need to ask questions before you get to the appointment, at the appointment and after the appointment. By properly qualifying you can get to the seller's motivations and then craft the best offer for them.

Don't be afraid to negotiate.

Once you know their motivations, the rest should be fairly simple. If they are stuck on price, then give them price, but win on terms. The best way I've heard this principle stated was "all of you would be wiling to buy a 100,000 property for 1,000,000 if I let you pay me $1, day until you hit the 1,000,000." 

I know a lot of my friends (and me I guess but not exclusively) are trying the 0% down 0% interest approach where you focus on the "sale price" as the selling point to the seller. I've successfully negotiated 2 of these, but on both I did concede a down payment. In this scenario its really the 0% interest that makes the deal good ("0% interest" is illegal in some areas, but if you word a balloon payment as an interest balloon payment it may be okay- check with your lawyer I know ours approved that for our area).

If the seller asks for a down payment and you don't have one, my advice would be to bring in a partner and give them fair equity/return (or better than fair if possible).

Eddie Speed & Chris McClatchey both teach negotiating seller financing and winning on terms (while losing on price usually).

Hope that helps.

Investment Info:

Single-family residence fix & flip investment in Milwaukee.

Purchase price: $49,000
Cash invested: $29,000
Sale price: $108,000

Managed by an LLC I work with. I was the principle cash investor and worked in the property hourly as needed.

What made you interested in investing in this type of deal?

The numbers were good. I trust the project manager.

How did you find this deal and how did you negotiate it?

The project manager took care of that aspect.

How did you finance this deal?

Using my IRA LLC.

How did you add value to the deal?

I was a cash investor, and also helped with a significant amount of the work in the property.

Lessons learned? Challenges?

For some reason we had FOUR accepted offers fall through on the disposition side of things. This was a major challenge and we learned a lot about how to talk to and challenge traditional bank lenders about their pre-approval process and what questions to ask to help weed out toilet paper pre-approval letters.