All Forum Posts by: Rob Else

Welcome.  This site is a great learning tool and everyone is very willing to help out.

I was out driving for dollars today over my lunch hour.  I was in a neighborhood with home prices in the $100k to $125k range.  I found one house that was obviously vacant.  It had an overgrown yard and notices posted to the front door.

I went back and looked the property up online.  The owner listed is not at the same address as the property, but is an individual.  However, when I looked up the property tax information online it says "This property is subject to tax liens, bankruptcy, foreclosure, or special handling".  It looks like the taxes were paid in 2014 but not 2015 and nothing for 2016.  All taxes prior to 2014 show $0 amount due and $0 paid.

What would you guys do with this property?  Is it worth sending a letter to the owner?

@Scott Garner You might try talking to Grant Pille at Pinnacle Bank in Gretna. I ran some deals by him and he was willing to loan to an LLC on a SFR. He was requiring 25% down for 25 years. The rate would be locked for 5 years. The LLC had to be setup before the loan could be approved.

@Jennifer A Finn Sutton I saw your post and realize it's 9 months old, but I thought I would mention Julie Collins with Professional Title Company in Omaha.  I was recommended to her by my attorney and she did a title search on some property.  

@Scott Garner for an attorney I would recommend Russell Kreikemeier.  He has an office in Omaha and in West Point so when you do the Google search make sure and find his W. Dodge office.

I've used him for a couple of deals and he's also doing all my estate planning now.  He is really good with real estate and understands taxes as well.

@Gayathri Acharya Kallakuri I saw this post was a few months old, but I just ran across it while doing another search.  If you are looking for an attorney in Omaha I would recommend Russell Kreikemeier.  He has offices in Omaha and West Point so if you Google look for his office on W. Dodge Road.

@Account Closed I know this is post is a few months old, but I was searching for something else and ran across it.  If you are still looking for an attorney I would highly recommend Russell Kreikemeier.  He's very knowledgeable about real estate and also does tax prep.  I actually was referred to him by someone else on this site.

@Hugo Aguillon thank you for the reply.  Just curious why you would try to get a lender instead of using the seller financing?  

I am new to this and trying to learn  a little bit.  One thing I liked about the seller financing was offering a lower, 10%, down payment instead of a 20% down payment at a bank.  Plus with the loan under $50k I wasn't sure if that would turn banks off or not.

All,

I am new to real estate investing and I'm still looking for the right deal to be my first deal.  I keep looking and talking to sellers to try and get experience as well as the first deal.  I wanted to get everyone's thoughts on this property.

It's a SFH with 1300 square feet. 3 bed/1bath. It currently rents for $875 per month and the tenants just signed a new 1 year lease.

Annual income = $10,500

Less Vacancy = ($1,050)

Less Capital Ex of 10% = ($945)

Less Property Taxes ($1300)

Less Property Management ($945) - I will self manage to start out

Less Other expenses (Ins., admin, etc) - ($2,000)

NOI = $4,260 per year

The list price is $53,500 for the property.  Other comps in the area seem be listed at $70,000.  I have not seen the property yet to know what kind of repairs are needed.  The property sold for $72,000 in 2007 to the current owner who is looking to get rid of it.

The seller is motivated, although he hasn't said why - just personal reasons, and said he is open to seller financing.  What would you think of this offer to the seller?

10% down payment of $5,300

Finance the remaining $48,150 at 5% for 30 years = a monthly payment of $258.

My cash flow would come out to $100 per month, but my cash return would be 21%.

I won't be living in one side of it.

After walking through it on Friday with a realtor I decided against doing the deal.  It needed a lot of work.  The tenants had been there for a long time, which was a good thing, but there was basically no maintenance done during that time.

Some other red flags that I didn't feel comfortable with as my first time deal were:

• Rent paid in cash each month.  The current owner stops by on the first and collects the cash each month
• It was 2 units with 5 total bedrooms, but there were probably 15 people that were living there.  At least 3 closets had beds in them and had been made into rooms for people to sleep
• Owner paid the utilities and there was 1 furnace and 1 AC unit for the entire building.  
• The location was not ideal and not in an area I was comfortable investing in.

The good thing was I looked at the property and gained some experience there.  I met a new realtor that I didn't know before.  I also walked through the financials with the bank so I have a better understanding of their position on properties.  I'll chalk this one up to a learning experience.