All Forum Posts by: Robert Clifford

Randy,

to do a wrap around, does the mortgage have to be assignable? If not, does an attorney work through the legalese of that?

Bigger Pockets heroes,

I have a property in the Atlanta metro area that I'm trying to sell and I've now had a couple of offers above ask with owner financing. This is something that I want to do, the numbers make sense, but I need some help on figuring out the best course of action. The mortgage on the house is currently held by a company that does not assign mortgages and I still owe ~$90,000 on the mortgage.  What are the best ways to go about closing one of these offers? 

Can a wrap-around owner financed mortgage work when the mortgage isn't assignable? Should I refinance with an assignable mortgage then immediately turn around and sell the house with owner financing? 

Anyone have some ideas of lenders that have assignable mortgages in the Atlanta area?

Thanks!

Rob

Hey BP! I'm looking for a real estate agent in Atlanta who invests in real estate themselves. If you know someone or are one yourself, please reach out to me. I already invest there and want to expand my leads. thanks,

Mathias,

please send me information.

Loreal,

can you send me some pictures and other property information if this is available?

Thanks,

Robert

Patrick,

great questions. I invested in my first property while living overseas so I know where you are coming from. I have three points that I would share.

1) Make sure that you research the areas that you are going to invest in thoroughly. If you have never been there, you should learn the city/maps/economics of the area/look at hundreds of listings to understand what the market is like. Learn what each of your monthly expenses will be on average and learn what something will rent for in each neighborhood your interested in. Don't let anyone do your number crunching for you. Have a mentor double check your work and ask experience property managers what they think they would be able to rent something at. 

2) Build a team on the ground. Look around for who will work best for your needs. Take references from people but be sure that you have a number of different people who don't work with/for each other. In other words, your realtor, property manager, home inspector should not have a habitual relationship or be the same person. You need to have multiple different independent accounts of what a property looks like, inside and out, and what the properties potential is as a rental that will meet your investing needs. 

3) Try to get something as turn key as possible. I would never trust a property manager/contractor to supervise a rehab project while I was not around to check in on them every now again. That's a recipe to get taken advantage of. Ultimately, you may need to have some serious work done, but you can shop around for someone who is rated well on angieslist or other resources. Get multiple quotes and have them tell you what their analysis of the real problem is so that you're not replacing an A/C unit when you just need a part changed out.

Lastly I would say, my biggest problem was analysis paralysis. When you see a property where the numbers are solid, have a bias for action and if you find something that meets your criteria, jump in. Its the best way to learn.  

Good luck.

Robert

Yes, do a 30 year mortgage if you want to achieve the best cash flow and lower expenses.

Matt,

buy low and sell high is something that we have all heard and that you clearly know too. As a beginning investor, I definitely recommend avoiding a market that has potentially reached a peak. In either case, do your research and know what you are getting into when investing in a specific market. While there are always good deals in any market (some markets may take a lot of time to find them, like SD), starting out far away from where you live is perfectly feasible. That's how I got started out; buying while I was overseas.

Eric,

my top recommendation that I would stress to you is never compromise on the 1% rule. In extremis, if you compromise on the 1% rule, ensure that you are 100% able to cover costs over a long term period (12 months or more in case the markets bottoms out) and secondly be honest with yourself about the numbers. You can manipulate numbers all you want until they tell you what you want to see but that may not reflect reality. For example, if you decide to take away monthly allotments for capital costs, in order to see the property cash flow, you are lying to yourself about the numbers.

Andrew,

having ambitious plans, even as a new investor is totally okay! Reach for the heights. The piece of advice that I would submit to you is to never, ever, purchase an investment property that does not cash flow. Your lender, unless they are private, will likely quickly begin denying you loans and you can quickly find yourself in over your head.

Also, if you have that much cash to play with, and you intend to rent when you get out there, house hacking might be a great strategy for you. Basically, buy a multi-family residence, ideally with an FHA loan (3.5% down), and you live in one unit of the residence. Then you will still have a lot of capital to do other things with as well.

Just a thought.

Rob