All Forum Posts by: Rory Fowler

Thanks for the response! That all makes sense. To answer your question, this is an A neighborhood in a high income suburb (avg. household income = $80k/year). The previous owners set the expectation that this is a C class property. I've lived in this neighborhood my whole life and I'm know every street like the back of my hand. They made a mistake in setting that expectation, paid the price with bad tenants and I got it for a steal because I saw the potential they were leaving on the table. The first side I rented to new tenants gave me the confidence I was correct. I rented it before it was posted to someone making well over $50k a year. I did clearly state the $3,000 is combined household gross income. My reservation with 2x of gross is that if I was to do that, that means the person's take home pay would be less than $1,500. The rent would be over 60% of their take home leaving less than $600 for other basics like utilities, food/household and basic car expenses (gas and insurance only). It's almost mathematically impossible to cover your monthly expenses with $1,800 gross and $900 rent. Am I missing something in my logic? I'm of the belief some of this feedback is the frustration of potential tenants who are barely missing my income requirement while trying hard to get a place in this neighborhood. But if that's the truth, those are the exact people I'm trying to avoid so I'm good with it. 2/1 houses rent for $1,200 in this neighborhood. $900 rentals are very rare and attract lots of attention. Maybe the next couple of days will tell the tale.

I have a unit in a duplex posted for rent. The previous owners had some bad experiences with tenants in this duplex but it is in a great neighborhood (I live in this neighborhood. It's positioned in great suburb with a top school system, easy access to major corridors for the metro area. Newly remodeled in March 2017 with great interior upgrades - granite, cabinets, appliances, etc. The previous owners were terrible at screening and got burned out. Their last tenant before I purchased asked to leave because she couldn't afford to stay. So I have posted it today for $900/month with a requirement of $3,000 gross income. I am getting a ton of negative unsolicited feedback about this. I always post with the 3x income requirement, but decided to round it up another $300 on this one to trim down the borderline income qualified applicants. I've filled the other side with a great tenant who easily meets this requirement (didn't have to advertise that side). Am I out of line on this? This duplex should be attracting a high end tenant than what it has historically had. . How do you attract/"screen up" to better tenants?

Would like to keep this thread updated as I also received a letter today congratulating me on my recent sale of a flip. If you have closed a deal with Dominion, please post your feedback. Also, if you know the specs of the deals they want please let us know - price, units, time frames, etc.

While scouring my local market I came across an auction company offering a type of auction called "HUD Second Chance Auction". The particular property I am looking at is not occupied (I personally visited the property). I know it's a foreclosure, but what is the significance of the HUD second chance?

@Chris Soignier in your opinion, how common is it for a lender to act on the due sale clause if you are servicing the mortgage correctly? I have a lender I'm working with right now that is encouraging me to go this route and they do not use that clause - I specifically asked. My CPA and attorney (both with strong real estate investor credentials) are also encouraging that route, saying many of their clients re-title the property after a few months. 

After a year of working our tails off to get in position to invest, we finally purchased our first property. And we feel great about the deal we got. We formed an LLC and found a lender who would take a 30 year traditional mortgage. While the lender was dragging their feet, I set up a $100k unsecured line of credit at my bank. The lender let the closing deadline lapse and we used the line of credit to purchase the property. So now we want to move it to long term financing (15 or 30 year) and I am learning it is hard to get through an LLC. Should I title the property back in to my name to get financing? Does anyone else title the property back in to their LLC after the mortgage is secure? My CPA, attorney AND bank are telling me this is common practice but it seems shady to me. I'm fine with 75% of purchase price because we were planning to put some cash in to the initial purchase. The deal is below. Purchase price $77k Cash $17k Line of Credit used $60k Appraised value $105k Rent (tenant has been there 3 years) $1,100

The family is in need of the proceeds to pay for nursing home care. In fact, they intend of listing the house with an agent in about a week and sell the house with all contents. The grandmother has very little assets other than her house so there was no real estate planning done. I'm aware of the look back period and that is my concern. I don't want to end up putting the family in a penalty situation with Medicaid if I purchase it for less than fair market value. The family does have an elderly law attorney they have been using over the last six months.

My grandmother-in-law is moving to a nursing home very soon and my in-laws are planning on putting her house on the market. I have asked them to give me a few days to see if I can purchase it. In my research, I have learned Medicaid will penalize the family (in the form of withholding Medicaid) if the house is sold to a family member for less than "Fair Market Value".  My comps show a fair market value of $100K. But, as an investor, I want to purchase this house for $70K or less. If it is sold on the open market to a non family member, they family is willing to let it go at that price for a fast sale.

1. Can I purchase the house through my LLC to avoid the familial relationship problem with this transaction?

2. Aside from getting lucky with a very low appraisal, any ideas on how to justify a 30% discount to a government entity like Medicaid?

The frustrating part is I am being held to a higher price standard because of my relationship to the seller.

Thanks for all the info and advice! The cram session before the actual exam is a great idea. Auburn University offers the course through careerwebschool.com and I really like the format so I think I'm going to go with that for the 60 hour prelicensing course.

Hi everyone, 

This is actually my second post on the forums. I am a somewhat new member and I am actively looking for my first rental property. It has become painfully obvious in the last several weeks why so many investors get their real estate license. Several properties I found were under contract before the listing agent or my agent could get me in to see them and trying to schedule a contractor to look at them with me and an agent is almost impossible.

I do travel overnight with my day job and have no plans of leaving in the near future. So at the moment it looks like the online curriculum for the 60 hour prelicense course is my best option. I have many hours in hotel rooms at night and weekends are very free so the time management isn't a problem. But how effective are these courses? Is it common to use online courses and do they do a good job of preparing you for the exam? Are their particular recommended online classes? Several universities in Alabama offer online prelicense courses. Would these be the best option?

Thanks in advance for the responses.