All Forum Posts by: Ryan Webber

Commercial and residential realtors would be the easiest way to find land for sale.

Gross Rent Multiplier or GRM=price/annual Gross Rental Income

GRM, unless otherwise stated, is based on annual income.

$1050 per month income X 12 months = $12,600 annual Gross Rental Income

GRM=$40,000/$12,600=3.2

If $52,000 is the contract price

GRM=$52,000/$12,600=4.1 (sorry not 4.2)

GRM is based on your local market and is determined by comps (comparable sales in the same area).

Again a 4.1 GRM is extremely strong and will most likely be lower than your area's comps. I would be surprised if your area was a 5 GRM, unless of course it is a war zone. But if its not a warzone, then I would hypothesize you can get it to hit on an income appraisal.

Well prk, it depends on your state. In Texas, consideration is NOT required to make a contract valid.

Yup if you were wondering if you have personal issues. lol. Have a little heart. Maybe smile every once in awhile. :D

Most bank owned property will require preapproval letters. Everyone I have bought have required it, but I would guess that some banks might not require it. It's intelligent for any seller to require it. I require it when I sell a property. Every REO I have bought has also required earnest money as Geneic pointed out, and they won't allow you to assign the contract.

Now I personally do not like using an agent to represent me on an REO or any listed property. If I am not represented then the selling agent receives a double commission.

50 units

I only put earnest money down when I am dealing with listed property. Now some states used to require earnest money to make it a valid contract, so you might want to check with an attorney.

Are you sure that it won't appraise, because going off of an income appraisal $1050 in monthly rents for a $52,000 property is a gross rent multiplier of 4.2. Now it depends on your market but a GRM of 4.2 is very low for any market. Even good rental markets will pull atleast a 5 if not a 5.5 for GRM on income appraisal comps. A 5 GRM would be $63,000.

Also, I'm not sure what you mean by it will most likely appraise for less than the ARV. Why? Do you mean in its current condition? An appraisal can be calculated "as if" repairs/updates were completed, and if you have contractors estimates for the repairs then they can factor that directly into the appraisal.

In my opinion wholesaling is the most viable, lowest risk, highest return method for someone to get started. Wholesaling includes finding deals, putting them under contract, and assigning the contract or double closing to another investor.

I know my city is still extremely strong for rentals. I live in Amarillo, Texas. I think the key to finding cash flowing areas is to find the areas that are strong but have not had the extreme appreciations over the last decade. My market averages 5% per year appreciation, and I can easily find rentals that will cash flow for 30% cash on cash return.

As long as the property will appraise for it, you can put a contract on it for $52,000 with a seller concession of $12,000 for repairs. Now not all lenders will accept this, but you can find one that will. You may have to document the repairs that will be done and get estimates from contractors. Now depending on you lender, sometimes you can just get a check at closing or sometimes they will set up an escrow account, and contractors will request the funds via invoice.

Again you may have to search around for a lender that will do it since it is unconventional, but they're out there.