All Forum Posts by: Ryan Cramer

@Michael J. I really appreciate the thoughtful response!  

Owner financing was the first idea that had come to my mind when we started thinking about purchasing the home.  If we could somehow acquire it for $450,000 knowing it can sell for closer to $700,000 I would be very confident that we made a good decision and could sell the house later on for a good profit that we can put into future properties.  The only caveat is my one cousin recently mentioned wanting to sell the house to put his boys through college (they are about to start senior year of high school this fall) so I think he wants the pay day of selling the house.

The lease option is a good idea.  I'd have to see if they'd be willing to defer the pay day and let us lease it for a good bit until we have the capital saved up for our price.

I had definitely not thought of the joint venture - I know one of the cousins' said he'd be willing to sell to us at a big discount and would love to be able to still come to the house.  He could potentially be interested in this and retain some equity in the home and essentially help us acquire it from his brother.

How would you see us being able to use this property to springboard future investments?  We had originally been saving to buy a multi-family house hack before my wife found her new job.  My only concern is if we do buy this house as our primary residence, it would delay us being able to start investing in real estate.  I want to make sure if we do purchase from my cousins it is to our advantage financially and puts us in a position to start investing in other properties.

Thank you again for the great feedback!

@Randall Alan I appreciate the quick feedback!  I guess I am still trying to figure out the questions myself.  Our original goals were always to get our feet in the door with real estate investing by making our first property we buy a multi-family house hack.  But now that wouldn't be the case if we do buy my cousin's house.  So I want to make sure, if we do buy this house, we're not backing ourselves into a mortgage we can't afford and prolonging our real estate investment career.

I don't think we'd re-sell the house once we purchase, not immediately anyway.  I can see it being relatively long term - therefore I'm not looking at it as our first investment property.  It may appreciate in value in the time we do own but I don't want to rely on that.

I think my cousins would be willing to sell it below market value - at least one of them.  I spoke to one and he said he would be willing to sell it to us at a discount and would love to still be able to use the house.  I haven't spoken to the other yet - I know he is emotionally attached to the house, but also wants the pay day to help put his two boys through college.  They are going into their senior year of high school, so I think he'll want to sell the house by next Spring.  

I have thought about the owner financing - I had thought that would be our avenue until my one cousin told me he was banking on selling the house to put the boys through college.  So I imagine that he wants a larger payday then a monthly check.  

We do have money saved up for a down payment, but not enough for traditional 20% mortgage at the market value of this house.  Originally, our goals had been to put this money into a house hack, so if we do pursue buying my cousins' house, and put all our savings into it, we wouldn't have anything left to invest in real estate.

I hope this helps answer your questions. Still trying to figure it all out ourselves - we thought we had our plans figured out until my wife got her job in Reston, VA and Baltimore was out of the question. I like the area we're in and wouldn't mind buying this house as I grew up coming here all the time and we love it, but I don't want to put all our eggs in this basket and be screwed financially in the long run.

My wife and I recently relocated from New York City to Olney, MD.  My aunt passed last year, and my two cousins inherited her 5 bedroom 2.5 bath house.  They were kind enough to allow my wife and I to move in to the house rent free for the time being while we get on our feet here.  Our original plan was to stay here for about a year, then buy our own house hack in Baltimore.  However, my wife's new job is in Reston, and the commute from Baltimore to Reston would be horrendous - so we are considering staying in Olney.  And we are considering purchasing this house directly from my two cousins.

The caveat is we could not afford this house at its market value with a traditional mortgage.  It appraised for $665,000 and I think realistically the most we can afford is $450,000.  But we really love being in the house and this area.  I think my cousins would like us to stay in the house so they can also continue to visit and use it, but also want to make the money off of the purchase.  So I am looking for advice from the BP forums as to how we could creatively finance / leverage this deal in a way to make it financially work for my wife and I and get our feet in the door to start buying investment properties.  From what I've read online, purchasing real estate below market value from family can be complicated in terms of taxes, lenders, etc.  I only want to pursue it if it wouldn't hurt us financially and would allow us to put our saved capital toward a rental property.  Does anyone have any advice for how we can go about this?  Is it a bad idea for us to try to buy this house?

@Natasha Hardy thank you for the reply!  It is definitely something we've considered.  I have actually suggested the same to my fiance, however she has expressed she doesn't want to burden her parents with the mortgage.  Her cousin who is our age as well currently has his own mother's mortgage in his name, and she feels bad asking.  However, her younger brother who currently lives in Vancouver is likely to move back to Ireland in the next year or so, and we are considering having him take out the mortgage when he is back and going in on the property together.  So it's definitely in the cards!  

@Alexander Szikla I very much appreciate your quick response!  The house is hopefully a bit of both a rental/second home.  We would ideally stay in it for probably a week each year when we go to visit her family - or may for a few weeks at a time down the road when we have kids.  But for the remainder of the year we'd rent it out as a vacation home / Air B&B.  The area is a surfing village, and they get a lot of travelers from central Europe and even the states who rent Air B&B homes in the area.  The occupancy rate is about 50%, mostly busy in the summer months.  We'd like it to generate passive income for us for many years to come.

That is great advice; I hadn't thought to reach out to local real estate brokers to get an idea of comps or what the property might be appraised at once completed.  Will definitely do so!  One big hurdle is financing; she has talked to Irish banks, who won't give her a mortgage because she a US resident.  US banks won't entertain giving her a mortgage because it is an overseas property.  Do you have any ideas on how to creatively approach getting financing for a project like this?  Again, any thoughts or advice you may have would be very much appreciated!  Thank you Alexander!

I am an architect in New York and pretty much a beginner in Real Estate investing and development. My fiance, who is from Ireland, bought a derelict home on an ocean front property in her hometown of Sligo, Ireland. It is a coveted property, as they no longer allow building on that side of the road anymore, but we can demolish the existing house and build new so long as it stays the same size as the current building on the property.

My question is really how do I even get started in analyzing the property - is there a specific tool to assess overseas rental / vacation properties? She has about 40,000 Euro of the 90,000 Euro cost of the land/current property already paid off. Based on research, we anticipate it will cost about 300,000 to 350,000 Euro to demolish the existing house and build a new one in its place.  I am doing all of the drawings and design for the home and have had some communication with the Planning Department there. We have a rough idea of how much it will cost to build, and what income we can get from it (as her family has another holiday home they rent out just down the road that is similar size). How can I assess this to know if it is a good deal, or what tweaks we may need to make to the design or construction budget to ensure that it is?

Really just looking for any advice in general as to how to best approach this project from an investment / developer perspective. It is really my first project and want to ensure that we approach it and do it the right way. Recommendations on how to analyze the project, approaches to getting financing to build (this one seems to be a challenge), etc would all be much appreciated!

I am an architect in New York and pretty much a beginner in Real Estate investing and development.  My fiance, who is from Ireland, bought a derelict home on an ocean front property in her hometown of Sligo, Ireland.  It is a coveted property, as they no longer allow building on that side of the road anymore, but we can demolish the existing house and build new so long as it stays the same size as the current building on the property.

My question is really how do I even get started in analyzing the property - is there a specific pro forma to assess overseas rental / vacation properties?  She is about 40,000 Euro of the 90,000 Euro cost of the land/current property already paid off.  I am doing all of the drawings and design for the home and have had some communication with the Planning Department there.  We have a rough idea of how much it will cost to build, and what income we can get from it (as her family has another holiday home they rent out just down the road that is similar size).  How can I assess this to know if it is a good deal, or what tweaks we may need to make to the design or construction budget to ensure that it is?  

Really just looking for any advice in general as to how to best approach this project from an investment / developer perspective.  It is really my first project and want to ensure that we approach it and do it the right way.  Recommendations on how to analyze the project, approaches to getting financing to build (this one seems to be a challenge), etc would all be much appreciated!