All Forum Posts by: Ryan Standage

My family has a large (7500 sq ft) retail building on a small hometown type main street. The main street is mostly full of smaller boutique type retailers. We feel we can get much more rent per sq ft if we were to split the building into 3 or 4 smaller units. 

We are thinking one main entrance that would lead into a long hallway that would extend all the way to the back of the building, this would allow access to all 4 units. Would probably keep one meter and include utilities in the rent. But how would we insure each unit had it own mailing address? Would we need to file something with the post office?

Would we need to get permits from the city to make this a multi tenant property? I've reach out to them but no one has gotten back to me yet.

Those are all good ideas, thanks for the help

i have found a better way to obtain properties without having to resort to hard money loans, the market where i live is so slow that i will be able to obtain properties through owner financing. I will mostly likely buy my first house which conventional financing which i am waiting for all my credit changes to report so i can get the fico past 700. Then as long as the market is low my goal will be to obtain as many houses as possible through owner financing. I think it will be hard obtain another loan from a bank after buying my first house. But if i can find an owner willing to owner finance it will be easy to prove to them using my first home fully rented and showing them my profits to get them to sell me their home.

as for the girls or guys living there i will probably stick the guys in the ghettos and the girls in the nicer, newer homes but its still up in the air.
i just dont want guy ripping stuff up if im not going to be there.

thanks for the help so far

im trying to become more acquainted with the foreclosure market and have been doing some research on certain foreclosures here in my area but i am unable to make it to the auctions to see the final selling price and to see if the original lender was the one who purchased the property becuase i work monday through friday. I was wondering if there is anywhere these final selling prices of these properties is recorded that i might be able to access easily so i can see how much it sold for to ad to my research.

thanks alot

I have been reading up on the 50% rule, and i am trying to understand it fully. My previous method of calculating expenses only adds up to a mere 35%

my old way includes

Property tax x 12
Mortgage insurance x 12
Repairs & maintenance @ 2.5 % of property value
HOA x 12
Home owners insurance x 12

the sum of all these number / true annual rents

so what am i missing in the in my old way that doesnt add up to 45% plus or minus 2%?

do my repairs need to go up?

good observations (i really mean that, because yes i have made up my mind) and i agree with you.

1. girls... I agree, which is why i have considered it, but i think if i live in my own home i would be able to somewhat counteract the care of guys living there keeping a close watch (after all, i live there).

2. Maintenance is a huge factor i know, and it was assumed earlier that it would be a major stumbling block for me because of my lack of income, which is not entirely correct i said i had a lack of provable income. I have plenty of income, which is why i would even consider a hard money loan.

3. just becuase advice is given doesnt mean it always correct. And the same goes for my replies. But this is how we learn. I did state i was looking for some advice however the true reason for this posting was to get answers to the above questions, some of which remained unanswered. If anyone can help with these questions it would be greatly appreciatted.

thanks again
ryan

I am not trying to say that investing in a less profitable deal is a smart thing to do, nor am i trying to say this is a less profitable deal, but in this case this will be my primary residence, so i must factor in the living expenses of living somewhere else to make it a true comparison.

After all i could continue to rent from my brother and make even more in rental income per month if i don't live in my own home.

in fact i have a friend who bought and rents to college girls, he bought a middle class home in nice the parts of town. I talked with him three days ago, he told me he mounted a 46" flatscreen to the wall and put a pool table in there, and he now charges slightly above the market average for rent and has a waiting list of girls who want to move in. In comparison to the normal college living situations i have no reason not to believe him. He claims to collect $1750 per month in rent from 5 girls who live there. If i run the numbers on my own home without me living in it this is about what i would expect as well.

I have been thinking about this idea a few months before i learned he has done it so it intrigued a long convesation, and he has told me the same thing i was thinking... he wants to buy more but this time wants to get them well below market value and is looking into the foreclosure investing process as a possible means. He and i both feel undereducated on the subject and underqualified to make a foreclosure investment at this time.

Please dont take this the wrong way, i value your comments, however these are factors that i have considered, but keep them coming there may be something i have overlooked.

the insurance (HOI and PMI) and taxes are included in the $1250 esitmate. Utilities (heat, a/c, water, waste etc) will be taken care of exaclty how my brother has handled them, there is a wonderful program here in AZ (where summer months require large a/c bills) to take the last two years of your utility usage and average it for one low constant monthly payment, the bill is the split by the roomates (about $25 each) which is paid on top of the rent payment (this is the norm here).

the only other recurring expense will be the hoa of $53 dollars per month.

my total expenses (excluding repairs)

$1250 - rent recieved + HOA = -117 (monthly)

(this is also assuming i purchase the home at the asking price but it is REO and phoenix market is slow, i will definetely be submitting a lower offer)

I would like to get the expert advice and opinion of the members here on the forum of an idea I have been throwing around in my head for about two months now.

I am 24 years old and will be buying my first home here within the next two months. I have applied for convetional financing and have been approved and will be submitting my offer shortly on a REO property.

I am in a position, being in a large city and having many friends my own age where I can rent individual rooms of my home to other college kids. I will be purchasing a 4 bedroom home, and from what I have read can legally have up to 4 others in the home. At the going rate I will be able to rent the additional rooms for a total of $1420 a month in rent. The quotes I have recieved on my mortgage are around $1200-1280 a month. I will be living in the home for free and having my mortgage paid and making a small amount per month (assuming that I keep it fully rented, and assuming all operation costs because this is my primary residence). If I were to lease the home to a single family the home would only bring $1000 per month.

Juggling this idea in my head and having friends who are currently investing in foreclosed real estate I started thinking, hm... what if I could own more then one home, what if I could get them below market value, what if I could rent the second home to college kids as well rather then a single family... the more I started to see the potential to make make money, build and create equity (thanks for the tip John).

However I have a few limitations that would keep me from acquiring several homes, mainly Im only 24, have a low income job, and limited credit history with mortgages.

After I purchase my first home I think it would be hard to get financed for an additional mortgage on my salary, but I started thinking about hard money loans and the idea that it wouldnt matter if they were high interest as long as I could obtain a high enough rent from the property to cover the mortgage including the high interest and operation costs. Obviously with higher interest I would have to find more favorable deals (hence the foreclosure thinking) to make the mortgages affordable and profitable.

There are a few questions I have for you guys that would be helpful in my understanding the risk involved in such transactions.

1. What is the going rate for a hard money loan? I have read on websites 10% interest, but have heard of up to the 20's? What can I expect from these types of lenders?

2. Will I run in to the same obstacles with hard money lenders as I would with a bank because of my lack of proveable income?

3. Are there any GOOD foreclosure website/databases online that offer useful information from to narrow the search down without going to the recorders office in person and spending hour after hour looking for what could be? If so what website do you recommend? I am in the phoenix area.

4. If I were to purchase my first home, have it fully rented then purchase a second home as a foreclosure with a hard money loan, what can I expect as far as refinancing terms go? Could I expect a bank to refinance the loan after x amount of years of good payment history even with a low income job? Or would I be stuck with the high interest for the entire term or untill I graduated and got a higher paying job?

5. The loan officer I am working with right now for my conventional loan says that in the future I can count the rent as income after it has been recieved for two years? How do I need to document this to provide this as proof for future purchases of real estate.

I appreciate any and all suggestions wether they be for or against this approach of investing to help me understand wether it will be worth pursuing.

thanks
Ryan

does anyone out there know of any lenders doing stated income loans? I have talked to my friends and they have told me that there are lenders out there that offer this with a good credit score, but i dont know where to start looking. If you know of any please end me their information.
thanks
ryan

So the more and more i look into buying a home, the more and more i realize that people just dont give their properties away for nothing, all people seem to be aware of what their preperty is worth and are trying their hardest to get every penny.

However, i come on sites like this one and read all about good deals and i look at what my current location has to offer me and i dont see any of these "good deals". I just see a long extensive list of properties at market value. And i have an agent right here in my house and have access to mls.

So what is a so called good deal? The only things i can think of are

distressed seller
bank owned property
preforclosures

(please add to this list if you can)

it seems as though everything else is priced at market value. So i guess what i really want to know is how to find a true "good deal"? How does one find a pre-foreclosure? How would i go about finding a distressed seller among the thousands of other listings? And are bank owned properties priced slightly below market value truely considered a "good deal"?

thanks for the help.
ryan