All Forum Posts by: Stefan K.

Patrick L. that's where I keep landing. Probably most likely to happen with someone we already know. We'd also meet with the lawyers to discuss the quiet title ahead of time to make sure there's no obvious issues.

We'd have our max bid and if it didn't work out, so be it. We worry more that if we don't do anything and it does sell closer to 60% of market value that we'll be kicking ourselves.

Another option we've discussed is a finder's fee. Not sure how to lock up an agreement on a finders fee without disclosing the property and risking someone just stealing the deal from us.

Bulk decreases, that makes sense. I've only seen a couple that I've been interested in that seemed fairly priced but they sold to owner occupants during the first look period.

First, let me say this is not a solicitation for funding. I'm seeking advice.

My business partner has brought forward an opportunity related to a house going to a tax deed sale. In our state, after the sale you don't receive a warranty or QC deed, you get a tax deed, there is no redemption period, and the title is clouded. So for a flip we are building in a 6-month period to quiet the title, plus selling time after that - so let's say a 9-month holding period.

We believe there could end up being a sizeable amount of money to be made on the property if it does make it to auction and we have information that leads us to believe it will. Both of us have been investing in tax liens for a number of years but have no property deal experience, nor do we have the amount of money it would take to purchase at auction. Going in, we have a firm maximum auction bid amount that makes sense to us.

The question is, how would you fund/structure this deal? We've thought about the hard money route, the equity partner route, and the private loan route. I do have one potential prospect to pitch the equity partner or private loan route to, but I'm not sure how best to structure it with them. If that doesn't work out I'm not sure where we go from there.

As far as our part in the deal, we found the deal, would go to auction to bid or advise, would be willing to cover the quiet title action and take care of the selling process. At most we could put in 5% of our maximum bid amount if necessary.

Thoughts?

I have Fannie Mae Homepath alerts set for the three counties (Tampa, Florida area) that boarder where I live. Normally, there will be up to a handful of price reductions in my daily email, but today I noticed that in one county there were almost 20 price reductions and a dozen in another county. The third one only had 2 price reductions.

Do you think this is driven by Fannie overpricing Homepath homes and it's finally catching up to them and they have to drop the price to move the property or potentially the market is cooling a bit in my area?

Frank Tamburrino thanks for the response and thoughtful insights. On your total cost range, is that with contracting all of the work out or do you do some of the work or does your company have employees that do the work?

First of all I want to say that I love BP! It's great having a place that I can come to and throw out questions like the one below. Thanks to Joshua Dorkin and everyone who comes to contribute.

I have an opportunity to put in a short sale offer on a property that would cash fow nicely, but it needs some light rehab and I'm new to this so I don't have much of a gauge on costs. I plan to have more than one person come and give me a quote and might be able to some of it myself, but beyond money my biggest constraint is time.

Here's what I saw as the necessaries when I walked through the house:

3br/2ba/1cg - 1,496 sq ft (3Br is a converted sunroom - lots of windows and a closet)

-eat-in kitchen needs baseboard
-refrigerator
-dishwasher
-bedroom (converted sunroom) has ugly vinyl floor – replace with carpet? other?
-other 2 Bedrooms – back of closets plywood – apply glueboard or something
-paint interior
-outdoor privacy fencing to block off big green electrical box in back corner of yard
-backyard - lumpy, don't know what to do about that, grass spotty – don’t really want the cost of resodding

What kind of budget would you put together for this rental ready rehab? Am I looking at $3K, $5K, $10K?

Thanks!

Ron Snoes how did your Homepath purchase turn out? Did you get concessions?

I'm looking at a Homepath property right now. Haven't decided if I'm going to use the Homepath loan or go conventional. I'm going to have my lender mock up both and then decide. I'm sure he'll let me know what I can and can't expect, but thought I'd ping you on your deal.

Bill Gulley great point on the insurance. Could that just be part of the contract that due to the conversion(s) contract contingent on ability to insure with conversion(s). I'd like to think it's as easy as just avoiding the situation, but it seems like 1/2 the houses I've looked at in my area have some sort of conversion and some of them would cash flow nicely.

Bienes Raices I see there was never a response to this question from a year and a half ago. I'm bumping this thread since I have the same questions because it's pretty common for people to enclose garages and/or sunrooms in my area and turn them into bedrooms.

I think I understand the issues - might not pass inspection if not up to code, liability issues if inspector missed something, code enforcement issues if not propertly permitted... What other issues am I missing?

Dawn A. thanks for the link. I checked out your blog post before heading out this afternoon. So true about squirrels - we've had a couple blow up transformers at work.

Thanks everyone else for the advice.

Here's how it went:

House 1 - Homepath - Everything looked good until I hit the enclosed sunroom, which had sever cracking throughout the one side with signs of water damage. Looked like the sunroom was basically breaking away from the house. There was also the tell tale stair step cracks on the outside of the same room. Everything else was cosmetic.

House 2 - Private sale - Had some nice touches to it - things I would be looking for in a home, but not necessary for a low cost rental house. There were also a lot of enclosed rooms not showing up in the sq ftg. Was asking more than I was willing to pay and made it clear he's not negotiating and feels investors are comparing apples and oranges.

House 3 - REO - Loved it. Tomorrow would have been day 16, but they accepted an offer from an owner occupant.

House 4 - Short sale - This is the one still on my list (spoiler alert for House 5). I'll transfer this over to the deal analysis section tomorrow.

House 5 - Short sale - 2BR/1BA on a lake. Walked in and it had a strong mildew smell. Both BRs were small, but the one was rediculously small.

That was day one of rental property house hunting.