All Forum Posts by: Sam Horton

@Shronda Sledge Is this property in a rural area that is making it tough to comp or a unique structure to the market? Typically I will continue to expand my search until I find comparables similar to the property. If comps are located in other markets I will use value adjustments/explanation to verify distance expanded or justify outliers in specs. 

The only thing I would worry with 5 or 6 banks is your credit score at that point, if each bank is doing a hard pull on your credit then that could affect your score. I've been told if you send out the app's in the same week it should count as one pull against credit. You can always ask that they do a soft pull instead of a hard pull as well. My only other question would be are speaking with direct lenders or loan officers? Depending on who you ask there are benefits to both types.

Not a CPA but my understanding is: LLC's reduce the liability an investor has. Another is for tax purposes if they are doing a lot of business a good CPA might roll the LLC into an S-Corp to help with the self-employment tax at year-end.

@Wayne Brooks Interesting, I did not know interest was taxed so high. Thank you for the advice. 

@Brie Schmidt is correct about the IRS gift and down payment required from lenders. It sounds like a lot of work for you and he is just looking for an easier transaction. He could always apply for a bridge loan which would have higher interest rates, that would allow him to carry both while he closes. Or just do it like most home transactions and just close both properties on the same day.

@Alexandra Courtney I would say if you are comfortable with your capital situation then buy and hold. If you need to build up some more capital and or reserves for other hold properties then look for a flip.

@Wayne Brooks I was thinking the higher interest would essentially work as income for the seller. With a lower buy-in price, they would have less cap gains.

I am currently working on structuring a deal for a 3 unit in Boston. The current owner has 100% equity in the property. The owner loves the cash flow but does not fancy being a landlord. I want to approach the owner and inquire about seller financing. Since this would offer the owner cashflow without the headache of being a landlord. 

In my opinion, the MF is renting $200-300 under market value in this particular neighborhood. The owner verbally said they net $2800 per month, so I believe this to be the sweet spot for her cashflow. Values in this neighborhood since 2015 have gone from $215/sqft up to $295/sqft now and there is still a lot of growth to come in my opinion.

If I am looking to hold this property for a long time. Should I structure the financing with (A) below fair market value sale price with a higher interest rate or (B) go above fair market value sale price with a lower interest rate? Any tips/tricks that you might have picked up on when going through seller financing would be greatly appreciated as well.  

MLS, Remine, property managers, and I have a friend that works at AMC that runs numbers for me as well.

I agree with both @Jacob Sampson and @Charles Carillo. The biggest concern for me would be the status of the tenants. It sounds like the previous landlord did not take care of them so I would imagine things could get worse for you if you take them on. All of these issues are fixable it's just about figuring out at what cost and does that cost fit into your budget for the deal.