All Forum Posts by: John N.

Does anyone know about, heard good/bad or used auction.com?  I see a few houses pop up now and then that I'm interested.  Some reviews i've searched out said that they require 1,000 deposit to bid but is returned if you are not the winning bid but they keep moving the date to keep the deposit longer.  Then I heard some other stories that auction.com does shilling.

Welcome to BG Steve, I'm also in the G.R. Area.  

Have you gone to any of the meetings at BWW? 

I’ve been a member of biggerpockets for a while but I will admit that I don’t do a lot of posting and I don’t troll the forums much since I don’t have a lot of time working a full time job and rehabbing my current home but I have been listen to all the great podcasts.

BTW, sweat equity really pays off, I gained 48K in just 2 years.But mainly it helped that I bought it as a shortsale just before the market started to come back up again, but that’s a whole other story in itself.

So I’ve been trying to get into the investment side of things for the last few years and something always happens, outbid, too much work, foundation or structural issues, priced out of my range, not able to get enough financing through the bank and the list goes on and on.

So I would like to get some info on hard money lenders and if there is one that is even reading this maybe they would want a joint or partnership or do just a straight out loan for 6 or 8 months and then I can do a refi but mainly I’m just throwing this out here to get some feedback to see if it’s even worth it.

There is development of about 20 duplexes about 25 mins from my house, Roughly 10 years old.These are huge, each unit is a 3/2 and most of them have a single and a double garage but a few of them have a 2 stall for each side.Real hardwood floors, oak cabinets, vaulted ceiling and such.I’ve been following rental rates in that area and they seem to be solid since I’ve only seen one get listed at 1,400 per month.Tenant pays for all their own utils except for water.Last year one of the duplexes was listed for just a little over 250K and sold within a month.

A few months ago, one of them came up on the market for 180K and I asked my agent.She did some digging and found out that the basement was flooded and it all has to be taken out, carpet, studs and drywall. Mold maybe? She said it’s a cash only deal.

I love the area, great school district and on top of that it’s 10 mins closer to my company.I would be an owner/occupant.So my thought is to get a hard loan, rehab it then move in, get the other side rented out to show the extra income and then refinance it since I will have brought the value back up again to the 250K mark.

Feel free to leave any comments or questions or if you would like to know any more info you can ask here or PM me.

Thanks

I haven't posted for a long time so If anyone has been following this and wonder what happened, here's an update, I should be closing on it before the end of this month.

There was a blog I read a long time ago about "the time machine".  It really is true since Oct 2013 when I had my offer in till now, the house prices in the area have really gone up and the rents have increased.  Albeit that my interest rate changed from 3.5 to 4.75 but with the rent increase that I can ask for, the numbers are still looking good.  They also just opened up a new Walmart just a couple of months ago that's about 10 mins away.

Things are really starting to come together but sure took a long time getting there.

Wow, a reply from my biggest hero from my all-time favorite POD cast I listen to every week.Always so informative.

"I'm not worthy, I'm not worth" . . . my best impression from Wayne's World but that’s going way back.

Que the waving flashback scene . . .

As with anything, I understand there is risk in any adventure but nothing ventured, nothing gained, I felt that there was more wiggle room to have the 3 rentals, two of them already being occupied before I head off and let the PM do his magic to fill the other one.I have complete faith in his operation and can be at ease when I’m overseas.

Thanks for the encouragement and I hope that biggerpockets isn’t blocked in China like many other sites I tried to get while I was there.

I‘m in the process of buying my first SF rental on a short sale. YEAH!The quick number (based on the 1% rule of thumb) is between 1.7% - 1.9%. I’m putting the 20% down and after the mortgage, PM, tax, yadda yadda, it’s still putting money in the bank.Of course as long as it’s rented out.

Now for the twist.

I’ve been offered a fantastic (unrelated) position in Beijing to work and study.This needs to happen by Jan of 2015.I’d be there for a few years but will be able to travel back to the US once or twice a year for a couple of weeks.

Soooo . . . the problem lies with what I have currently.I bought a short sale back in Oct 2012 that I am currently living in and rehabbing.I bought it for half of what it’s market value is (currently) and my plan was to sell it on the 2 year anniversary (Oct 2014), run with the gains to buy a duplex to be O/O.But then this lifetime opportunity came up.Maybe Paula Pant can chime in on this since she is also a world traveler too.

BTW, China is nothing new to me since I have already been there 5 times within the last 6 years and have always dreamed that someday I can just go and stay longer.

My real question is, do I still buy that duplex or buy a second SF in cash with the gains or do I take the risk to buy the duplex, live in it for a couple of months before taking off.I believe having 3 rentals and only 2 mortgages, there’s enough wiggle room to not stress out if one should stay vacant for a few months.Or just have 2 rentals and only one mortgage?

I do plan on returning back to the US after a few years so having 3 rentals I could time it right with one being empty to have a place to live.

I’ve already started to build a team.My CPA (who I have used for my taxes for many years now) already works with other investors that are currently overseas and even recommended the PM which she also works with on her own properties.I’ve met him a couple of times to hash out small details and he emails a status report every month.He also has his “own” team of people, like plumbers and such.The best part is, he only charges 10% on the rent collected, not a fee per month even if it’s empty.

If there are any questions to help fill in the blanks that I might have missed, you can fire away.

Thanks

Thanks but I've been scouting that area for 2 years. I love neighborhood, it's quiet with a lot of cul-de-sacs.

Even thou I am just starting out. I have had the time to meet several different people and started to build a team as early as 2 years ago before buying my first. One happens to be a banker that knows me well enough so guess he was able swing it by the underwriters.

The homes in the area that I am most interested in are all the same size. What makes the difference is if they are sold normally by owner with an agent, sold as a shortsale, sold as a foreclosure or abandoned which a couple of them have been.

Well, after 3 years of reading books, 2 years of reading different postings here with many podcasts and 1-1/2 years of being a member of the local landlord association and attending many classes I finally have my break to get my first property.

First the specs. It's 780 sq ft, 2/1, full basement ranch style with an detached garage. The basement is unfinished which I like for better inspections.

I'm picking it up on short sale for $43,500. Current comps in the area are ranging from $50,000 to 80,000. This house sold for $89,900 in 2004. Tax will be $1,850 and insurance at $463 (already called my insurance company).

Rental comps for 2 bedroom / single family homes range from $750 to $800.

The numbers I came up with is nothing great but I plan to buy and hold for a very long time.

I’m putting 20% down a 30 year at 3.5%. My lender is telling me $161.66 for principal and interest but factoring in his escrow would be a total of $404.99 but I think his number for tax and insurance is a little high.

After looking at the numbers and throwing in myself for repair reserve, vacancy rate, property management, I’ll gross $165 per month providing I rent it out on the low end. It’s not much but it’s a start to get my feet wet.

Let me know if I’m missing something or on the right track.

Thanks for all the great posting from the past and future and really look forward to any replies.