All Forum Posts by: Account Closed

What a great explanation of this process. I like the detail numbers too. This is definitely something I am keeping in mind for future transactions.

Title reports are the best way to get the lien information. Make sure to pay for title insurance too.

Welcome to the forums and community.

If this was not your parents then I would look into "Subject To" on the mortgage. If you are assuming the loan then I would talk to their bank about being added to the mortgage instead. Their credit will help you get onto the loan then after a year of good payments have the bank take you off the loan.

Bigger Pockets - of course this one is on the list. They are awesome and have tons of information packed into each show.

Flipping Junkie - This guy has been at the flipping game for a long time and has tons of good advice.

The Property Podcast - These guys are from England but have good ideas and interesting contact.

The down payment might be good. You could have her put down the 20% down for investment properties through a commercial lender and give her 5-10% interest only on the loan each month till you can pay off the principal. You will be paying more initially on a "double mortgage" - one to her and one to bank but it would make you both money until you have enough capital to do it without her. 

I just got done researching a great piece of land just to find out that a wetland ran across the property and could not be re-permitted until Spring. Here are some to the things I have learned through this process:

• Need to contact the local office of the DEQ to find out about septic approval or connections to city sewer. If none has been done then you will need to have a septic company come and spec one out or a plumber who can do city connections.
• Find out about water, is there a well or connections to city water? If no well then you will have to contact a drilling company to put in a well then there will be pump and power needed for that. If there is a well then an inspection needs to be done by the seller for water quality. If city water then need to have a plumber who can make those connections. 
• Contact the county or local planning department to see if there are any issues with building on the property - bring donuts and make friends as these people will make or break you.
• If you are unsure of the borders of the property, then have the seller order a professional survey be done.
• If there is a Department of State Lands or similar in your region then find out about any special delineations on the property.
• Find out about power. Contact the local power company to hook up both temporary and permanent power - you will need both to build and need to make sure with them what it will take to get power to the property if it is not there already.
• Get an excavator to come out and give opinions about where the home site / foundation should be. They will be better able to scope out the landscape and find the cheapest path for driveways, etc.

That is what I have learned so far. Hope it helps. 

There is no need to sign the contract - hopefully you didn't as it will lock you into a deal with them. 

1. If you didn't sign the contract then feel free to work with every agent in town. Shop around for the best few and give them all the business with no contract.

2. You can still find houses outside of the agent but anything on the open market will have to go through them.

3. Each side of the transaction usually makes 3%, so 6% is possible if the agent represents both people. If you signed a contract to give them 6% on every transaction then you are being robbed.

Either you or the co-signer on the FHA loan will need to occupy the home for the first year. If you have more to put down then go with the conventional route.

If you buy the quad-plex with the future in mind then you should be investing the majority of the rents into the mortgage. This will be an over simplification but look at some simple numbers:

Year #1:

4-plex @ $400,000

FHA Mortgage (3%) =$1,700 / month = $20,400 / year

3-rents @ $1,000 / month = $36,000 / year

Natural / Forced appreciation (10%) = $40,000 

Year #2:

Refinance @ $344,400 ($440,000 value)

Traditional Mortgage (4%) = $1,650 / month = $19,800 / year

4-rents @ $1,000 / month = $48,000 / year

Natural / Forced appreciation (10%) = $44,000

2nd 4-plex @ $400,000

FHA Mortgage (3%) =$1,700 / month = $20,400 / year

3-rents @ $1,000 / month = $36,000 / year

Natural / Forced appreciation (10%) = $40,000 

With natural and forced appreciation plus the equity gained by investing rents, there should be plenty of room to lower the mortgage amount - watch out for higher interest rates because they will be something that bites after coming off a FHA loan especially if rates increase.