All Forum Posts by: Scott Schultz

Generally i dont figure in CapX or vacancy, because my monthly positive should cover those across several properties, and i figure in big ticket stuff when i buy, my formula is based on after repaired investment (I.E. Purchase price + rehab) financed at 5% on a 10 year amortization, plus annual Taxes and Insurance, must equal $250/mo positive. 

example: Purchase $25,000, Rehab $5000 = $30,000 (AVR $65-$85K) 10 years @5%=$318/mo Taxes and insurance will be about $2000/yr divided by 12= $167/mo + the $318= $485, so for this example i have to get $735/mo to fit my system. and yes I am doing this. I also swing the hammer, and am buying at or below 50% of FMV. my 10year amm insures i will not get in trouble if time get tough. and my equity position will guaranty I can always sell. I have purchase 4 like this in the past 4 months.

BTW, thats making sure im at or below market rent. 

I have been a Licensee since 2007 and full time investor since 2010, i am an independant broker, so no ties to an office. for me I love my MLS access for analyzing deals, both needing to coordinate showings when you agent is available, reping my own HUD, Hubzu, Wiliams&Wiliams ect. I also List my own Flips, saving me the Listing side Commission, and I can offer a bigger co-broke when i list, giving other agents a better reason to show my stuff.

As far as working with an Investor/Agent, you have to develop a trust and understanding that you wont step on each others toes, find your own deals, dont just sit and wait for your agent to email you deals, be diligent in your search, watch every day, look at the auctions, and MLS, every day or even several times a day, its part of my routine. If your agent is loyal, be loyal to your agent, let them write your offer, and list your flips, let them rep you on an auction property, but make sure you understand each other, its a relationship, and it needs to develop.

its a pretty typical REO Transaction, I was a Listing Broker for Fannie for years, the process has changed a bit, but the basics have not, dont send them an offer of 50% of list an expect them to accept, just not gona happen (in most cases) the closing can be slow, but most REO's are, and be sure the title company gets a special assessment letter, its often missed. Oh if you didnt know HomePath is the REO division of Fannie Mae, and HomeSteps is the same for Freddie Mac

It wouldn't matter if its an LLC or not, what is known as "title seasoning" is problematic in FHA and many other loans. Freddie/Fannie issues come up as well, primarily when PMI is involved, so you need to stay up to date on PMI guidelines if doing short term flips, many of them have NO WAY in 90 days rule, and 90-180 days a 2 Appraisal rule, and it doesnt stop at the PMI company, some Lenders have their own internal set of guidelines on this, so one bank may be able to do it and another cant using the same secondary financing, the funny part is most loan officers have no clue what you are talking about when you try to cove this on the front end. I call the banker on the pre-approval and ask the questions, and i usually get a silence, and i will have to ask about that, or i've never heard of such a thing, but then 40 days into the 45 day contract they kill the deal based on the title vesting not being seasoned. Oh and it runs from the day you took ownership, to the day the offer was drafted not date accepted. Good Luck!!!

@Waylon Brunif there is anything i can do, to help, let me know, I am a full time Investor in Rhinelander WI, Eau Clair is a few hours west of me, but if my area works for you i may be able to supply you with wholesale, or turn key, if i know what your after, I am also a broker, and generally can get into the online auction properties that dont have inside pics. or view MLS listings. Bid HUD's what ever, let me know.

@Tyler Kaye put another way, you would be the holder of the "First Mortgage" in a situation where say a buyer is purchasing a house for $100K and did an 80%/20% loan, First position would be the 80% and second position would be the 20%, you always want to be first in line if they default. 

@Brandon Battlethats cheap owner financing!!!  most banks have a rule that they have to make 4% on their money so if you borrow at 4.5% you have to lend at 9%, there are plenty of owner finance deals in WI at 11%-18% cuz if they could get a bank loan they would, but if they cant, the risk is pretty high, especially if the down payment is low.  

Why dont you just be there lender on it? they give you a mortgage, and you be in first lien position. 

otherwise you could buy it, and do a Land Contract with them, or do a Leas option, just get enough option money, or down payment, that you are protected. 

Im all about buying used, but if you are going new, in most cases Black is the same price as white, and if black makes you feel better about it go that route, for me I'm gona error on on Cheap, especially in Blue Collar, its gona get trashed anyway.  

We see the same thing in Northern Wisconsin, you can have 2 1400 sq ft 3 bedroom ranches in the same neighborhood, one has not been touched since 1980, but clean and well kept, the other updated with, new cabinets, granite countertops, tile floors, new roof and siding, furnace, ect. they will both sell within 5% of one another. you have to get a deal when you buy, and be below market when your done, or your sunk.

in many cases the auction sites like Homesearch, H&M, Auction.com, Hubzu, XOME, and the like are selling prior to and insurance pay out, but after legal foreclosure, at which time title may not yet be quieted, i find in most cases it is, but they just cover themselves in case they miss something, and lay it on the buyer, thats why you get a discount on the property.