All Forum Posts by: Shaun Patterson

I wouldn't show him any personal information. I have seen a lot of self managing landlords do this and fall into the landlord owner trap. They end up being at the beckoning call of the tenant. The tenant knows that all rules come through you and it makes it harder for you to set up your policies and procedures. Even when our company owns the property we still separate ourself from the property.  It makes it easier when they have questions about late fees or other tenant issues that may come up. To get around the issue of ownership we obviously have the management contract between the owning llc and the management company ready to show the tenants. In your situation if you have the property incorporated then it will show you online as one of the officers. 

I do meet a lot of the nicest guys that want to help also. so I wont say its one sided. But I have seen from some people  when I tell them Im not looking to flip houses  or wholesale (I get the omg your crazy look). I tell them that Im looking to buy and hold and not follow the latest new wholesaling Fad or flip houses for the 30k profit. (I sound like a old man thinking about it now lol) 

I would only add one comment in regards the rate changing. Find out if there is a cap on the rate that it can increase. after you get the cap on the amount that the rate can increase run the numbers with the maximum interest rate that you will pay. If the numbers still make sense then go for it. You dont want 5 years down the road something happens to the economy and your now paying 10% interest and because you didnt forsee that happening you now are cash flowing negatively

Hey guys I wanted to get everyone's feedback on this type of stigma with young people in the real estate industry. So I've been going to a lot of different meet ups and I have notice that when people meet me they have alot of different stereotypes before I start to talk to them. I had one guy literally ask me my age and then his next question was if I owned my own home? I'm sorry I guess anyone 30 and under was a person that rented and knows nothing about real estate. I then had to explain to him that yes I own my own home. I also own my own commercial property management firm. After then being able to hold a conversation with him about the ins and outs of commercial property management he then decides to tell me that I should think about investing in real estate. I then tell him that I currently own real estate. Now not to the level that he does but I'm not at his age yet. The bad thing about this is that I think this type of stigma stops alot of younger people from doing deals with the older guys in the industry just because we are seen as inexperienced and ignorant.  If I didnt know how to talk to him and actually articulate what im looking for in the real estate industry I would just be pushed aside. 

Originally posted by @Lin Ding:

Originally posted by @Shaun Patterson:

We are currently in a house hack purchased in 2014 that we got this way. 

3 bed 2.5 bath

Purchase price:124k 

10k downpayment assistance from 

The Florida Assist (FL Assist)

3k in closing cost assistance from the bank. 

2.5k out of pocket for down payment and closing cost. 

2% closing cost paid by the seller. 

10k in repairs. 

The value now of this property is 169k(based off Zillow, and the townhouse next door selling for 162k). We are now getting everything finished to sell the property.

The mortgage payment that we had was 958. 

We rented out the 2 rooms using air bnb and craigslist to supplement during that time. 

FHA can work but it has to be a good deal. The rents in broward vary based on where you are buying the triplex. It might just be that where you are looking the rents are to low to cover the 300k loan that you will be getting. If so then look into 4 unit properties to make the FHA loan work since you will need to be cashflow positive while living in one of the units.

I'm guessing that you are running the numbers based off just living in one apt and renting out the other 2? 

@Shaun Patterson I'm on the same boat. I was also offered the down payment assistance by my mortgage broker. My offer is $15k dpa like a second mortgage (with no interest) to cover down payment and closing cost. But the trick is I have to have it for 5 years. But 20% is forgiven each year. For example, if I sell it 1 year after, $3k is forgiven and have to pay the $12k back; in 2 years, $6k is forgiven and $9k has to be paid back. For an owner-occupied property, it may be a good deal. But for a quick fix-and-flip, it may not matter. Do you have to pay back the $10k for dpa?

 Hey Lin,  

Yes we have something just like that program. They put a no interest 2nd on the property and when you sell the balance is taken out of closing. When we did the numbers we factored the closing amount that would have to be paid. 

I agree your discounting your sweat equity a lot. I would use this as a stepping stone to build your down payment money up for future deals. From what you said everything is split 65/35 what if a furnace has to be replaced or the ac breaks? I dont know your area that much but these are just examples.  It might not be alot for him but you might run negative on your part. Make sure that you think about things like this. I think if you run the numbers properly and include reserves in your numbers for these expenses. BUt all in all if he is putting up the money and your getting cash flow from your hard work this would be a big boost to your ability to partner better with him in the future (probably up to the 50/50 mark when you have some skin in the game on deals.) 

Hey Russell I did have a comment on your statement about the markets and there being no such thing as a deal. That would mean that people who get off market "deals" for example: husband dies wife doesn't want to live in the house and sells it to investor friend for 10k just so they can have money to move in with daughter in another state. The true "value" is 150k which is without any repairs or work needing to be done. Now these are just random numbers given. But these deals have happened. Are they one off? Yes they are but they go contrary to what you are saying. These are the deals that everyone looks for. Will you find a deal like that from a realtor? Not in your life. The first thing a realtor will do before selling a property: if they are good is pull the comps and verify the price they are selling for is around the market price. Do people sometimes misconstrue that they have a deal like this sometimes? Yes a lot of the time it is done and that's due to them not fully understanding the terminology as you said. But it is incorrect to say that deals aren't out there.

Yes I would definitely check for violations. I had a bad experience while looking at a good deal that the city had a nuisance violation on the property with roof and paint violations just to name a few. She is an old lady so there might be a lot of interior repairs that will need to be done. But you have to get in a see the house first.

Hey Kurt, I actually did a lot of research in this subject in Florida my self when looking how to expand my PM company. One of the things I have notice that seasoned wholesalers (not the guys that just get a book and read for a week) the use transactional funding to bridge the gap between when they put it under contact and when there buyer/investor get the contract. They also have a crazy list of investors that they can call at a dime to buy properties. From what I was told this way would show that you have the fund to purchase. Go through with the purchase (i.e. Double closing) . There aren't many title companies in Florida that are good at this and I would say unless you have the correct financing in place to hold the property long enough to show it was bought by you it will be seen as illegal from what you just said.

Yes I would also agree that the lease option is the best. Hold it for a year get the difference between what your paying them and keeping and hold it for extra down payment money. This doesn't show anywhere which is what you guys needed. Now my question would be does this property need any work? If so this can be a way to help yourself and the current owner. While showing them the lease option break out a plan that explains what you will be doing to the property to create value during that time. This will help cool there heads that your not just trying to take some money from them for 3 years and then change your mind.