All Forum Posts by: Sheena R Roth

@Kevin Anderson Welcome Kevin!

@DeAndre I’ve found that it really helps the approval fly thru when you present a tidy and informative set of documents to the loan officer.

I use Stessa to categorize my purchase/rehab expenses if the bank wants to see those.

I use Dealcheck.io or BP calcs to generate a report on projected income vs. expenses for the property.

Dealcheck, Zillow, Refin, your agent, etc. will also provide sales comps that I include to help the bank project the property's ARV.

For future refi projects, Stessa can also easily generate net cash flow reports on properties that the bank refinanced previously to show that they are performing well.

I have found that when I provide those details to a lender they are very appreciative and usually indicate that there shouldn’t be any trouble getting approval.

Good luck!

Property type: fire station with on-site living quarters

Scenario: The property is currently rented to an EMT company to park their ambulances and house the EMTs while they’re on-call.

A new owner just came into the picture and has offered to buy the building for $195k (we believe this is about $40k over market value). We’d like to sell but we only have $88k in the building and we don’t want to pay capital gains on the difference; so we’re looking into a 1031 exchange.

The problem is that our target market is very low on inventory right now (I’m attributing a lot of this to COVID uncertainty) and therefore prices are inflated.

We want more than the standard 45 days to identify a good property to move our equity into via the 1031 exchange.

My question is this:

Is it possible to structure a deal where we all agree on a price and sign purchase agreement but don’t actually close on the deal for an extended length of time? Like maybe up to a year?

The buyer already has possession of the building as a tenant currently. He’s a cash buyer. He’s very motivated and willing to work with us so I think it’s a good opportunity to try a creative strategy.

This is how I envision it playing out:

Once we signed the purchase agreement, we’d collect a hefty deposit from him, his company would stop paying us rent, and he’d be responsible for all maintenance, insurance, taxes and other property expenses.

We’d take up to a year to find a good 1031 property and then we would go ahead and close on the fire station sale and the buyer would transfer the remainder of the sale price to us.

Has anyone done anything like this?

Am I overlooking possible complications?

Is it a crazy idea?

I was just doing a search on a similar topic and and came across this thread. I know a guy whose landlord sets aside $100 of the rent every month. As long as the tenant pays rent on time, that money is his. If he were to pay late, he would lose out on the accrued money and has to start over. The idea is to provides motivation for the tenant to prioritize paying rent on time while also helping him save up for something like a downpayment on owning a home some day.

Thoughts on this strategy?

@Karl McGarvey The downside to turnkey properties is that someone else has already come in and created value, which is where most of the opportunity is if you're hoping to grow your money in the short term. With $50k to start out with, you can either put a downpayment on one or two turnkey properties and watch your equity and cash reserves build back up over the next 30 years, or you can buy a small distressed property to flip or BRRRR and really get your snowball rolling.

I know it’s intimidating going into a deal without a team in place, but I can say thru experience that you can get solid leads on contractors pretty easily through a few hours of networking, before you even buy your first deal. Pick a weekly meet up and start going to the same one consistently. You’ll find people who are not just happy but excited to help, especially when they see you coming back a few times and realize that you’re serious about getting plugged in.

@Jed Devine That’s awesome Jed! Are you willing to share any tips for finding contractors for out of state rehabs?

Jack, Just curious, how did you initially find the property? MLS? Auction? Cold call?

@Billy Bell

I think listening this BP podcast episode would be worth your time:

BiggerPockets, #301 with Alex Felice

If you’re on a time-crunch start the 19 minute mark on the podcast.

Here are my notes from the episode:

Problem: Lender's typically require 6 month "seasoning"

To avoid the seasoning period, use the Delayed finance exception:

Fannie Mae - finance for 100% of HUD-1 (purchase price - taxes) BUT the little known fact is that you can add contractor costs, repairs, etc. OR 75% of LTV/ARV, whichever one is less. Applies to SFHs, different restrictions for multi units.

Get the HUD-1, go to the title attorney and ask if you can add stuff to the HUD-1. Give them invoices for the contractor, etc.