All Forum Posts by: Stephen Reyes

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $140,000
Cash invested: $160,000

Purchased with cash to close fast and get for low price. Intended on taking a mortgage after to use for another purchase. However, I found out that banks did not want to lend me money on a property that I had purchased less than 120 days ago. Even though I was only looking to take about %60 of the value. So I had to wait 6 months. By that time the interest rates had increased and I no longer wanted to take a loan.

What made you interested in investing in this type of deal?

I am buying and holding rentals to provide retirement savings/income.

How did you find this deal and how did you negotiate it?

Realtor brought it to me. It had fallen out of another deal due to the buyer's financing. The seller was on a tight timeline so I offered a low, all-cash price to close in 7 days.

How did you finance this deal?

Cash

How did you add value to the deal?

Replaced rear deck, some flooring repairs, small electrical repairs.

What was the outcome?

Outcome has been great, with the exception of the amount of cash I have tied up. I uses the large metal building in the back as my workshop and rent the house separately.

Lessons learned? Challenges?

You cant get a mortgage directly after a cash purchase.

I am also from Washington state (Kent) and prior military living in Pensacola (guess there are a few of us down here).  I have four houses in Pensacola (actually 3 in Pace and 1 in Pensacola), have lived here since 1997 so I know the place well. Happy to help if you have any questions about areas, etc.  I am currently trying to get into my first multi-tenant.  Have not found the right property yet, thinking about building one.  

I have a rental and the current tenant (has rented for 2 years) is moving so will not be renewing the lease. The house is in very good condition but it is an older block home in a neighborhood that has some challenging houses.  I am considering Section 8 for this property as kind of a test.  Anyone who has done this and has advice I would love to hear it.  The property is in Pensacola so if you have experience with the process in Pensacola specifically, I would be even more interested.  Thanks for any tips!

Welcome!  I am also in the Pensacola area, been investing for about two years.  I only do buy and hold LTRs.  I plan to use a management service at some point but mange my own for now.  Please let me know when your next investment seminar is, I would be interested in attending.

Did you just close on this today?

 I tried this and learned banks won't lend you money on a newly purchased house.  They want you to wait 6 months before they will give you a mortgage.  Not a huge issue, but I wish I would have known that before I tied the amount of cash in a specific purpose.  Looking back I am still glad I made the purchase though.

My firm (Saltmarsh, Cleaveland & Gund) has several CPAs in Pensacola (not me, I am a technology guy that invests in RE) that work with real estate investors. I would be happy to connect you if you would like me to. 

 In Santa Rosa County we have the Building Board of Adjustments.  This is a Board that citizens can bring these complaints to and the Board will take action against the contractor.  I know Escambia county has a similar Board.  I would suggest contacting the permit office and ask how to make a complaint.

I purchased a house recently that had some issues and required a cash deal.  I have now completed the repairs and had planned to get a mortgage on the property to fee cash for another house.  However, I am being told I have to have owned the house for 6 months before I can take cash out?  Has anyone else heard of this?  Any reasonable ways around it?

If you bought it in 2020 I would not think you would have a short term capital gain issue.