All Forum Posts by: Steve Babiak

The zoning restrictions usually aren't about the number of bedrooms per home. The restriction comes about in how a local zoning ordinance defines "single family". In one town where I farm, the definition of "single family" is limited to three unrelated persons maximum; in another town with borders touching that previous town, the definition of "single family" is limited to two unrelated persons maximum. That is intended to avoid frat house stuff as seen in the movie "Animal House". Now, the number of related persons is another matter, and that usually will be set by the amount of sleeping space.

In 2008, I was able to get HELOC on a NOO property through Wachovia Bank. Not sure if they are still doing that (especially since now they are part of Wells Fargo). At that time, Sovereign Bank was also willing to do a HELOC on NOO, but at much lower LTV.

One strategy mentioned by an attorney in PA at a seminar I attended: Get it under contract, and then do a "conditional release of contract", where the conditions require original seller to execute contract with your buyer at the price you agreed on with your buyer, plus you are to be paid as a line item in the seller's HUD as a "release from contract" fee. Entice the seller to do this by explaining that they will receive added net proceeds at the new price, and make sure that they do (you have to cover any extra seller-side transfer taxes, for example).

Note that this accomplishes several things: no assignment of contract (in PA there is an extra set of transfer taxes due when that heppens); it gets the wholesaler paid on the HUD; since wholesaler is paid on the seller's side of HUD, the lender isn't going to worry too much about that release fee.

Eddie,

I am in PA, and used their coverage on my last flip.

Give them a call to see what they'll do.

The reason we used them: they offer vacant premises coverage in 1-month intervals; most others only do paid-in-full 3-month (and longer) for vacant premises. And that paid-in-full means even if you sell in less than the 3-months (or whatever term of the policy) - no refund of balance for remaining period of time. My opinion of that: it sucks. So go with 1-month coverage, if you can get it.

One option you might want to look at is Renovator's Insurance Program from:
http://www.wrennins.com/

Eddie,

Hooks Van Holm handles my region and state too.

Face it, in the post-foreclosure properties, the listing agent wants to get as high a price as possible - to get as high a commission as possible.

At some point, the only offers that come in are all lower than the listed price, and somebody working for the seller has an awakening and makes the adjustment.

Whether HUD or REO, this is what seems to happen.

As an REO listing agent said to me the other day, even the listing agent doesn't know when that will happen - but they expect that it will at some point in most cases. And the sellers of these post-foreclosure houses are still hoping that some clueless newb will pay asking to get into a deal. As long as this also happens, expect price adjustments to be somewhat unpredictable.

But stay the course, and keep making offers that will be profitable for you.

Dick,

I'm guessing that you don't have a landlord-friendly lease form that you are using, because if you did I think you would be more on top of payments and what the lease permits.

If you are using some office supply lease form, then I suggest you get a real landlord-friendly lease. One that is legal for your state, of course. One that I have for my use actually has a clause to the effect that the lease itself serves as notice to quit (that is permitted in PA).

But get them out ASAP. And don't be surprised if there is physical damage to your unit due to this tenant.

It's a HUD property. Stay the course, as they will price reduce it. See my post at:
http://www.biggerpockets.com/forums/20/topics/33010-question-on-a-hud-offer

He's got a 6.8% commercial loan on that; he's not going to be lucky enough to get better financing than that at this point (from a recent commercial loan presentation I attended, that was at the lower end of rates for my area).

Looks like other posts are spot on - he paid too much, and if he can find an investor to buy it on a short sale, that might be his best way out.

Not only should you give them each an application, you should qualify each of them "by themselves". Roommates tend to get into disputes, and one moves out - leaving the other behind. No matter which one gets left behind, you want that person to be able to afford the rent on their own.