All Forum Posts by: Sorin T

Hi Bill , thanks for your answer.

Perhaps I was confusing in my post above, let me clarify. I had 2 separate questions, perhaps should've posted 2 messages:

1. What do you think of the terms of owner financing for my deal, what would work?

2. #1 aside, I have 3 properties free and clear that I would be interested in a 1031 exchange for a MFA, where would I find interested parties for those?

Does this makes it more clear?

Thanks again

Hi all,

I would like your input on a potential deal.

I own this property free and clear, asking price 300K. Been on the market for several months, not a lot of traffic (remote area)

I have a potential offer coming through with owner (me) financing, 20% down and balloon the balance in 2yrs max.

 I have not done any owner financing so far for the obvious reason, I don't like to get my cash locked for a long time.

Is this an interesting deal to consider? What terms you'd suggest?(interest rate for 2yrs, etc) Any potential pitfalls? Your expert opinion?

P.S. On a different note, I own several properties like this, that I would be interested to do a 1031 exchange (for all of them) with a MFA. Any suggestions where I can find a deal like that? I live in central CO

Thanks in advance, keep investing!

Hi there,
I need some help analyzing this following deal in CO Springs. Your input is greatly appreciated.

Multi apartment buildings, around 100 units total, 80+ 1BR/1Ba, 20 2Br/1ba, laundry, parking, pool, clubhouse, the usuals
Average apt 520sqft, $500 rent, $250 deposit (current numbers, about fair for the area)
Not a great area, "C" grade apartments, 80% occupancy
Buildings in foreclosure, sold by the bank - i.e. no solid records on maintenance , income, expenses, turnaround, etc. All I know is new roof in 2009. Few apartments advertised for rent look decent though.
Complex was last purchased in 2011 for 36K/door and 5.9%. No idea how much they financed, maybe everything. Therefore, the foreclosure

My thinking is to try and get it from the bank somewhere at 20-25K/door?
Will use professional management company to manage it and keep it under tight control (no drugs, etc)
My partner and I are not experienced in large deals like this. I've done several flips and owned a rental for several years, he's also landlording several units for a few years
We're both trying to make the jump to the big leagues
We both have good strong credits and able to come up with 25% down for a commercial loan for this

I know ideally we'd stay away from grade "C" apartments to start with, but the alternatives are much more expensive, and few
Is this a good deal? At what price to make the deal work?
Should we be able to get financing for this with our apparent lack of experience, but solid credit and 25% down?

Anything else I should consider?

Thanks in advance for your input

Thanks for your replies so far, everyone. Good advices here.

Hi,

This is a tax question for flippers out there. Is HR Block premium a good tax program to capture flip income? If so, under which category do I report it?

My 1st year reporting flip income (had rentals before) and always done taxes by myself, used HR Block, started taxes this year and unsure where flip income should be reported. What's even more confusing, flip property was bought in 2011 but sold in 2012 so I'm only reporting that income now.

I also welcome any REI experienced CPA recommendations in Greater Denver area.

Thanks in advance

Tell me about it! I would've fired that agent on the spot...

So, J, let me clarify this,
For a flip that I would (potentially) hold for more than 1 yr, I still get taxed as ordinary income, rather than long-term capital gains rate?
I'm interested, this may be the situation I'm in for the property I've just acquired last week...

Thanks

One thing I found difficult to digest in those shows was the FEAR of foreclosures (short sales, etc) perpetuated and aggravated by your "friendly" buyer's agent.

Something along the lines of "OMG, we better submit a FULL PRICE offer for this REO if we ever expect to hear back from the bank, and even that might not be enough. We all must surrender to the big bad banks if we want to purchase one of their precious properties."

REALLY? That's where I find the heaviest discounts, after long and tedious negotiations, on REOs... and I doubt it's just me... anyone else?

Here's my experience with an REO property I closed on last week:
Property worth about 180-200K after repairs, but in need of about 40K in repairs.

Property listed at 150K, dropped to 120K. In no condition to get financing. After much negotiations where I held my ground (bank didn't want to budge) I got it under contract for 85K, CASH, 1K EMD, 10 days inspections, closing in 30 days. Bank allowed inspections (10 days) but did not want to extend the inspections period due to CO wildfires in the area, road closures (I could not reach the property for over a week) and also would not sign off on a release to do a septic inspection. So, I've withdrawn my offer as a result of the inspections, but continued to watch the property.

A month later, property goes to another listing agent (bank wasn't happy with the 1st one, after asking him to list at 150k) and dropped asking price to 100K. This time knowing what I'm in for, I go in with my strongest offer, 75K cash, no contingencies on inspections, 5K EMD and 14 days closing.

Asset manager at the bank probably recognized my name as I had it under contract just 1 mo before but the new listing agent didn't, or so I think. Anyway, after lengthy back and forth, with my "highest, best and LAST" submitted several times, bank seems they didn't want to drop below 85K (coincidence? my last contract price) but I was stubborn, so they finally accepted 75K. It still took them about 30 days to close, last week. So, I'm hoping would be an interesting rehab project on this. To note that this is a mountain cabin that I expect to hold a while before finding the right buyer, not a house in the middle of a city where you get 20X more traffic. I couldn't get close to those in my city, people are fighting like nuts over any REO and driving the prices way up to leave any decent margin for profit.

So, my lesson learned here: be persistent, even stubborn, stick to your price and make cash offer with little or no contingencies if possible.

Just thought I'd share that with the group, now I'm ready to start my rehab, hope to turn out a nice cabin out of this project!

Someone else's opinion:

''Well, this person shouldn't have had any kind of weapons and bombs and other devices and it was illegal for him to have many of those things already. But he had them.''

Mitt Romney, NBC News interview, July 25, 2012