All Forum Posts by: Tom Kuhen

@Michael P. Well said, thank you.

@Brian Garrett Thank you, will do!

Thomas S. I absolutely agree, I wasn't expecting the equity partner to take less than 50%. I'm considering offering more to them, maybe 60% or 70% to make it more attractive to them, and I wouldn't mind since it's my first property. Thanks for your input.

      This is geared more toward the investors who have done equity partnerships before, but I welcome everyone's opinion. What dollar amount do you look for when you decide to go in on a property with someone. Assuming one person funds the deal 100%, and the other does 100% of the rehab/ project management. I've heard 50-50 quite a bit, but if one is funding 100k with a 25k profit to split, it may not be worth it to that person, or the project manager.

    I have a property under contract, and unfortunately my mentor is tied up with 4 properties right now, making my initial lender unavailable. I have one or two other PL that I could use but are a bit more. I'm also considering a partnership with them and would like a better grasp on how to approach them.

Thanks,

Tom Kuhen

I'm looking into a couple properties in Medina county, specifically Brunswick, and could use a suggestion for an agent in that area. I'd prefer one that has worked with investors, and/or is an investor.

Thank you,

Tom Kuhen

I spoke with the head of the building/ inspection department, and from my understanding that Willowick, in regards to the sewer-dye test, they require an amount of 1.5x the worst-case scenario. If the dye test fails, and it's a $1,000 repair, they would still require an escrow amount of about $15,000 (I based this on two $10,000 estimates). Their POS is based on only 4 items (sidewalks, aprons, sewer-dye, and smoke detectors) so its not as bad as some other cities.

Just something to consider if people are looking to invest in the Cleveland area, as it ties up some of your money until the repairs are done, then remaining funds are released.

@Federico Gutierrez

Unless you did this intentionally, you may want to change your list price on here. As of now its $4,990, and I believe it's supposed to be $49,900 (based on your 25% down payment of $12,475).

Best of luck,

Tom

@Gwen Fyfe

This doesn't answer all of my/ your questions, but it may help. I spoke with someone from Sage (not just a robot), and they said that it should be spelled out in the contract, not much help. But then she went on to tell me that doing a traditional 203(b) loan, HUD may choose to offer up to $5,000 toward a repair escrow. I'd imagine if the cost is more than that, they would rather go with a conventional / cash buyer.

I'm looking at a HUD property in Cleveland, Ohio that would be a live-in flip, which has a few violations. Some are related to FHA requirements, some are related to the city's POS requirements. HUD says properties are sold as-is, but as an FHA buyer, I can't assume these violations. It is currently listed as FHA insurable though. How would that work out, would HUD set money into an escrow account to cover those expenses, or would they just cancel the deal? Also, if all the utilities are off, how would an FHA appraiser complete his inspection?

Any and all help is appreciated.

Thank you,

Tom Kuhen

Hello all,

I'm looking for a licensed GC in the Cleveland area, who has experience working with HUD and the 203(k) process, and who holds 500k or preferably 1M general liability insurance, ideally already registered in Willowick, but that isn't mandatory.

I'm trying to figure out my cheapest, and also most efficient method for financing a potential HUD house that will be a live-in flip. I'm trying to bring the lowest amount to closing (figured it to be with OHFA assistance), and also pay the lowest each month.

With the numbers I've given my loan officer, my mortgage would be about $100 more per month if I go the 203(k) route, but I'm searching for a contractor who would sub-contract the majority of the work in order for me to save cost. We could negotiate a percentage / fee for the services.

As of now, here are my main options:

-203(k) loan, for a total of about 80-85k (if a contractor does the work, about 5-10k less if I do it myself)

-FHA loan and get private money for the rehab (probably do most/all the rehab on the tail end of the 12 month seasoning period) but I would have to add approximately $300 to my monthly expenses, but I could then do the work myself.

I'd appreciate any feedback from anyone, not just contractors.

Thank you,

Tom Kuhen

@Matt Motil 

Thanks, I've spoken with Ben and Michael a while back from Fireland, but wasn't pursuing a HUD home at the time. I appreciate the recommendation, and will contact them shortly.