All Forum Posts by: Tanya Knickerbocker

One more update. I haven't gotten anything back from Capital Direct in Houston Texas. They are a total scam. Definitely stay away! I'm still calling the guy but I'm sure he's never going to send anything back. Oh well. Live and learn right? The nice thing is the broker did refund his part which is great.

I am considering purchasing a property. It is zoned R3 and currently has only one house on it. That house could easily be divided into a three bedroom one bathroom apartment unit and a second unit that is one bedroom one bathroom. The cost for doing the separating and for the repairs would be about $13,000. 

The current owner is willing to do owner financing. I was thinking of offering $130,000 with $10k down if he would do 6% amortized over 30 years. 

So far it sounds great! My problem is I I have other debt that I have been working on taking care of. Right now, I have about $6800 in credit card debt, another $6000 on a Home Depot card, and a $21,000 personal. Everything except the personal loan is 0% interest for at least another year. The personal loan is 9% fixed. 

I have the cash that it will cost to do this deal but Is it smarter to pay off other debt first? 

On the one hand, if I were to buy this house, I would have it forever. I can afford payments on the debt that I have and get it all paid off while it's still 0% interest even if I buy this house. The personal loan will be paid off in less than 4 years too.

On the other hand, if I pay off the $6800 on the credit card, I could move the personal loan to a 0% interest credit card and pay that off quickly too. That would save me money in the short-term but it wouldn't give me anything in the long term. 

So, short term or long term???? I'm on the fence on this one. Houses owned are three with two units for $130,000 just don't happen that often! Even here where housing is relatively cheap. On the other hand there will always be another one. But will there? I can't decide. What does the bigger pockets community think? 

The $20k figure includes the financing to buy it then to sell it again including capital gains taxes and fixing a couple small things that led to be fixed. I'm over estimating some things I think but not by much and there's always surprises. I'm working on becoming a realtor but I'm not licensed yet so that increases my cost quite a bit.

I have done a flip before but that was a sure money maker where I think this one isn't such a sure bet.

I am a relatively new investor who just got a good deal on a property. The current owner had an offer of $115,000 on the table but he wanted cash. I offered $85,000 and he accepted my cash offer.

Of course this made me suspicious so I had an inspection everything looked reasonably good on the inspection. There were no big surprises. 

I have three options and I'm trying to decide which one is the best option. 

#1) Sell it to one of the people who made an offer to the old owner and do no repairs at all. This would net me about $7000.

#2) Keep it and rented out. The rent would cover the mortgage and bills and that's about it if I went with a 15 year mortgage. I would on the house free and clear in 15 years or less but I would not have cash flow between now and then or at least not much. 

#3) Do a remodel and then sell it. A complete remodel of this house with new floors new kitchen cabinets and new bathroom fixtures and cabinet and floors would be about $18,000. I could then sell it for about $140,000. 

 Each of these has its own pros and cons but which one would you choose and why? I'm having a tough time figuring out what is the best option for me. 

Thanks for the advice!

Tanya

I focus on properties exactly like this.  The upside to owning in distressed areas where lower income people can afford to live is that the rent is higher relative to the mortgage payment.  The maintenance is generally lower as well.  You still have to fix the cabinet when the door gets broken but the cabinet itself is cheaper.  You have to fix the counter top that got damaged but it's formica, not granite.  Yes, you will have more trouble with tenants and may have more evictions but a pricier area doesn't stop bad things from happening, it just means when they do, they will cost more to fix.  Personally, I would go for it provided that you have enough cash reserves or credit to keep paying the mortgage through an eviction or to fix a relatively major repair ($1 - $5k). 

I already have a principle residence that I absolutely love so I'm hoping to find a way to do this without moving. I do have two other rentals with about $110k equity total so a commercial lender might work though I've never done that so I'm not sure if these would qualify. I thought commercial was for greater than four units. I have a friend who dues commercial lending for a bank so I'll see what he has to say.

Thanks!

Here's an update. Capital Direct in Houston TX had offered to finance $370k but somehow that meant I had to put 20% down on $370k worth of property! There was a lot of miscommunication and needles to say the loan did not go through. Now I'm waiting to see how much of my money I'll get back. It should be most of it but that will tell me really how it is - scam or no scam. Capital Direct said it will take two weeks to get my money back which seems fishy but as long as most of it comes back, I'll be reasonably happy. I'll update again in a couple weeks...

In the mean time, I'm still looking for financing. At this point, I would need 95% LTV until I get my money back. Ugh. That's s lot harder to find!

I have offers on two rental properties accepted that are contingent on financing. One is $145,000 for a four Plex. The other is $160,000 for two houses on one plot of land. The problem is I only have $40,000 in cash. Is there anyway I can finance both of these properties? They would both cash flow well on a 100% LTV loan. How can I get this done? If I can't, I will have to choose just one of the properties but that doesn't seem like the best solution. Any creative ideas?

Thanks!

4 points, 7%, 30 years. It's a good deal if it's for real. My broker says he has worked with this lender before but this is my first private money deal so I'm not sure what to expect.

I'm using a person I met through an REIT group. As I understand it, a hard money loan is a short-term loan of 18 months or less with a balloon payment due at the end. This would be a private money loan where an individual is lending me money for 30 years, much like a bank. Am I misunderstanding my vocabulary and that is actually hard money loan? in any case, it is a 30 year fixed rate loan from a private individual. They are charging four points for the loan and would like me to wire them half upfront.