All Forum Posts by: Mark S.

Will Barnard , are you saying that by owning a property free and clear with monster cashflow, that makes you more of a target for lawsuits? This might be a dumb question, but how would anyone know?

Mike Webb , how did you form your LLC - online or local attorney? Also, at what point in the process did you do this? Just read a few posts on here with conflicting advice and I need to figure this out.

Mike Webb , that's awesome! Congrats, man! I'm a few steps behind you and have an offer on a property I'm hoping to get under contract. It's crazy that I'm actually at the point of taking action. Your $1,800/month, is that gross rents or cash flow? Pretty awesome numbers.

@Benjamin Ertl , welcome to BP Nation! You'll learn lots here. I'm a new investor, too, and I've learned tons. I would highly recommend the podcasts. They're awesome.

@Paul Nagy , I've often asked myself the same question that you presented yourself about whether or not to buy it as a rental if you wouldn't live there. I actually walked away from a 4-plex foreclosure that would have cashflowed very nicely precisely for this reason. That's actually part of the reason that I'm now mostly looking at SFRs and before it was multi-family.

I've come to the conclusion that I'm likely never going to get an "A" neighborhood rental on a "C" neighborhood budget. I am planning to stay away from "D" neighborhoods at all costs, and am targeting "B" to "C" neighborhoods. In my case, I've yet to lock up my first rental. I recently put in and am negotiating an offer in a "B- / C+" type neighborhood. There comes a point where you say, "I might live here, although it wouldn't be my number one preference. I'll likely be able to attract good tenants" and you just go with it.

At least that's my two cents. I'm interested in others' opinions as well.

Congrats, @Scott Schramm ! I have an offer on my first rental myself and am hoping to hear back very soon that I have it under contract. Exciting times!

Welcome to BP!

Shane Johnson Thanks for keeping my thread alive, haha. This is my first deal in progress, so I definitely need a bit of handholding. No, I do not have the official word that I got the property. Honestly, it's been a weird (and shady) process. Hopefully I get news soon that I got the property under contract. Thanks for your advice on the financing. I was leaning towards 15% down and putting the other money towards the mild rehab. Obviously I don't like the higher rate and slightly smaller monthly cashflow, but I think you're right that it's the better option, especially since I'm very tight on cash right now.

It looks like my thread dried up a little bit, so if I don't get any responses to this post, I'll probably let it go. There are two parts is like to address: THE FINANCING: I discussed these in my previous posts. My question is how to make sure you're comparing apples-to-apples with lenders in terms of fees, etc.? Do you just ask for a GFE from both? I have the lender mentioned previously doing HomePath for $995 and a local bank at 4.25% interest with almost triple the cost. THE OFFER As I mentioned, I submitted highest and best at $56,750 with $1,250 closing costs. They came back and said $56,750, no closing costs. I essentially made the same offer and went down to $55,500, no closing costs. I'm told that they (Fannie Mae) don't offer closing costs assistance anymore. Is that true???

So, I have the following two loan options on this property:

Option 1
15% down (no MI)
5.25% interest rate
$266/month payment

or

Option 2
20% down
4.875% interest rate
$240/month payment

The good ol' HP 10bII is not being good to me this afternoon. The difference in total interest paid over 30 years (assuming I don't pay it off sooner) is $6,535. The down payment savings in moving to 15% down is $2,837.

Which should I choose??

Shane Johnson You're making me want to rescind my offer! Haha. I was really hoping to come in at $48,000 or $50,000, but if this other person is serious about the property, I just can't see taking it down for under $55,000. After crunching some numbers, I felt $56,750 is as high as I could go and feel good about it. There was someone on one of the podcasts a short time ago that was talking about putting in a ridiculous number of offers, some as low as like $1,200 or something like that. Now, THAT'S pretty awesome! I hope I'm not a sucker for putting in highest and best off the bat at the advice of my realtor. He's dealt with this listing agent before in multiple offer situations, and even though they set a deadline for everyone's highest and best and he came in well within that timeframe, they accepted an offer that came in before his and before the cut off because they liked it. I don't want to lose a property over a few thousand bucks because I was messing around at the beginning. Man, I hate multiple offer situations!