All Forum Posts by: Wade G.

In 2012 I sold a house by way of owner financing with a seven year balloon.  The buyers are now refinancing with a bank and paying me off.  The title company wants to know the payoff amount which is easy enough to see with the loan amortization table.  Other question they ask is what is the daily per diem during the pay off month.  I can't get my mind around this for some reason.  I think the daily per diem should be calculated only from the interest portion of the loan for the month...or should it be calculated from the interest portion as well as the principal?

Can anyone recommend a good contractor to refinish wood floors in the Houston area?

I may have the option to purchase a steel house for the purpose of flipping. The structure is steel, and the outside is brick, but where wood would normally be used as siding there are large steel panels. Really not sure about it because steel houses are not the norm in my area and its an old house built in 1952. It's an outlier in the neighborhood because all the other houses are the typical wood frame brick house. It looks like the other houses in regards to style but its steel rather than wood. You wouldn't know it was steel by looking at it from the outside. A quick analysis says the ARV is about 100k. The land value is about 30k. Its a small 1050 sq. ft. 3/2/2. I really don't even think this the house is worth paying land value for as it is now because it does need major rehab...and I do mean major. I have not even figured out hard numbers on rehab yet because I'm deciding on the whole steel issue. I don't really think it is a selling point but then again maybe it is and I just don't know about it since its not normal around here. Anyone had any experience selling a steel house?

Yes, use hard money to purchase property then after repairs refi into conventional loan.  It took me a long time to accept the concept but I'm glad I did.  Also once you get above 4 mortgages, or maybe it's 5, I can't recall, banks will require 25% down instead of 20%.  If your goal is to actually pay off your rental then hard money may not be the route to go but if you plan to keep them financed then it may be an idea to look into.

If it was me I would not base rents off $1600 month, seems like around $1400 - $1500 may be a good average.  I think your insurance should be based on about $150 month and taxes about $300 or more (HCAD is very aggressive right now).  Rates for investment properties are probably going to be more around the mid to high 4% range.

Also, you may want to consider using hard money rather than putting 20% down.  Some people are not comfortable with hard money but it really conserves your funds.  The last deal I did last May would have had me out of pocket around 39k but since I used hard money I was only out of pocket around 9k.  

One more thing is flood insurance.  I would not sleep well at night without it in this area.  That will be about $500 per year for minimal coverage.

I'm upgrading a rental with granite kitchen countertops.  Anyone in Houston offer a recommendation?

Well the attorney was not sure how to handle this issue.  Surely someone has run into this before.

If I buy a house with seller financing and with a wrap around the seller's current mortgage, how is the seller's original escrow account handled by the seller?  I doubt they can opt out of escrow without paying a fee but I guess the seller would own the loan and not the house.  Should the seller just call the mortgage company and tell them she sold the house?  Then I would give her a copy of my insurance showing her mortgage company is the first lienholder and she the second?  Then the insurance would provide that to the mortgage company.

With the aid of an attorney she is going to owner finance the house to me with a wrap around her current mortgage.  I know all about the due on sale clause.  I actually sold one of my rentals a few years ago with a wrap around my mortgage.  If for some reason I cannot sell the house, for the price I think I can get according to comps, I will rent it out.  After seasoning for six months I will probably get my own permanent financing. 

A little more to the story is the lady is going blind and that is why she does not want to list it.  She does not want strangers that she cannot see going in her house.  She is selling and moving in with her kids.  She has known my dad for several years and she trusts him and has extended that trust to me.  So I really want to make sure it is a win win.

if I buy an investment property owner financed with a wrap around the original mortgage do I have to put down 20% if I refi with a conventional mortgage at a later date? The LTV would be less than 80%. It would be a conventional investment loan.