All Forum Posts by: William H.

Hey, So I just saw this post. But I recently was trying to figure out a solution that appears to be a pretty common problem. I came up with two options that I liked. I started thinking about all of this towards the end of a flip that I was doing and I didn't actually buy the camera that I am about to mention, but I do plan to. 

So for outside cameras I like the concept of the Arlo camera from Netgear. If you are a Verizon customer you can add it to a line for like $10 bucks a month, and disconnect the service when not using it. It works like any other wifi camera that normally needs wifi, except its a 4g LTE camera, so it just uses cell signal. Netgear offers a plan for users not with Verizon also. They also make wifi cameras and a DVR system if you want that also. They also make a solar panel charger and camo for these cameras so you could mount them in a tree and view them anytime.  Here is the link: 

https://www.verizonwireless.com/connected-devices/...

As for Wifi cameras I like the YI home cameras that you can get on Amazon. They start around $40 bucks and work great. I would say that they are just as good as the nest cams for a fraction of the price (but I never owned a nest came). They use micro sd cards for recording, but you can purchase cloud storage. The problem with these is the internet and the fact that someone could just steal them. However, to solve the internet problem I did think about just getting a hotspot device through my wireless company.

All in all, I like the concept of the Arlo Cam. But depending on how many you need. They are pricey. 

I am currently looking at a deal in my area that is FSBO and the current owner has a tenant in place that is paying below market rent. The tenant is paying month to month and there is no lease in place according to the owner. The price for the house is good (not great, but good) but the owner says that he won't ask the tenant to leave, and that it will be the responsibility of the new owner. Sounds to me like they know that it will be a problem. I want to buy this property to flip, so I have no interest in creating a lease with current tenant.

I have never had to evict someone, assuming I were to buy the place, what can I expect to have to go through to get this person out? I would try the cash for keys route, but I am trying to plan for the worst. 

The property is In GA. 

@luis fernandez 

@timoteo guy 

I live in Savannah,  if yall need some boots on the ground let me know. As far as bang for buck there are some 4 plexs currently that would gross about $2400 easily,  and they are going for around 175ish. Thats a coc return of 11.25 on your 35k. Assuming 50% for expenses anyway. 

@Curtis Bellenot @Shawn McKee

Or anyone for that matter. I am in Savannah and would love to meet some like minded thinkers. Let me know if anyone is interested.

@Eli Kallison did you find a property?

I just happen to stumble on to what I thought was a ok deal. In my area there are not a whole lot of multi unit places. Some downtown in the historic district, but they normally are pretty expensive. This four plex in the middle of town, near just about everything business wise. As far as comps their is one other area that is nearby that is just four plexs. There were 3 sales in that area (162,500 - 162,500 and 180,000) and two that are currently "pending" that were listed at $179,000 and $188,000. I didn't like these buildings because after requesting the info on the rents and the expenses I realized that the city didn't provide the trash service, and the owners of 2 units were splitting a dumpster and I think the yearly cost there was $2300. So I didn't like that, and I didn't like that if the other owner decided that he didn't want to do that anymore I would have to pay the whole amount. I mention that because I would rate that area and the building the same as the one that i am looking at currently except that the trash is picked up by the city as part of the tenant paid for water bill.

I thought that the 4 unit place, for the price was a good buy because it puts each unit around 38k each and while this is not exactly the place that i would want to live, its better than the area where the $38k houses are. However, after reading some others talk about the downsides of their 4 plex buildings I am starting to have second thoughts.

This would be my first place that i am buying to just rent out. So let me know your thoughts.

Also, 3 a/c units were replaced when the current owner bought the place about 12 years ago, and 1 was replaced about a year ago, and the roof was replaced 5 years ago. I based my current rents at $600 x 4. However, the owner says that he is going to $650 as he has turnover. So I believe two are at 600 and two at 650. Also, one tenant that has been there the longest (12 years) has paid the $40 late fee every month, I think that she gets a check later than the 1st is the reason here, and I think the thing to do is to just go to $650 and change her due date. As far as the utilities, everything is tenant paid. And the tax and insurance (new policy quote) is $5100 a year.

Price $155,000 (this is what the tax assessor has the build at, which is normally low)

Down Payment $40,000

Mortgage $1069 (P,I,T,I)

Rent $2400

Cash Flow - $1331

I then took off 25% for vacancies and expenses as I would be managing myself. So $1331-$480= $851. 

So in my head this sounds pretty good, not so much if you do 50% instead of 25%. Thoughts?

So yeah we're currently at me carrying the note untill they can get financing. To the point of advertising it I was just looking to sell, but the best offer so far is this one, i mean sure i could drop the price $5000 pay realtor commisions and all of that, or the current terms $175k down, and 12% interest on the $105,000 on a 5 year note, with no early payoff penalty.  Wasn't my original plan, but not a bad deal either. 

I also agree and plan to do the homework on them as stated above, I think that will be pretty easy since they have that info with a local lender that just needs the 2 year tax returns, as for being able to pay, they have been renting for 1400 a month for 3 years, so that should work. 

@Roman M.

@Curt Smith

Considering this would be my first deal providing financing, do I still need to do all of the same steps? I can change the term, but all of the other stuff, while good to do, doesn't seem necessary for this deal. This is what I am talking about, unless I am missing something:  . 

The first exception, a seller-financier who extends credit to a buyer as defined above, secured by a mortgage encumbering a residential dwelling, is not considered a “loan originator” if:

(a) they are a natural person, estate, or trust;
(b) they provide financing for only one property in a twelve month period;
(c) they own the property securing the financing;
(d) they did not construct or act as the contractor for the construction of a residence on the property;
(e) the financing must have a repayment schedule that does not result in a negative amortization;
(f) balloon payments are allowed (not less than 5 years recommended to be conservative; however, there is apparently a two-year window, and after two years this allowance may terminate);
(g) the financing must have a fixed rate or an adjustable rate that resets after five or more years, and there are restrictions, limitations, and caps on rate changes and lifetime caps of rates; and lastly,
(h) the seller does not have to vet the borrowers or determine the borrower’s ability to repay.

As far as finding a stronger buyer, sure if one shows up great, I just like to work with what I have at the time. I also like the idea of getting full price and no repairs and/or commissions to a realtor if I don't have to. At the 5% yeah it wasn't worth it, but at say 12% I can make that work, because I would be buying another house with the money anyway, and I can do that after they get their financing. 

@Roman M. I'm with you. I said the same thing, but my accountant says by taking that 1st position on the note that I am changing it from a homestead to a investment. 

And so here is another option, although maybe not traditional, what about a lease option with a non refundable $170,000 move in fee and a option to buy at $105,000. I mean that would be incentive enough to not back out down the road.

Ok new problems... I talked to her and basically came up with carrying back the $105,000 in monthly payments of $1100 (the $1100 being interest only) and doing a balloon or new terms after 2 years, because the idea is for her to get financing in 6 months to a year. The problem is if I were to sell the house today, assuming the same numbers,  the equity ($105k) wouldn't be taxed since this was my primary house for the last 8 years. If i sell and carry back that equity, however, and go over a year its now a investment property, and when she does the final pay off of the $105,000 it would be taxed. 

So I guess I could do a lease purchase. What I worry with that is say 6 months from now they like something else and don't want to buy anymore. I'd again, just like to sell it.

My other thought is like someone mentioned, delay the sale and lease to them for 6-12 months but again I am delaying the sale, and the down payment wouldn't be available till closing and there is that option to back out. 

Any Insight on this? Other than finding a new buyer, I mean I currently have others viewing the place so another offer could change things, but I admit with this person it would be without commissions and closing cost and for full price so I would like to figure out a way to make it work. 

Thanks again for the help.