All Forum Posts by: Wilson Bunton

@Julia Dugger PM Sent

@Mark Gallagher  Thanks, I thought that is all it would be.  If I end up being able to get this house I may end up having an attorney settle all this for me anyhow.  I just like to have a knowledge of everything being done.

@Mark Gallagher PM Sent

@Mark Gallagher  I figured that I could do that, but me being the person that hates to spend money on something that I can easily do myself was looking for an alternative.

@Mark Gallagher @Julia Dugger  I called Fannie Mae to try to figure out what was going on and the best thing they could tell me was to submit another offer and that they can decline the offers for any reason.  One person I spoke with did somewhat mention that if a house needed extensive repairs then they may believe that it may not be possible to occupy the house within 60 days, the requirement for owner occupancy.  My issue with this is how can they establish that I wouldn't be able to occupy in 60 days.  No matter the amount of work needed, one could potentially have crews working there 24 hours a day and get immense amounts of work done in 60 days.

The offer was submitted no problem, they did ask for a higher and best, so we gave them that.  then they responded saying they declined the offer and are going to wait until the first look period is over so they can accept investor offers.

Hello all,

So here's the situation, my wife and I have found a home that we would like to occupy and do a sort of live in flip, however we fully intend to live in the house for at least the next 2 years.

The home is a Fannie Mae Homepath property that is still in the FirstLook program.  We submitted an offer last Tuesday for 3 grand more than its listed for and certified that we would be owner occupants.  We waited and waited to hear back on it figuring we had a good chance since it was in the FirstLook period and we were above list.  However, today I get a message from my agent and he tells me that they declined our offer and are waiting for the investor period to open before entertaining any other offers.

This seems counterintuitive to the homepath mission.  Why even have the FirstLook period if they're still going to wait for investor offers.

I fully intend to call Fannie Mae tomorrow morning and report this, but wasn't sure if anyone else has experience dealing with this issue.

Hello all,

I have found a property that I would like to purchase, the house has a purchase price of $100,000.  The house is a homepath house and because of the condition the property is in Fannie Mae is only accepting cash or 203k offers.  Since I plan to do the rehab work myself or at least perform as my own general contractor, I do not want to do a 203k loan and want to purchase the house cash.  Seeing as I do not have that amount of cash on hand I am going to get money from a private lender.

My lender is willing to lend me 80% ($80,000) at 7% interest amortized over 30 years.  My question is how do I structure all of this to protect the lender and myself the most.  I understand that I need to draft a note and a mortgage.  Once those are drafted do I just take them to the county recorder and have them filed there?  If it makes a difference the house is located in Toledo, Ohio.

Thanks for any advice you may have.

Bill,

That seems like an ok deal.  I would caution you to take be sure that you are not missing other costs.  

I ran a few numbers on it and with that rent against that purchase price, you'd be at 1.37%, not meeting the 2% rule, but that is seemingly hard to find in today's market.

With the numbers you gave you should cashflow around $250 per month.  This is pretty good, however not including management costs is not a great idea even if you are self managing.  It's always a good idea to include those costs in the event that in the future that you may want to have it managed for you and just to be able to pay yourself for your time now.

Without knowing the age and condition of the building it is hard to say if those Capex and repair numbers are accurate, so you may need to build in more buffer for that if it is an older structure with any deferred maintenance.

Also, would the tenant pay all utilities?  If not that will cut into cashflow.  Think about lawn and snow service too.  How/who will pay for that service?  Typically at the multifamily level that is paid by the landlord.

All that being said the deal may make a lot of sense for you to make a jump into investing and the house hacking strategy is a great start.

I did to have the thought of it making its way into the street, but this property is on a street that is only one car width wide, so if it did make it onto the street it would need to make itself quite a ways down to the next road, to not block all other traffic.