All Forum Posts by: Mark Whittlesey

@J.j. McGuigan 

Correct. Some houses may not qualify for financing at all- FHA or otherwise. So in effect you would be getting a discount because it could not be financed and then "getting paid" for making it financible. It is somewhat of a twist on the highest and best use concept.

Lease up fees seems to be pretty well standard in my area.

The larger lesson is this: PMs will charge what they can get and everything is negotiable.

The leasing fee makes sense to me.

What makes NO sense to me is the annual re-leasing fee. (Tenant is already THERE. So a fee just to get a tenant signature on a new lease?)

What makes even less thatn NO sense are vacancy fees and service call overages.

Again, shop around.

All these are great points. Here is one more: If the end buyer is going to get an FHA loan and the property is not currently financable due to condition then....

@Account Closed 

I agree with Joe. It can be done. I dont think it happens with cash flow/NMD properties only. You will need to marry a couple of different strategies: short term and long term.

You need to be buying under-valued properties below FMV, adding value and then rolling those proceeds into long term holds for income.

For example... buy and fix SFR flips, roll the profits into buy and hold SFR (with mortgages if necessary- but using future flips to aggressively pay down the mortgage).

Or similarly.. buying an under-managed multi, renting it up and re-financing. Then pyramid that cash into future purchases.

I was in a somewhat similar position a few years back. (The HOA was fine but the HOA was suing the builder over picayune "defects").

These are disclosure items. MANY buyers will be turned off and some lenders will not lend. If you really need to sell, it may have to be a cash buyer.

In my case, it got to the point where the only properties for sale in the complex were for sale by government agencies and prices fell by 50%. Then the lawsuit settled and all was right with the world again.

GL

Financing can be a problem. Some lenders will not loan on the non-conforming part. (And some simply won't lend on it at all.)

This. I had to remove some for a sale. Property may not be insurable with them in place.

@Michael Evans 

"You can invest in a new KB Home in West Lancaster with as little as $10K cash if you have the right FICO, Debt-To-Income ratios and Salary."

Is this is a NOO loan? Does it run up against the Fannie/Freddie limits?

A couple of comments and a question.

As a landlord/PM, the lack of application fee should not be a big deal. I mean "application fee" in strictest terms is BS anyway. Fee for what? The piece of paper? Looking over the applicants written in info? Making a couple of phone calls?

Now, credit and background checks are slightly different because those are actual hard costs. But not exactly back breakers. I never charged them anyway although my PM does. Any business that cannot absorb thos modest fees....

Question: What is the remedy for violation? Anyone know?

As has been detailed in the above responses, there are 2 answers:

1) Financially, no it does not make sense to pay it off. Just the reverse. With historically low interest rates, you should be borrowing more and locking in long term.

2) Life- style wise, maybe. It's hard to "lose" a house that is owned free and clear.

Where are you in you life and your investing goals? Only you can decide if #1 or #2 makes more sense for you.