All Forum Posts by: Winston Covington

In the early days of my real estate career, I would buy nothing down properties strictly betting on appreciation.  That is called speculation and I had more losers than winners. Properties that have negative cash low are called alligators because they eat up your savings on a monthly basis. Unless you have a way to improve the property to a positive cash flow position, stay away from the alligators.   Save your money and a lot of headaches…focus on positive cash flow properties and you will be a lot better off.

Give your Title company an address and they should be able to give you All the sales within a fair radius of the property.

Hi Syman,

Take a look at Florida and Alabama. Alabama would be better for positive cash flow. 

Financing will be much easier in your name vs an LLC. Check with your CPA and Asset Protection Attorney about transferring title to an LLC. No matter what, since you own other assets…get the Best insurance you can on the new purchase and always maintain an upper end umbrella policy for maximum protection.

Speak to your CPA or Enrolled Agent for the best advice.

1. Most HELOC's come with a variable interest rate which are low now but definitely can and will increase. 2. Cash offers normally do negotiate a better price and shorter escrow period. 3. The holding period for a cash back refinance on an investment property is normally 6 months and has been as long as a year in the past. 4. Your HELOC will definitely be used in your debt to income ratio. 5. You may find that you can only get apprx. 75% loan to value on your cash back refinance. 6. You may be required to have 6 to 12 months liquid reserves for each investment property. 7. Once rented, most banks will only count apprx. 70 % of the rental income which increases your debt ratio. 8. Non owner occupied investment loans come at a higher interest rate and costs than a owner occupied property. 9. When the market begins to move in a negative direction, Banks have been known to freeze and greatly reduce the amount of useable funds in your HELOC. 10. HELOC's can be a great investment tool as long as you use them wisely and understand their limitations.

Hi Renee, fee simple means that you own the land that the modular home sits on. If you don't own the lot, you will be paying the owner of the development a space / lot rental fee.  Those can can come with strict regulations so do your research.

2 tips.   1. Have a thorough foundation inspection done. 2. Stick to where the manufactured home is on fee simple land and not on leased land.  ( If on leased land, the owner of the development may have a clause in the rental agreement where the home needs to be removed when it becomes a certain age ).  Last, long term financing is much easier to get when on a permanent foundation.

Hi Jean, I find that figure to be on the low side. Especially considering that single family homes of similar size in the immediate area are going in the $ 380,000 to $ 400,000 range.

Get an appraisal from a Senior Residential Appraiser and you will have your answer. Your first question is always…what is the highest and best use for the property.