1st time buyer program to Buy single family
Investment Info:
Single-family residence other investment in San Bernardino.
Purchase price: $245,000
Cash invested: $6,000
As a 1st time buyer, I qualified for down payment assistance.
What made you interested in investing in this type of deal?
I didn't have to put a down payment only closing cost
How did you find this deal and how did you negotiate it?
online, I used a realtor to close the deal but I ran my own numbers
How did you finance this deal?
Calhafa Downpayment assistant
How did you add value to the deal?
$245,000 comps are now in the $330,000 and rising. The home is a 4-bed room 2 bath
What was the outcome?
I'm currently renting the home out with the option to buy, once I sell I will buy 3 units
Lessons learned? Challenges?
shortly after buying the house I need a new roof, inspection is very important.
Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?
Real Estate agent, and lender
Congratulations! It appears you didn’t have to owner occupy with this first time buyer assistance program, which is surprising, unless you did so prior to renting it out.
@Malika Boudreaux
Dittos on Lydia's point. My take-aways on 2 other points:
1) Lease Option tenant buyer (TB): Curious if you are familiar with Dodd-Frank legislation on these types of transactions. If not, before you do another, you should get very familiar with them. Use a real estate attorney on at least one of these to protect yourself and learn. In a hot market, which we are and have been in, depending on the terms of your lease option deal, if prices back up and your tenant buyer cannot qualify in, say 2-3 years, and their is any equity in the deal for the TB and especially if they have paid you 2-5% as a "deposit" or "down-payment", this is a red flag, which could result in a lawsuit. Also, did the TB have the property inspected and appraised? If not, two more red flags. Did you file the appropriate paperwork with the county of record? If not, between the recorder and assessor's offices, two more red flags.
2) Buyer's Agent Realtor: Assuming you used the Realtor mentioned as your Buyer's Agent (formal Buyer Agency Agreement between you and him or her), did they not strongly suggest that you have the property professionally inspected to learn about the need for a new roof? If not, as you now know, this is a massive oops! In Colorado, regardless of age of property, we always hire pros to do general inspections, separate roof inspection, separate HVAC inspection, separate Radon inspection and separate sewer scope inspection. This way, during the inspection period of the contract, we can re-negotiate as needed to account for the big items and any safety-related issues that turn up.
Food for thought. Best of luck.
I did live in the property for 1 year but in all that time no one came to my door checking. I refinanced to a 3.2 interest rate and the bank is ok with me renting it out.
I'm familiar with Dodd-Frank, I'm not asking for a large down payment only 1st and last months rent, Nor I'm asking for anything over the rent each month. They have 24 months to Buy the home for a price we have agreed on, (fair market) I'm not here to take advantage of anyone. Of course, they can inspect the property, it will still need to qualify for the bank loan. The house was fully remodeled with a new roof. They don't have to buy the house at the end of the term, I just want a better quality of tenants who are less likely to destroy my place if they have the option to buy. They have 24months to get a loan for a beautiful home that they get to rent 1st. It has worked great in the 3 years almost 4years I have had the home, no damage the tenants just move out and don't flex the option. In California, you can charge up 3x times the rent for deposit and once they move out they get every penny back.
Yes, only the banks can make money by charging people interest.