All Forum Posts by: Allan C.

I agree the underwriting doesn't seem correct on this, especially with how competitive Phoenix is. 

In additional to walking the property to gauge living condition, I also suggest you get an estoppel. That will increase odds of owner disclosing tenancy issues. 

After doing your due diligence, you should be more confident in your risk mitigations. At the end of the day, evictions in Phoenix are fairly straight forward and there are strong resources like HHH who can support you if you ever need to evict. 

BP developers:  I like the nested reply feature in thee mobile app, but please don't make us click on each reply link to see all replies.

I'm sure there's a way to consolidate replies while making them all visible. Thanks for the consideration. 

this one seems to be making a lot of noise, huh. Wouldn't be surprised if an OM comes out from this corner. 

there is no letter map of type of neighborhood.  An online crime map will have a heat map of crimes by overall crime, property crime and violent crime. I generally index on overall and violent crime. Greens are A, yellows are B-C, Orange/Red are D-F. But it's all relative. 

Financially, you're on the hook for all the past depreciation and capital gains so you'll need to factor that into the acquisition price. 

Legally, you're on the hook for any past liabilities. 

What is your motivation - property tax savings or low rate loan assumption? How clean and detailed are their books? How long has LLC been in operation?

is this a multi-member LLC or single? Do they have robust OA? Is the loan under the LLC or individual's name?

unless you are a seasoned investor and know how to perform rigorous due diligence, it's likely unwise for you to acquire an LLC. Perform an estimate of how much you expect to save vs how much liability you're taking on.

How long do you plan to stay in Bakersfield? If it's a temporary assignment, I wouldn't be eager to buy a primary there. I'm sure you'll hear varying opinions, but I'm bearish on overall supply / demand of housing in that area. Likely more jobs leaving the area than coming in, which doesn't bode well for assets holding value. 

Ethan, big kudos to you for saving so much this early in your life. You've also got a W2 now with good savings rate, so you seem to have a good head and good hustle. 

You're on the right track, and it's hard to pass up a shortcut. Others gave you good advice, so I'll just reinforce that you should wait another 2 yrs to qualify for a loan with your W2 income. You'll build up more savings during that time and get past the current market volatility. You'll be in a much stronger position to make a better informed decision at that time. 

in the meantime, you can start building up your skills. Learn how do tiling work, light carpentry, drywall, etc. You don't have to do repair work on your own, but contractors can tell if you know anything about repair work just by how you speak. It'll improve your chances of not getting taken advantage of.

also learn how to underwrite investment property cash flows on active listings. Calculate how much you'd pay for a property and then see how much they sell for. Over time you'll get a sense on how to make a competitive offer without overpaying. 

I'll also voice my disagreement with this opinion. It may work for someone who isn't looking to diversify their investment and stay at their property forever. However, all of my analysis show this to be an inferior investment to all other real estate options. 

while I agree impounds are good for lenders to reduce defaults, they are horrible for responsible borrowers. If I have 6 figures of taxes and insurance escrowed at 0% interest I am losing $20k+ of interest income.... and even worse opportunity cost is even more. 

This is a question of what you can afford and how much effort and risk you can tolerate. Highly capitalized people and institutions don't go after C/D class assets. There's a reason and do your research on that reason. 

conversely, people with low capitalization don't pursue A/B class assets since it's tough to scale.