All Forum Posts by: Monte Blackwell

Investment Info:

Small multi-family (2-4 units) buy & hold investment.

Purchase price: $165,000
Cash invested: $13,000

2/2 Duplex in a gated community. Community pool and rents for $850/month

What made you interested in investing in this type of deal?

Buy and Hold.

How did you find this deal and how did you negotiate it?

Market deal used a realtor

How did you finance this deal?

FHA

How did you add value to the deal?

Know whether or not it would cash flow and if it is in a marketable area.

What was the outcome?

Success

Lessons learned? Challenges?

None

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

No

Homestead= 3.5%-5% (live in one unit)

Investment= 20% and very seldom u can find 15% (not living in any units).

Backup Backup plan= try and get the owner to seller finance for 2 years and then you can get conventional financing. He gets all his money within 2yrs and 10% of your money now. 

Not only did I have a 4 plex but it was under an ARM loan talk about fun. Times got tough. So I sectioned them. I knew it wouldn't be forever but 80% of something is better than 100% of nothing and with a note to boot. Anyway, It worked, I got through it and they were never vacant. Suffice to say, they are all rented now and out of the housing arena.

Well, little brother, your asking all the right questions and I admire your tenacity. The truth is, that's exactly what your going to need to get in on your first deal. Don't give up and keep digging. I will tell you that it will be difficult for a lender to buy your deal with no real experience and nothing but sweat equity. 

I would keep digging and maybe find a FSBO that is willing to seller finance an would consider your sweat equity (down payment) as consideration. Maybe 2 years later a lender will buy or refinance that deal. One more thing, lenders will be looking that you stay in the same line of work at least 2 years. Keep your debt ratio down, and credit score high as possible. Plan #2, look for a duplex or 4 plex and try an FHA loan which would let you live in one unit and use the rent from the other units to help qualify you. After a year you can jet and move on somewhere else.

Hang in there, it will come.  

@Jesse Kozazcki How much skin are you willing to come up with in this game? What are you initially offering into this deal? 

I know in Texas there is no requirement to show any paperwork or prove that an animal is a support animal. However, the animal HAS to be disclosed on the contract rendering it null and void. Keep the deposit, tell them to go and if they want to fight it I would give them 3-day demand to move and then file a forcible detainer immediately. Keep the difference and move on. Some will, some won't, So what, NEXT!!

The lender most definitely wants you to have skin in the game and not borrow your very first obligation. Furthermore, your DTI (Debt to Income) will change and could possibly throw the whole deal out the window. Credit to you for thinking out of the box but it won't pass the smell test. 👀

I suggest finding a community social worker that can help with placement. CCAD Community care for the Aged/Disabled will step in and help to find housing. If there is a shortage of money, then by default there will soon be a shortage of food. 

"Man who stand on toilet high on POT" just kidding. 

"Knowledge is Power"