All Forum Posts by: Account Closed

Yes, let the rep assigned to you from auction.com know you've got your own title company.  He/she can then revise the contract to add their name.  They should be able to revise it quickly.

In my experience, yes. I've purchased 2 properties through auction.com and have used my own title company for title insurance and to do the actual close. It should state on the property listing page buyer has the right to purchase their own title insurance if it does not delay closing.  Just know you will be required to work with the title company that represents the bank as well. So your title company will partner with theirs to facilitate the close. After you win the auction, you will wire 5% of the winning bid to the bank's title company (not yours) and you will be credited that amount at closing.

It's confusing and a slight hassle but that's the price to pay for getting a great deal at auction!

I will add to the pile on... if you only have 2 years left, get the degree. Yes, your last 2 years are the hardest because you are diving deeper into business/finance classes but in my opinion are the most valuable. As everyone has stated, you will most likely (at some point) need a W-2 job and hate to say it, but a degree will open more doors depending on industry. In my field a degree is mandatory.

#mytwocents

@Tony Castronovo thanks...appreciate the offer and will PM you.

Hi @Tony Castronovo - yes, have a reliable team in Houston that I've built over the last year.  A good general contractor, flooring contractor, landscaper, HVAC, etc. and I use a property manager to manage all the properties.  I work closely with a realtor as well.  I travel to Houston about 3-4 times a year and typically walk the properties with my contractor before work begins.

Sounds like we are on the same path regarding building the portfolio and preserving cash. Honestly, I probably would've used a HML for the first 3 and refi'd those vs. the way I acquired them traditionally with 25% down.

@Mike F. yes you are correct, the downside is you are paying double closing costs (HML then conventional financing). I purchased these 2 properties at auction, so I had to use HML since it's considered same as cash and closing is under 30 days.

It still works for me because I am coming to the table with less cash upfront than if I were purchasing with a conventional lender putting 20-25% down and paying for all of rehab out of pocket.

Thanks for the post @Tony Castronovo. I'm closing on property #7 in the Houston area and for the last 2, have used an identical approach. HML to close quick (same as cash) then refi into a conventional lender, paying off HML as soon as possible. I'm using Sherman Bridge and they do require a separate escrow account with the rehab amount. I pay for the rehabs out of my own pocket, then request one draw upon completion.

So far, so good and you're right, it's not a 'real' BRRRR deal but I was looking for a way to bring less cash upfront vs. what I had been doing on the first few properties...20-25% down using conventional financing plus paying for all rehab costs. The deals in Houston are there, but not sure BRRRRs are there unless you are willing to buy in class C or D neighborhoods. I haven't seen anything worthwhile for under $125K in the areas I'm looking.

Thanks for detailing your numbers @Nicholas Lohr and highlighting the critical points to be aware of: ARV and rehab costs. Another important point is that your property is still cash flowing $1K per month after you went from an original $155K loan to a new $245K loan. That's one detail that is often overlooked in the majority of bp BRRRR posts.

@Brian Garrett contractors should not charge to walk the property and provide an estimate.

Thanks @Karl Dugal for posting.  I'm in a similar situation in that I had two properties last year I was desperate to get tenants in, so accepted a lower amount. Now I will increase rents to current market value (in my TX market, it's only about $50-$75/mo increase). Tenants have been good for most part and like the properties, so I don't anticipate they will vacate.  I am giving them 60-90 days' notice.

@Thomas S. thanks for the reminder and words of wisdom!  Keep raising that rent slightly every year to keep market rates current, and at the same time your tenants will come to expect the increases.

Thanks @Jenni Moore for this post and sharing your info.  I'm with you, haven't had success yet with auction.com and agree it is a waiting game.  I have about 10 properties saved to my watch list, see them not hit their reserve and come back to auction a day later, only to not hit the reserve during that 3-day auction, come back, rinse and repeat. The final bid amounts are way overpriced and do not make financial sense, but are still not hitting the high reserve.

Reading other posts here, I tried my luck at pre-bidding before some properties went to auction.  Still no luck. Example: property starting bid $35K with $10K increments, I pre-bid $120K as best/final bid. A day later it was rejected and I was invited to submit another pre-bid or wait for auction. I declined but will see what happens at auction.

Regarding the title questions on this thread, I have a title company I'm working with and they will do preliminary (quick) title searches and provide title insurance. I'd recommend doing that as well.

Last topic - I'm using hard money lender which auction.com considers same as cash. The only issue is HML needs access to the interior property for an appraisal, which could be challenging as most of these properties are advertised as occupied. Haven't figured out that yet but will deal with it when/if I do finally purchase a property from auction.com.