All Forum Posts by: Brian Tome

That is a great choice LaShawn!  I don't personally know Fortune Builders, but generally speaking anything a guru program claims they can teach, you can learn on Bigger Pockets with a little time invested posting, reading the forums, and listening to the podcasts...all for free!

@Aj Bowman

You should check with your County Building Inspector's Office, but generally the well volume and septic drain field size is determined by the number of bedrooms a home has, so if you add one the old well and septic will have to be large enough to handle it.  While a small house may have a corresponding shallow well and small drain field because that is all that was required at the time, my experience is that most older homes were built by men who foresaw the potential for additions to the living space and dug the well and installed the drain fields with an eye toward future expansion.

To be safe, a trip to the Building Inspector's Office and County Health Department (to test well quality and review any history of non-compliance) will be a minimal time investment to help you determine your rehab costs.

P.S. - Maryland now has a BAT septic requirement that you can read about here -

http://mde.maryland.gov/programs/water/bayrestorationfund/onsitedisposalsystems/pages/water/cbwrf/index.aspx If you have to install a new system or expand the old, it will have to be brought up to code and that is a significant expense.

Welcome to BP @Brian Holland!

Start analyzing deals, tell everyone what your plan is, and make offers when you find a possible deal.  Take action and before you know it you will be on your way!

Welcome to BP @Sam Avadhi!

Happy hunting!

Bankruptcy is nothing more than a process whereby a debtor's assets are sold and the proceeds distributed to his/her creditors (assuming it is a liquidation vs. a reorganization).  A trustee/receiver is appointed to review and approve the sale of any real or personal property subject to seizure under the code provisions and will make recommendations which the court will usually approve.  It can take a lot of time for a trustee to assess the value of an offer and form an opinion.  It can also take time for the court to approve the trustee's recommendations.

I am sure @Ned Careyrecommends only making an offer if you are sure you can close and not assigning the deal because you could cause serious delay and inconvenience to the court and the debtor if you make an offer that doesn't close very soon after the deal is approved.  Therefore, a good reputation, a cash offer with no contingencies supported by proof of funds, and a quick closing date will make your offer much more attractive.

As far as the price, the trustee and court will likely approve significant loss on the asset if the secured lender approves it.  When there is no equity in a property, the only debtor that will be effected by its disposal at below market value will be the secured lender, and they are often times more motivated by external market conditions and available money.  In other words, a bank or mortgage lender will sometimes approve a ridiculously priced deal because they need the cash on deposit for a purpose that is totally unrelated to the property or the debtor.

No matter how this deal goes, I wish you the very best of luck @Eric H.!

@Luke Coale

That sounds like a great plan!  Kudos to you for thinking it through and determining to start early and aggressive.  Your future is bright and I know BP will be a better place for your involvement.

Feel free to connect if I can be of any assistance to you.

BP Members,

I am looking for a Bridge Loan/Hard Money Loan to finance my purchase of a rehab property that I will move into and refinance as soon as it will pass a conventional financing inspection.  Our current plan is to purchase the house with hard money/private money, sell our current home, use the proceeds to rehab and pay down the loan and rehab the remainder. 

Our current home is worth @$350K with $175K owed. Target property is REO in need of kitchen and interior cosmetics that I think we can get for @$350K and fully rehab for $50K with an ARV of @$510K. Looking for a 1 year with balloon for a decent rate. That should give us plenty of time to renovate and refinance.

Our end goal will be to live in it for at least two years and further improve the property so we can realize the increased value without tax liabilities.

Thanks!

@Jamal Okon sounds like you are going in with your eyes open, so best of luck on your project.

Whatever the outcome, you should post the particulars in the success stories/cautionary tales forum.  That way other investors can benefit from your experience ... and I hope it will be all good!

@Jessica Stiner, @Jeffrey Giffin, and @Dottie Bee,

I would love to join you and don't have a preference on location.  Wilmington, Newark, or Middletown all work well for me.

Thanks!

@Jamal Okon

Sounds awfully ambitious to me my friend. First, I don't know Baltimore, but if the project is going to make money I doubt you will find and "grant money". Grants are usually designed to promote some type of broader social utility (i.e. give impoverished people a leg up, promote revitalization, etc.) Most of those goals are met by homeownership, not rental property acquisition. Again, I am thinking out loud and if anyone feels differently, please correct me. Few communities wish to promote more rentals or even the rehab of rentals. They would rather see rentals torn down and SFR built. Plus, everyone knows you will make money on the deal so they expect you to do it in the deal rather than rely on a grant/subsidy.

That being said, if you get the property under contract at a good enough price to make it beneficial to you, you will have a deal you can shop to someone else.  If it really is a good deal, there are investors out there who will give you money for a piece of it.  If you are worrying about sharing some of your deal, well insert @Brandon Turner's favorite line here - "50% of a good deal is better than 100% of no deal."

However, since it is a 4-plex, if you plan to occupy one of the units you could use conventional financing (although for rehab you will need a 203K loan or similar).  There is a great section on this in Brandon's book "The Book on Investing in Real Estate with No (and Low) Money Down."

Before you get to the squatters, appreciate the value of 1 bedroom units in the area.  In most locations, 1 bedroom units experience high turn over and it is hard to find reliable tenants.  So be very careful when you are figuring your operating expenses and be conservative with vacancy rates.

If you decide to move forward, either get the seller to evict the squatters, or build in enough cushion to pay the squatters to go.  However, understand that as soon as you pay a squatter to leave you encourage others to try and slip in so they can get a pay day too.  So you will want to make sure you can build a case for trespassing against people who enter after acquisition (and maybe malicious destruction of property or burglary).  Before you offer to pay squatters to leave, make sure the other units are secure.  If they accept, make the squatters take all their stuff, and as soon as they are out the door, secure their units by changing locks, padlocking doors, posting no trespassing signs, documenting your measures with photos, and the next time you find someone there, call the police. 

Overall, it sounds like a really big project so be very careful and good luck!  All the resources and contacts you need to make the best possible moves are right here on Bigger Pockets!