All Forum Posts by: Chris Maurice

@Harjeet Bhatti thanks for this and I wonder why this program isn't talked about more than FHA? Looking briefly, I didn't notice any downside. I did read that it has to be on a primary residence. Does this mean that it I would not have be able to move out after one (1) year similar to the FHA rule.

Hey everyone,

I've talked to a few mortgage lenders who are all telling me that it's basically impossible to do a 5% down conventional loan on a primary residence duplex. They are saying that it is not within the guidelines of I believe Freddie Mac, which is going to require 15% down. Alternatively, they are suggesting an FHA option. Is there anyway around this? My goal would be to kick the mortgage insurance off at 80% LTV, which I understand is not an option on an FHA. Additionally, The up front MI required for the FHA is another downside, which would be over $6000 additional cost for the price range of property that I'm searching for.

Further, from the lenders I’ve talked to, JG Wentworth has been the most impressive as far as rate and apparent service. Does anyone have experience good or bad with them?

Thanks!

The Nashville REIN group has lease agreements available for members. 

Nice, is your other property in Auburn? 

Great work!

@Frank Wong @Dennis

Thanks for the feedback guys and the realism.

I did begin thinking about this type of structure for a deal in my current residence where I rent for $1400 and current market value is $215000. I was thinking about approaching my landlord (who is older and been doing this a while) about this method. I would see the benefit to them being that they get a large downpayment check, interest per annum, and they get near market value (or less assuming realtor fees are skipped).

My thought was how could I extend this to other on-market properties, but you guys have pointed out how this may not be feasible for a number of good reasons.

Hi all!

I’ve been lurking on the forums for a while now, but this is my first post! Glad to meet you all.

Currently, I’m in an expensive market (Nashville) and am looking for strategic methods for making the numbers work on a rental property. The two strategies that I’m contemplating are: 1) skipping realtor and thus the fees for the seller and 2) seller financing.

Typical Deal analysis (obviously pretty terrible):

Property: 3/2.5 with a backyard in a nice part of town with little renovation needed.

Sell price: $400,000

Historic Rent: $2000/month

Mortgage: $1980/ month (30 year, 5% interest, 10% down)

Expenses: $550/month (estimate including maintenance, ins, 10% vacancy, PMI, and taxes)

Cash flow: approx -$682

Alternative deal analysis

Sell price: $375000 (subtracting 6% realtor fee)

Rent: $2000

Mortgage: $1333 (30 year, 2.5% int with 10% down)

Expenses: $350 (same as above without PMI)

Cash flow: approx $120

This second option is not stunning necessarily, but perhaps there is more room to decrease the sell price and increase the margin.

To me using seller financing benefits the seller as they are now receiving interest payments and get the total sell cost that they want for the house. The questions, then, are how could I present this to a seller effectively to where we both agree that it’s mutually beneficial and is this a reasonable strategy in hot markets where house prices are far outpacing rents (we are obviously no where near the 1% rule)? The biggest prohibition here seems to be gaining the trust to carry the financing and be willing to negotiate an interest rate below market value let’s say such that the rental numbers work.

Thanks for any input!