All Forum Posts by: Chris Wakley

Great advice Bjorn. Thank you for your response. His reason was to "concentrate on the Pittsburgh market." 

 Right, but my whole attraction of this property was to avoid the conventional route. So I would be okay with the rate being a touch higher.

I have excellent credit. My loans for my other properties are 3.25% and 5.00%, but those are through FHA and Conventional bank loans. So just to clarify, you are saying that on average right now seller financing loans are around 5.5%?

I haven't made up my mind, I guess I am just rooting for one outcome over the other but so far everyone has said not to do the deal. 

 I thought the interest rate he proposed was quite fair (6.5%). I could be wrong as I am still new to the game. I know it's overpriced...but it goes back to the question.."Does it make you money?" and if it does, it might not be a bad deal for me. 

 That's a really good idea. I appreciate the advice.

@Caleb Heimsoth I pursued it because it cash flowed about $236/month AND I could get my feet wet with a seller financed deal. Avoiding the typical bank loan is/was very appealing to me. I figured it would be a quick way to get another cash flowing unit with little money down. 

@Raul R. Thank you for the response. You bring up good points. I had a very good feeling about him being a genuinely helpful person but I agree that is always a possibility that it's all an act. 

Hey BP - 

I'm really struggling with a potential deal I have going right now and need some opinions. I will try to make the story as short as possible. Quick background on me: I have 5 units total (I am house hacking a flat and have a triplex) so I am hardly what you would call a seasoned investor. Anyways, I found a flat on Craigslist (I'm in Erie, PA) which advertised seller financing which intrigued me. I reached out to the seller and set up an appointment to view the property. Afterwards, we sat down at a local McDonald's to talk turkey. We talked for about 2 hours and I quickly realized this guy would be a PERFECT mentor. He was very gracious with his time and answered all of my questions and he even revealed that he was previously a board member of the local apartment association (of Northwestern PA). I was so stoked to meet and talk with him. Towards the end, I told him that I wanted to pursue the property. He basically told me what he would do for me (finance it at 6.5%) and I would need the typical down payment. He walked thru the numbers with me to show me it cash flowed. It felt like he didn't even give me the opportunity to negotiate the terms (I'm def. okay with the interest rate but the property is overpriced for the neighborhood). 

I understand he is a professional and obviously very good at what he does. I also understand that it COULD cash flow, if it was a perfect world (needs a lot of work/repairs), so it might not necessarily be a BAD deal for me. BUT today I go to get the inspection, and there are a ton of issues AND I find a few holes in his story (for example, he said the tenants pay the water bill - talked to the tenant, not true). To be honest, if he doesn't work with me on the inspection items, there's no way I would do the deal normally. I will say this tho, he has ALREADY provided an immense amount of value to me (for example he gave me the addendums he uses in his lease and some of the strategies he uses to maximize his profits) and much more.  He has even said that he would be open to throwing me deals in the future. I've only known him for a week but he's already helped me take care of a situation that I have not dealt with before (tenant in prison). 

My question to BP is - This is a guy who could be HUGE for me as I am so early on in my investing career. Is it worth it to take on a less than average deal in order to maintain a good relationship with this guy? Should I risk losing his friendship/mentorship because I back out of an average deal? 

Hope this isn't a dumb question, just really need some help! 

Is there anyone from BP nation and in the Erie area that will be attending the Erie county judicial tax sale? I would love to go just to see what's all about and learn from someone experienced. 

Wow! Lot of young investors making moves in Erie, PA! Just wanted to throw my name into the hat as well. Have lots of questions about investing in Erie, would love to meet up and chat too! 

I'm not exactly qualified to give you a professional opinion on this but I would tell you to make sure you screen your tenants very carefully. Make sure you don't just rent to the first person that comes along unless they fit your criteria. I currently rent to 3 Gannon students and they are GREAT. I charge them fair market rent (not higher bc they are students). It's a 3 br in downtown erie I charge $650/month. 

They pay Gas/Electric and yes the gas bill can be very high during the cold months. I would 100% recommend at least putting the gas/electric in their names so they don't take advantage of you. 

Renter's insurance is always a good idea and some Landlords even make it mandatory on their lease. 

I do not know of any property managers in the area but I haven't looked as I only have one property right now. 

I would also highly recommend checking out The Book on Managing Rental Properties by Brandon Turner. Incredible book.