All Forum Posts by: Dan Mann

@Angelea Weihs I think you're fighting an uphill battle.  I agree with the above statements about minimum risk for your grandmother.  Out of the 200K, I would save out 6 month expenses for your grandmother.  Then with what you have left subtract 10-12% for costs associated with getting a property.  I think at that point the amount that you would need for a return would be extremely high.

While there are situations where it might be possible, keep in mind your passion is going to pay the bills and your inexperience is a concern.  

Unfortunately, you would need to get it right the first time.  

I agree with @Russell Brazil in that there is no motivation for the banks to call the mortgage due when the payments are being met and the interest is low, but once they go back up they MAY want to capitalize on collecting higher interest rates.

@Joseph Hoot I just happened to be listening to podcast 49 with @Amanda Han (CPA), her thoughts were there is no need for a LLC on passive income (rental income) if you only have a few assets. She recommended a LLC for active income such as wholesaling or flipping, because of tax advantages present with active income. I'm neither an attorney or CPA and your situation is different, but you may gain a better understanding listening to this podcast.

@Polina Kin what am I miss understanding?  Are you saying you can't locate the grantor (owner)?

I went to http://revco.mc-ala.org/ a site (click on property tax left side) which lets you search for property in Montgomery Alabama.  I did a random search of a street name and it pulled up several properties. Once I selected a property I could select a tax year and see the address of the person paying taxes.  I would think this would be a starting point to locate the owner if the person isn't listed on the deed.

Welcome to the Spokane market.

@Account Closed if you are going to purchase a property off the MLS you will be dealing with a selling agent who can help you. Whether you have a buyers agent is a different discussion. The selling agent will have the forms you need.

If you are buying directly from the owner once you come to agreement with the seller contact a title company here in Washington.  For a real estate offer to be binding it has to be written.  Once you contact the title company they will provide the forms you need.

Believe it or not you aren't the first person to buy a property and there are others who are experienced and do this everyday who will help you.

That is all you need for a purchase.  Keep in mind many of the documentation on this site and/or the internet aren't the best for Washington.  The people I mentioned above will have standardized forms.  

If you want to evaluate a deal then there are forms on here that can assist you.  The forms I would look for on here would be a check list for properties so when you are walking through a property you are reminded of things to look at and take notes.  Since I like numbers I'd run the numbers through one of the calculators on this site or a spreadsheet you can get from this site.  

I'm new here, but I've bought and sold several personal residences.  I have not purchased an investment property yet. (This is my general disclaimer.)

Here is the approach I'm using now.

Locate a property

Run it through an evaulation (proforma sheet, calculator).  These are general numbers what is the average rent, how much rehab (I heard the other day a rough estimate is in $5,000 increments, I think it was on here), and property price.

Look at the property. Some people here will make an offer without seeing it to check on the seller’s motivation.

Either revaluate with new numbers or make offer. No paperwork needs to be filled out at this time.

If you come to a price then either the selling real estate agent or title company will provide you with the forms you need. In my experience the title company will provide you with offer agreement form for the purchase. Also contact your loan provider and provide them the information they need to get started.

At this point I assume you are going to have inspections and appraisals done.

When it is all done all the forms you need are going to be provided for you.

Now all this works for a straight forward purchase whether you are going to hold it or flip. If you are doing a more complex transaction then you may want to involve an attorney or find an experienced mentor in that particular area.

Best of luck.

Did you include closing costs such as loan origination fee and title insurance in your purchase price.  

Your repair, cap ex and vacancy levels are lower than what I use, but you know the area and the property.

@William Newman was your line of credit based off your income or investment property.

I'm confused by the OP wanting to get a HELOC, I was under the impression you couldn't get one of those from investment property only your primary residence.

When I hear the term "cash secured line of credit" I think of something similar to a credit card where you deposit say $500 in a bank and then you have a $500 credit limit.  Since this wouldn't be difficult to obtain, I must be wrong.

I look forward to learning what I'm missing.

@Kevin Hunter I'd double check your numbers.  At a quick glance your management fees should be $540 and not 450.  If you use $450 that's 6% of 7,500 (10 units).

When I look at expenses and income I can't get my numbers to match yours, but I'm just trying to do it off the cuff and I'm not spending the time to recalculate all your numbers.  

I'm new here so keep this in mind.  You may have some equity if you can get it appraised at 230 and you paid 188.  What I've gleaned from this site is there may have be a period of six months to a year before you could refinance.

If you are able to refinance you should be able to use the money you draw out to put down on a new property.  I believe you will have to qualify for the new higher loan amount.

This loan and a refinance does affect your buying power it is referred to debt to income ration which financial institutions consider when giving out loans.  As for your credit if you make the payments it should help, if not then it hurts.

I've spent some time researching the definition of a bedroom in my local area and I wish it clear and all posted in one location.

I may have to call the local building inspector on Monday.