All Forum Posts by: Dante Pirouz

From what I understand it is bad practice to rent back to the seller...he is having financial problems affording the house so technically he wouldn't qualify to rent it if he went through a normal tenant screening so I would say it is a better bet to find new tenants and tell the seller he has to move at COE...think about the emotional attachment a seller would have to house he used to own but now has to rent...

@Nicole Hoss We did HELOCs on both our primary (that was the first one to get the ball rolling), and then on our duplex and that allowed us to buy 1 SFR for a flip and 1 SFR for rental. We will continue that ball rolling and prices have been appreciating quickly in Michigan so we are able within 1 year to have ARV 3 to 4 times the HELOC debt outstanding so that's a good set of numbers.

We use HELOCs from Huntington Bank and have gotten similarly low rates as @Joshua D.

If you want more details @Hilary Hageman on how to use HELOCs to expand your portfolio check out any of @Brandon Turner 's postings on the BRRRR method...genius stuff!

Until you get the mold checked by vendors who do this type of work out don't prematurely over-react! There is always the risk of a major flaw (I just pumped raw sewage out of a crawl space for $5K but I had that built into the numbers with a contingency budget...not fun but the deal is still CF positive). I have had mold in 2 of my properties and have found that sometimes it is just surface mold that can be removed and dry wall replaced, sometimes it requires more intervention. We have an environmental testing vendor that will test your space for mold, asbestos, lead for $500-$700 if you want to do that before you call out remediation vendors. They will identify exactly where the main source in the house of the contamination if any so you can pinpoint the cleanup. Find a few remediation/clean up vendors have them come out and give you a quote. Don't fall into the trap of agreeing with their "oh my gosh this is really bad" opening comments...that helps them to prepare normal homeowners for the worst case scenario but you are a "professional" so you just have to listen to what they are telling you about the technical aspects of what you have and pick the vendor you think is telling you the wisest solution. Everything can be fixed with enough time and money...but if it costs a ton you just can't spend in another part of your reno budget (maybe no granite countertops ?? :))...if your numbers were run correctly with enough margin built in it will turn out ok.

Brandon's numbers give you a minimum target per door that you can shoot for but everything depends on the deal you're analyzing because every deal has different pluses and minuses/dynamics/...my suggestion is that you pick a property that looks interesting to you and run the analysis on it and then ask the forum whether you are missing or misunderstanding anything in your analysis. It is hard to say anything about hypotheticals...just as a rule of thumb I would always pick the deal that gives me the highest CF per doors...I dream about that those kind of deals :)

@Jeff Valentino The system isn't an "automatic" one...the bids are evaluated and compared and definitely there is a big chance that a last minute owner occupied bid came in at minutes before the deadline and was accepted...I lost out on a fantastic property across the street from the lake for $25K (worth $200K) exactly that way and I know that the guy who got it during owner-occupied isn't technically living in it but is holding it unoccupied/unrehabbed until he can either flip it or rent it out...I drive by it everyday and think wow what a opportunity that would have been...just the luck of the draw!

Working with HUD properties have their own quirks that you have to live and learn but I love that our government is working with investors like us to help benefit all concerned even it if is a little wonky sometimes...like @Greg H. said I have found my best deals from HUD!

I completely agree with @Greg H. about HUD...with a little patience and perseverance the HUDHomestore system works for us and is more straightforward/cut and dry than dealing with a non-governmental/regular seller. I would suggest waiting until the deadline has passed and then checking the system regularly. I have found that during the owner-occupied period things are usually less predictable for us and thus you tend to lose bids more often than if you bid on properties that are in the extended period. I prefer to bid on "seasoned" properties that have been sitting in the HUD inventory for a while because not only do I get a faster response to my bids but I also get a little more "gimme" on getting a below-list-price bid accepted.

Huntington Bank does refis for me at 6 months based on appraised value but they only loan on 1-4 units unfortunately.

@Sean Richway is there a minimum loan amount? Many of the deals I do in my area are between $15K and $30K

@Dell Schlabach From my understanding (I could be wrong) Fannie Mae and HUD can be similarly draconian :/