All Forum Posts by: Dante Pirouz

In my experience with HUD, they have been very strict with us about deadlines and once an extension has been denied we have not been able to do much other than hope for part of our EMD back. It is the reason I no longer buy HUD properties with bank financing only cash because banks tend to drag their feet with closings and HUD doesn't give you any leeway for that...hope it works out ok!!

I am in the Port Huron area and the company I use is very good! PM if you'd like the contact information!

Thanks everyone for all of the helpful comments on this!

@Jeremy Pace yes I do have the credit, income and reserves to get a commercial loan I just want to avoid using all of my precious cash if I can...on your suggestion I am meeting with the commercial loan officer at my business bank on Monday to see if they are ok with the seller holding some of the down payment debt.

@Jay Dewberry yes the numbers I've run so far look very strong. The rents are currently below market rents so there is an opportunity to add value as tenants switch out...capex needs are the area where I would need a better assessment once an offer is accepted but the properties are generally in good shape.

@Krystof Bartos and @Nathan Diones I know that his wife died recently and he just wants to retire from real estate with some cash in his bank so he doesn't look open to sharing profits but I can always ask the broker...I believe these are all owned debt free.

@Aaron Mazzrillo I hear you...what is proposed above is the sellers first salvo so I can respond with a written offer that either asks for discount on the asking price or lowers the down or both. The asking prices are about at market rate so they aren't heavily discounted except for the duplex. Your suggestion makes me wonder whether buying just the duplex might be a good first step which I could easily do with a residential 1-4 unit loan from my bank and a standard 20% down. I just am anxious/impatient to get to my goal of 20+ units and I thought the seller financing might help me get all these properties and hit my numbers...It doesn't look like there are many in this area with the capability of buying these type of multi-units (most investors in this area are buying SFRs) so there isn't a lot of competition for the deal.

@Don Konipol I agree with your assessment of 100% leverage and I usually buy small multi-units for all cash so using leverage at the outset makes me a little nervous but it is either move up to buying bigger multiunits or continue to buy SFRs/<4 units at a slow rate or hit it out of the park with a big one. The only thing I lack is the really big chunk of cash for the down so I appreciate the creative ideas on how to jump this hurdle...I will let you all know how the bank financing goes!

I have the chance to buy 3 multi unit properties owned by a seller who wants to retire. The seller is willing to do seller financing with the following terms:

35% Down, 7% Interest, 7 Year Balloon

The asking price and rent rolls are as follows:

Property 1 = $63,999

Unit 1: $550

Unit 2: $550

Total Monthly Income: $1,100

Property 2 = $349,999

Unit 1: $400 Unit 7: $450

Unit 2: $450 Unit 8: $450

Unit 3: $430 Unit 9: $450

Unit 4: Empty ($450) Unit 10: $450

Unit 5: $410 Unit 11: $350

Unit 6: $450 Unit 12: $450

Total Monthly Income $5,190 + $150 (Coin Laundry) = $5,340

Property 3 = $239,900

Unit 1: $550

Unit 2: $550

Unit 3: $550

Unit 4: $550

Unit 5: $550

Unit 6: $450

Total Monthly Income: $3,200

I will have about $60K available pending an SFR that I am selling but that does not give me the total downpayment the seller would like which is about $225K. How could I structure an offer that takes advantage of the seller financing offered given what I have available in cash? Would it be reasonable to offer 10% down to the seller? Could I borrow part of the 35% down payment that I don't have from a private or commercial lender?

Any help on this would be greatly appreciated!!

Check on what capex is needed. Also check crime in the area (I use Trulia for that).  That may explain the price. 

You won't know until you make an offer and get the details of the deal nailed down with the selle. In making an offer the only risk as long as the offer is written properly is that you might lose some of your earnest money (I do HUD deals so that happens sometimes with their bids) but other than that I suggest if your initial analysis looks strong put in your low ball offer and see if there is a counter or acceptance. Once the deal is accepted you can do an inspection which will tell you more. You'll never know all the warts of the property until you've owned it for a while but that's part and parcel of this business. Make the offer and let us know what happens!

I agree with Sterling! I find that Zillow is usually a conservative but pretty close to accurate estimate of what I can rent my units for. Rentometer has been completely wrong in terms of rents for my area. 

Just keep in mind that delayed financing will only give you a percentage of the purchase price and maybe some of the rehab money...it is not based on the ARV like a loan taken out after the seasoning period (for example 6 months) would be. That doesn't work well for properties that are well below the ARV (such as in Michigan where we are buying properties for $30K that are worth $70-80K and $110K+ at ARV).

The suggestions above are good one's when showing or viewing properties as a female investor...This is a also a concern for me as a woman when I am working on renovation jobs at a property by myself...sometimes early in the morning or late at night...Last year I got a rescued German Shepherd dog who I take with me anytime I am renovating a new property and she has become my eyes and ears (even for roaches and mice) and security guard (and nice company) during jobs. I even have her with me when showing/viewing properties and she makes for great conversations with potential tenants, neighbors, etc. She's become my company's secret weapon :)!

 Goldie, my RE investing "security guard"

How much are you going thinking of needing for the reno loan? It might be worthwhile to consider other options besides a reno loan from a bank since there are some hurdles with reno loans that I found to be a pain. Also have you considered selling the property as is?