All Forum Posts by: Dante Pirouz

I'm in the Port Huron, MI area with several properties but I would love to find a way to work together! Let me know!

With HUD (and I would assume with Fannie Mae and Freddie Mac) properties, you won't get them to pay for any deficiencies at closing so you'll have to be prepared to absorb the loss if you want to proceed with the closing. You should compare this cost to what you will lose if you renig on the deal at the closing...I would say this is not worth panicking about...If the analysis you did pre-bid was good (cash flow positive !!!) then go ahead with the deal (you should have built in enough of a contingency to account for these kinds of surprises)...this is actually a normal occurrence, in my experience, when buying from gov't institutions.

I agree with many of the opinions above...having the copper gone is actually a good thing for your plumber who can put in a pex system without having to jerryrig into an existing system...the same situation with a HUD duplex that had all the copper ripped out cost me $1500 to have a new pex plumbing system put in...better than ever!!

We've found that we can apply for at least 2 loans at the same time from our bank which is a small, local credit union as long as we have the down payment, tax returns, etc. so it makes sense to ask the loan officer you are working with whether they will do 2 or more property purchases at the same time. They are still separate transactions but they can be done with the same paperwork saving you a little time and stress.

There is a great BP podcast show #132 that talks about buying multiple SFRs using commercial financing:  

http://www.biggerpockets.com/renewsblog/2015/07/23/bp-podcast-132-brie-schmidt-grew-50-units-in-1-year/

By the way I was reading on another post that the O/O period is usually 15 days but I've seen it as short as 4 days so I think the bidding period can vary by property. 

HUD waits to look at all bids until the day after the deadline passes (usually midnight; they post this deadline on their site hudhomestore.com) and then they look at all bids that have come during that bid period (for O/O usually 10 days). They go with the highest net bid (net of HUD's expenses) or if there are no bids O/O they usually open up a new extended bidding period where investors can bid. Usually those bids are looked at each business day after the bidding round closes. I've found that we usually hear whether our bid has been accepted or denied by early afternoon the day after bidding has closed. So just because you haven't heard doesn't mean there aren't other bids being submitted. Good luck!!

I agree with George P. We've been able to get offers accepted by HUD that are anywhere from 5-10% below their asking price but I tend to wait until a property I'm targeting has been on the market for a while and has hopefully already been reduced a few times. Otherwise I've seen properties where there is a lot of early interest end up going for above HUDs asking price due to multiple bidders. Of course every market is different in terms of number of investors/owner occupiers bidding for HUDs. Buyers in my market here don't seem to like going for HUD homes (I think all the HUD disclaimers in the listing sound scary to most people) which give me some room to bid low.

Not sure if this is true for your area but I have purchased 3 HUD properties in northeastern Michigan and have found that, especially for properties that have been listed for quite a while, they are at least 50% below the most conservative comparable. That's why I like HUD more than Homepath/Fannie Mae properties which are usually much closer to retail prices. Hope that helps!

Thanks for these replies. I'm not sure if it is a land contract but I will find out. They will not take a smaller down. 

What does the negotiable amortization schedule mean? If I calculate the terms it looks like a $4500 loan payment per month but not sure how amortization changes things.

I am looking at purchasing a 27 unit that has seller financing. Here are the terms of the financing: 

Purchase price: $339,000

Down: 25%

Loan terms: 5 year term at 6% with a negotiable amortization schedule

The units are 1 bedroom/1 bath at $450/month and 100% occupied. The big expense seems to be landlord paid utilities which are averaging $170 per month per unit. The current rents are about 15%-20% below market. 

The downpayment wouldn't be a problem but my real concern is whether the cash flows would be positive given the 5 year loan term. Any advice would be appreciated!