All Forum Posts by: Dave Versch

How is this a deal? With 1200 income and 1400 PITI, you're already in the hole for 200 per month, and that's not including the rest of the expenses. What am I missing here?

Hi all,

I'm under contract for a 2-family house. Purchase price is 26.5K. I'm looking to purchase one or two other similar properties in the same price range, in the same city. I'm considering paying cash for the properties, and then doing a cash out refi with a blanket mortgage to cover them all. Planning to buy and hold for several years. But I have a couple of questions.

1) Is this idea feasible, or am I way off base here?
2) How difficult would it be to sell one of the properties and hang on to the rest in the future?
3) I plan on holding title as an LLC (same LLC for all properties). Will this be as big a problem when doing a blanket mortgage as it is when doing conventional?
4) What's a typical current rate for a blanket mortgage, figuring 75-100K, 30 yr fixed?
5) Do I need to do blanket insurance as well if I want to do a blanket mortgage, or can I insure individually?
6) What are the major advantages/disadvantages to both blanket mortgage and blanket insurance?

Hi all,

I'm looking to finance the purchase of a 2-family in Buffalo, which I intend to hold as an LLC. Purchase price is 26.5K. I don't have a problem purchasing in my name and then transferring title to the LLC, or purchasing as the LLC and personally guaranteeing the loan.
Does anyone know of anyone in that local market that I can use for this?

What are the advantages/disadvantages of buying a property (duplex) and having the seller hold the note as opposed to conventional financing? Is there anything I need to watch out for as the buyer?

I applied for a mortgage with Bank of America about 5 weeks ago. I'm supposed to close on this 2 family on 3/27. I've been bugging them for the past week because they haven't had the appraisal done yet. Finally today they called me and said the appraisal came in at 22K. The purchase price of the house was 26.5K and the loan was supposed to be 21,200. So they won't give me the loan because it's at 96% LTV. So I say give me the loan for whatever is 80% of 22K (17,600) and they say they'll call me back. Some nitwit in their underwriting department calls me back later in the day and tells me that they won't give me the loan either way because the appraiser didn't like the "condition of the house". I asked him to elaborate and he tells me that it looked like one side of the roof was replaced recently and the other side wasn't. Well, that happens to be true, but SO WHAT!!??

Anyway, my contract is contingent upon getting mortgage approval so I can get out if I want to. But I think I want to do the deal anyway because the numbers are very good. I can just pay cash and get the money from my HELOC. Has anyone had a similar situation? How accurate are appraisals really? If I'm paying 26.5K for a house that appraised at 22K, am I definitely overpaying or is this extremely subjective? Any thoughts would be appreciated.

Got an email from this guy the other day advertising this web site: http://thecolumbuswholesaler.com . I was wondering if anyone had ever heard of these guys or dealt with them before, and what you might think of the properties they have on their web site, like if the prices are reasonable for the area, etc.

Does that "net" cash flow account for debt service, vacancies, property management, and maintenance (or any expenses at all)? I've never seen a 40K home generate that much cashflow. If you can show me that this is for real, I will buy 5 of them from you today.

Several people seem to think that there's a significant difference between a SFH and a duplex. Aside from 2 tenants to contend with, and assuming all tenants are paying utilities either way, why is it so much better to do a SFH?

Suppose I buy a rental property, finance it by taking out a mortgage and get the down payment from the HELOC on my residence. If I then rent this property out for 30 years and pay off both of those debts without ever putting up any of my own cash, according to you guys I've not only made money out of thin air, but I've also stolen wealth from my tenants. I suppose you could look at it that way, but since I'd have taken on this debt and all the financial risk while providing my tenants a place to live at a fair market rent, I prefer to look at it as having earned that money in return for taking on that risk, maintaining that property, and providing that place to live. That's just being a capitalist.