All Forum Posts by: Eric P.

Older thread but I came across this and figured I'd mention my thinking.  If you want to finance the property and can't make it happen through the actual auction get the information on the person that won the auction and talk to them directly after.  So for example:

A house in town I really like had a value of like $220k, sold at auction for $104k.  Unfortunately I don't have that kinda capital yet.  What I can do now is contact the court house to find out who purchased the home as its public information.  I can call them directly and ask if they'd like to sell it.  This gives you the benefit of being able to actually walk the property and inspect it without blindly bidding.  If it all works out maybe I offer the guy $120k.  He makes a quick $16,000 with no work, I get to inspect the property before buying, and I get to finance.  Could just work...  

Cortney,  The $10k is kinda a blanket.  With luck we wont need $5,000 of it with no real surprises to be had.  The other $5,000 of it will always be around as the emergency fund.  This is going to be our first rental.  My father is actually a handy man and we have a habitat for humanity up the road which has just about anything we could need at 75% off retail which I plan on using to my full advantage.  

So 15% down, 5% for closing costs, $5,000 for surprises and $5,000 for emergency fund and I should be comfortable financially pulling the trigger?

I've also considered not waiting for the $5,000 in surprises and just opening a 18 month 0% interest credit card should I need it.  This will get me going much faster and will let me finally "jump in" before I find another excuse.  

I bought my primary home 2 years ago and I just cant remember all that's required.

We're looking at houses around $100k-$125k, I'm estimating everything high so 5% for closing costs, I've factored inspection cost, 15% down payment (found a lender).  

Are real estate taxes required up front?  Any other cash layouts I'm forgetting?  

We also have a 6 month emergency fund for the property and a little extra for repairs and surprises once we're in.  

On a $100k place I'm estimating needing about $30,000 cash on hand:  $15,000 for down payment, $5,000 emergency fund, $5,000 closing costs, $5,000 repairs/surprises... 

Kinda like saying "Why start my own business when I can just invest in other people's businesses?"

Adding to this thread with an example.  I have my eye on a house that looks great.  I only found it because I looked at our counties sheriff sale list.  The house is probably worth $190k, but no way of knowing what shape the inside is in, the outside looks great.  The mortgage on the property is $180k (this is mentioned in the sheriff listing). 

Am I understanding right that if you bid at a sheriff sale you're covering whatever liens are owed and are still responsible for the mortgage as well???  If that's the case I can't see why anyone would ever bid on this home.   

Has anyone ever had luck trying to strike a deal with the lender directly?  This house's auction date has already been pushed back twice.  It would be a shame for this thing to just be empty for years and fall apart.  

This is an awesome thread, wanted to bring it back to life. I'm lucky enough that my wife has a great government job that covers all our bills, holds the insurance, and comes with an amazing pension. I also have a good paying job but no real perks, all the extra $ coming in right now from my job is basically to start investing in real estate, IRA, Vacations, Fun, etc. Once we start buying real estate I could probably quit my job once we hit $2,000 cashflow. It would basically be the same at the finish line if I kept working but never bought property.

The thought of quitting seems to make more financial sense when you consider the savings.  High tax rates, child care costs vs staying home, commuter costs, time to grow RE investments.  In our area child care alone can cost over $1,200.  Like many others here have stated I doubt I'd leave a W2 job before the age of 40 even if I could.. My long term goal is $20k month cash flow so wife and I do not need to work.   But it is nice to know I wouldn't need that job if push came to shove.    

I'm in NJ and though I haven't pulled the trigger just yet, pickins do seem kinda slim compared to what I read on these types of forums. To get something in a "not-bad area" not even a good area, just not that bad.. You're looking at over $175k for something turn key, but still not great. Taxes are a killer.. $140k homes that need lots of work that appraise at $210k fixed up have taxes close to $7k in most counties. From what I've seen the best way to cashflow anything significant in NJ is to find something that has a lot of surface work needed, nothing major, just basic upgrades. Know how to do it yourself and have friends or family willing to lend a hand for pizza and beer. Know how to make a bathroom look like a $5,000 job for $500. Find deals on hardwood at your local habitat for humanity or building materials auction and have your crazy but handy uncle put them in for you. Maybe you're into the house for $5,000 in repairs but it looks like you did $40k. Then maybe you can get an ROI of 15% on your initial cash layout. But I have no idea how you get close to the 2% mark in NJ unless you get very lucky and something lands in your lap.

I'm very tempted to go over the bridge and start looking in either PA or DE as I'm in South Jersey.    

Is that in your pocket cash flow?  Do you have managers, and putting $ aside for vacancies and repairs?  Or is that all figured and you're left with that number?  Because I'd do just about anything to get there.. seems impossible. 

When buying an older home from say 1920-1940 are there certain things that should be double/triple checked before moving forward?  I have a number of handy men in my family including myself who can make $5,000 look like $25,000 in updates and repairs.  But are there things that can surprise you that can really eat away at your dream?  Things that come to mind (lead paint, asbestos, bad roof, bad foundation).  Are these all things a home inspector can check for to be sure you avoid any major financial surprises other than what you already saw on the surface?  I'd always favor the side of caution.. if I think I'd need $5,000 I'd probably have $8,500 ready to go.  Just want to see if there are things out there that could be a surprise $15,000 that could be avoided.

I can certainly look around local, but I'm not sure I'd be able to find 15% down payment from a local lender, more likely 20% down maybe even 25% which could up my starting capital $5k-$10k.  I just refinanced my personal home with an online lender.  Although it did take a surprisingly long time and required quite a bit of headache asking for pretty ridiculous paperwork, in the end we got an amazing rate and I'm happy overall.  

Any benefit to a local lender other than possible faster close times?