All Forum Posts by: Floyd Johnson

Yes to echo what many said. Vacant property qualifies for DSCR. However the appraisal will be the biggest thing if it needs some work to be "rentable" I made that mistake and the appraiser came back "subject to" some items needing to be finished. (They spell out everything at least) The loan could not close until those items were complete and they returned to verify the completion then signed off on the ARV and rental value. Had to sign waiver of responsibility and add insurance to small crew or pay big GC who already has insurance. Also need to think about timing as loan will not close until the 2nd appraiser confirms the completion. It can get done though if everyone works together.

auction.com has a big list around the country. Also a site called property onion I use. I am a realtor and not sure if property onion is open for everyone or not but check that out if you can. Also, if you have pinpointed some areas, you will go directly to the county. Most in Alabama I have checked are not online but are in person but they do have lists available. If you look down to Florida, most counties are online and you can do it from your location. 

A lot of great advise here, I would add. Expand your market, if your current area is not great for your investment type, to a couple hours where you could drive if need be and still manage the property. I live in Orlando but find all my deals a couple hours away in smaller cities. The purchase price is half the cost of the city, but the rental income is only about 20-25% less. So I am getting much more value within driving distance. Also, look for market priced properties with upside. Adding an ADU if available or splitting a large unit into 2 rentals. I have been looking into Colorado foreclosures, its competitive but there are properties available with some research. Good luck

From my experience, the value is always as-is for a DSCR. Subject to means you need work and the loan will not move forward until that work is done. I have experienced both. I work mainly with a great group who is a member of BP as well. Coast to coast. Ask for Matt Harner. Tell him I sent you his way. You can explain your scenario and see if they can assist you. Good luck.

Do you have experience building? If not I would not start there. Maybe a smaller renovation instead. Or JV or shadow for some time before you get in. Ground up can be challenging even for experienced builders. Many of your questions depend on where in central Florida you want to start. I work in Orlando but my personal investment properties both build and renovations are all in smaller cities. With that, permitting depend on that city is well. I know it's hard for you to ask what you want to know without throwing a broad net. And truly most answers are depending on city/county for many of that. If you have no experience it may be hard to see the profit you want as you would rely on a GC for 30% and loans normally higher without the experience. Hope this helps.

Considering the long term benefits, more than just the real estate itself but experience in the situation that presents itself. I closed on a duplex and a SFH together on adjacent parcels. Just did light reno of the 3/1 and 1/1 duplex. Will start reno in 3/1 sfh on adjacent property this week. I have another .3 acres that is zoned to have up to 7 more units. I have mapped out space for 2 more duplex. My delima is build traditional, gain the experience and have 3 renovations and 2 new builds on same lot at same project? Go a little easier with a barndo or even easier with a manufactured duplex placed and leave it? All of these will be rental as the current 2 buildings put me over 2/1 ratio. Is the experience to build and have that resume started enough for the extra cost and work? I do plan to build and fix and flip in future. Not sure this is the right time to start as I can start getting more cash flow within a month with manufactured duplex.

Good afternoon, are you lending in Florida?

I have started this journey over the last 4 months. I focus on tax deeds as that is very different than foreclosure and tax liens so maybe narrow down what your investment strategy is. Luckily in Florida once you are registered with the counties on the online portion of the auctions, you can see what recent prior bids and winning bids are. I have to say, to get into this, it is an investment of time and resources. Even if you narrow down your area. Some counties have multiple 10-30 sales per week. Some have none a month and everything in between. The due diligence is vital, as someone said above, before you buy, you need to put some eyes on it either with an agent going to take photos or some other method. You should not buy site unseen in Florida in my opinion. So many factors with weather and other issues can change from one week or even days to the next where you are putting a lot of risk out there. I have 2 assistance whom focus on a 10 county area currently who log data and do due diligence for comps, environmental issues, title issues and other investigations and takes them a total of 30-40 total hours a week. And then, a week before sale, everything gets redeemed so all the effort out the window lol. However, it is worth it as not many will put in that work and research as it is rewarding when you get what you want. My biggest issue is having enough money to get half of the items that come up so I have to prioritize which causes more last minute issues.  

Thank you both for those details. That information makes a huge difference. Better to do the 20% down to get that instant equity and will have to look into the 2 parcel information and if I need to purchase separately. This gives me a better direction to start with but I’m sure other questions may pop up the next couple of days. 

Quote from @Jacob St. Martin:

What current loan structure do you have on the property? That will likely limit your options somewhat but I would be glad to think through it and help out once you provide more detail

Thank you for offering. I have a few options as I am still under inspection period. They are as follows. I am able to use a 2nd resident loan with as low as 3.5% down 6.1% interest. Primarily to give me more return on future sale as a resident if I understand that correctly. I also have a DSCR option with 20% down or private lender at 11% for up to 16 months. I have a credit line currently open I can use for the 20%.