All Forum Posts by: Francisco B.

@Jessica Zolotorofe

Thanks for the input. I made sure my realtor added to our offer that we have the right to conduct an inspection and an oil tank sweep.

It really does suck that banks can cancel at any time. Especially after all the inspection and attorney fees.

As far as the deal is concerned, it's good but not great. I'm starting to see more reasonably priced REO's pop up now so I'm ok if we don't get this one.

@ Wayne Brooks

Thanks, that's awsome advice. I'll go over the details with her immediately. 

@ Wayne Brooks.

Thank you for pointing out the differences between an REO purchase vs buying at a foreclosure auction.

I'm using my usual realtor who is awsome. I was going to use my ussual closing attorney until the listing agent warned us to use someone who is really experienced with the REO sale process. That lead me to believe that the process was a lot riskier.

I guess it's like you said, a good title search will uncover any dirt on the title.

Thanks again for the reply. 

Hello everyone. I'm bidding on a bank owned foreclosure and I was advised to find an attorney that is very knowledgeable with the process. Apparently there are greater risks of hidden costs that an unexperienced attorney in this field may miss. If you can recommend an attorney or offer any advise it would be greatly appreciated. I'm in Bergen County NJ. 

Thanks

I strongly suggest that you check the state and local laws before buying it. Some towns have their own rules independent of the state. 

For example, in my NJ city you can't raise rents more than 4% a year. They don't care if the rents are way below market value. They will say you chose to buy the property knowing what the rents were.

In order to raise rents more than 4% you would have to claim and prove landlord hardship. Also even when leases expire it's hard to remove tenants who pay on time and follow the rules. Especially if they have small children living with them.

One way of getting them out is to move in to the property once the lease expires. Here you have to give them 60 days notice in writing prior to the leases end date. Warning!!! If you don't actually move in and they find out you rented to someone else, they can sue you big time.

It's better to be safe than sorry. Do your homework.

A word of advise when calling the town. Don't give the actual address of the property. Tell them you are an investor who just wants to know their rules.

Just imagine if the tenants are personal friends of theirs. They can instruct them on how to make your life miserable.


Good luck

Right now my rate is 4.25%. It changes to what ever the prime rate is. My rate includes a .25% discount because I have a checking account with them. 

If you opt for the regular 80% heloc your rate can be as low as 3.74%. I just checked their website. 

For investment properties I believe its 1.75% plus prime.

I forgot to mention another layer of protection a HELOC offers that traditional cash out refi's dont. For the first 10 years you have the option of only paying the interest on the amount you borrowed.

Hey Kelvin congrats on your free and clear property. I personally like using Helocs for the simple reason that you only pay for what you use. I used one on my primary residence to purchase a duplex. 

For a PR most banks don't charge closing costs. On an investment or rental property they will.  

TD Bank does Helocs on investment properties. If I remember correctly they offer about 65%  of the home's value. They give full details on their website. At one point they were offering 89.99% Helocs on a primary. "SICK"

I can't stress enough how important it is that you do your due diligence when calculating the numbers. Don't leave anything out. Insurance, taxes, cap ex, vacancies, repairs etc. 

I would also recommend buying a multifamily. It adds another layer of protection. With a SFR you have to cover all expenses if the tenant stops paying. With a multifamily you will have other tenants contributing.

As a final note you should make sure you can cover all expenses should all tenants stop paying, or interest rates skyrocket in the near future. It's better to be safe then sorry.

Good luck!

@Ryan

Great ideas, thanks.

@Jared 

Thanks, I'll give him a call.

Hey Jared

Thanks for the quick reply. Yes I'm in Bergen County North New Jersey.