All Forum Posts by: Gary Newsom

I guess I should have added on to this with some more info. We are in a position to help.. either with the down payment, covering any shortfalls, or both. 

Help appreciated in suggesting the best way to accomplish this. I will lay out the details and then the question. 

My mother in law is 85 years old. She owns her house (modular home country setting) free and clear. It is worth approximately $150K.  She is getting to where she needs to be closer to us and we are trying to find  a situation for that to happen. She has no income other than social security and no real savings.

We have found a property close to us that looks pretty acceptable...price is $165K. Obviously we could sell her property and she could buy the other, but what about renting the current property? We have discussed with a property manager who says she doesn't see any problem getting $1000 a month...maybe a bit more and that it should rent easily. How can we manage for her to buy a house without selling the one she currently owns...keeping it for a rental and having the rent pay the mortgage on the new property. Will a banker look seriously at that since she is 85 with no income? The rent would more than pay her mortgage. If not a regular bank, how would you suggest we go about this? All advice appreciated.

Thanks Larry. I will check with you when you get back on when is a good time to talk.

Hi

I am new to this and need some good advice that hopefully will keep me from spinning my wheels when I get out there. Here's the setup: I am a small business owner (sole prop) been in business for 11 years. I make more than I currently show on my income taxes. I have about 80K in savings.

My goal over the next year is to

1) Buy a rental property...I have one targeted that has positive cash flow, price is 69K. Tax value on  property is 84K. A property manager I interviewed said she should have no problem renting it for $800-850.

2) Refi my personal residence and rent it. I don't have huge equity in it.. current value is maybe $275K and I owe $220K. I have a really bad second mortgage on it that makes my monthly payment much higher than it should be. The house should rent for $1500-$1600/month. (FWIW,I am in a currently hot market)

3) Purchase a ranch outside of the city with a separate lot that has enough land to accommodate my business ( I am in ground transportation...need room for 7 or 8 vehicles and a small building to be used as an office) I am good with buying a fixer upper here, moving in and working on it as we go.

4) Moving from that property (leaving the business on the extra lot) and taking on another rehab or maybe if we have a great experience doing the first 3 steps, getting further into buy and hold or buy, rehab and hold.

I have some challenges with finding financing. Talked to one bank today. Small community bank. I was referred by one of the clients of my business who is on the bank's board. The bank is a "cash flow" lender. (These terms are new to me..) He said my numbers don't work out currently to where he could even do the refi for me. I have trouble understanding how, when I currently pay $1700/mo for mortgage payment, they could possibly think that I couldn't handle a refi which at today's rates puts me at about $1100 :-). Seems a no brainer from a purely logical standpoint.  BTW, the bank I talked to is the one that is currently holding my savings. Needless to say, I was not happy with that result.

So...can I get some good advice as to how to find money in my situation? Different kind of bank? Crowdfunding? Private money? One potential asset I have is that due to the nature of my business, I have long term relationships with a number of people who have more money than they know what to do with. It occurs to me I could tap into that, but I want to be ready if I do. What is the right way to set up something like that? Some kind of trust? What is a reasonable return on their investment? Would private lenders even be interested in long term mortgage financing?

Love to hear from some of you and I will be watching to answer any questions I have left unanswered in order to fully assess my situation. Thanks!

Here is a house that may well become my first investment purchase:

http://www.zillow.com/homes/for_sale/1438-13th-ave...

I would be buying it from a friend. He bought it as a rental in 2006. Tried to manage it himself. Never did a great job from that end but the last tenants absolutely trashed it. He has rehabbed it and it is now totally redone...fresh paint, new kitchen, refreshed hardwoods, new linoleum in the kitchen, new heating/cooling sytem.

He bought it for 90K (very likely overpaid by a good bit..) in 2006. The tax value on it now is about 84K. A down and dirty price evaluation on Zillow comes up in the mid 70's. He needs about $70k to get out without any more out of pocket.

I have talked to a reputable property manager in Hickory who says she sees no problem with renting it at $800-$850/month.

My questions (and I am open to feedback on anything you see that I don't question here...) are:

1) Can someone give me a backup on that Zillow evaluation?

2) House was built in 1939...what do I have to worry about from that perspective...lead paint? Asbestos? (I will of course make a home inspection a part of the official offer)

3) You guys see anything else? I know a friend deal is sometimes not ideal and this one is definitely not a home run but it seems fairly safe for a first time investment and gets me in the game as I see it with potentially a solid "base hit" continuing the baseball analogy. Thanks in advance for your input!

Hi

My name is Gary Newsom. I am new to RE investing. I see myself mainly doing buy/hold or buy/rehab/hold, but would like to try flipping also. Looking to build wealth for retirement/legacy. Being new I know I have a lot to learn. I am interested in networking here at Bigger Pockets and especially interested in finding someone who would mentor me.  About to purchase my first rental property in Hickory, NC. Looking forward to interacting and hopefully meeting some of you. BTW, 56 years old, small business owner. Live in Cornelius, NC.