All Forum Posts by: Greg Scully

@Charlie Cameron - Typically a PFS, REO schedule and tax returns will satisfy lenders, although follow up documentation may be needed for specific questions. I've never been asked for CPA or attorney verified documentation.

@John Hewitt - The economics background could certainly be a help with financial and market analysis.  Start hanging out where the industry players are:  meetups, conferences, Linkedin.  You may be a good candidate for paid internships as well.

@Justin Goodin - Yes, feel free to shoot me a message. 

@Jacob Miller - My first choice would be a refi - there are no tax implications for the equity you pull out.  It would still need to cash flow without be over leveraged.

@Greg Dickerson makes a good point.  However in this scenario your asset is paying for your car...the tenants payed the note down and you realized some appreciation. 

@Jackson Andrews - Depends on the business plan and quality of the tenants among many other things.  If it's occupied you have to honor any in place lease agreements, so in the short run you have to deal with the good and the bad residents.  The upside is income.

Vacant properties are easier to rehab and you have the benefit of screening your tenant base.  The additional holding cost need to be worked into the budget.

@David Comeaux  I would look to find out:

1. Why are you selling?

2. How long have you owned it?

3. What repairs have you done?

4. What repairs are needed?

5. How did you buy it (cash/financing)

6. Do they stay occupied?

There are many more, I'm sure you can google a good list.  

Keep in mind that the answers will come by just being conversational.  For instance, if you find out it was bought in 2002, just say "Wow,  a lot has changed in banking since then, what kind of terms were common back then?".  The seller could very well talk about their specific scenario because that is what they are most familiar with.

"Mirroring" is a good tactic as well.  Just repeat what a person says and then be silent. 

It may also take multiple meetings to get into the specifics.  Just concentrate on building rapport during the first meeting.

@Chris Miller - I would suggest professional property management.  They should also be able to speak to the expenses and market rents.  They will also have an established network for the inevitable repairs.

My first investments were SFR in TN. I live in Alaska and never saw them in person. Long distance investing is done all the time, you just need a good team in place.

@Chinmay J. - With historically low residential interest rates, 30 yr fixed term debt is as close to free money as we've seen.  The delta between the interest rate and inflation is minimal, inflation also reduces the real time value of the fixed payment over time, and rents tend to rise with inflation.  Meanwhile the note is paid down by the tenant.  And of course there are tax benefits.

Granted, the market may go through multiple cycles over 30 years, but so will everything else.  For a 20-30 year strategy the buy side is less of a concern and turn key could be a reasonable solution.

@Jennifer Van vlymen - If it's not currently held in an LLC it may be difficult to make the change. Look up "due on sale clause". I would speak to an attorney that specializes in real estate. The liability can be handled with insurance as @Darius Ogloza mentioned.

@Joshua Lupo - The private mortgage terms are decent.  How long is the note for?  I'd push for a five year balloon.  

I would not consider it a cash flow investment. At $300/month any modest repair would eliminate the cash flow returns.  Looks more like an appreciation play  and/or you're buying under market value.

Since this is residential, it's value is based on comps more so than income.  What's the market value on the property?