All Forum Posts by: Hannah Krebs

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $171,000
Cash invested: $39,000

We purchased this live-in flip with the intend of using the BRRR strategy. Area appreciation and rents have been extremely high so we wanted a nice place to live that will make us a little in the end.

What made you interested in investing in this type of deal?

The neighborhood was nice and we were sick of renting. The house needs only cosmetics and will rent close to 1% and appreciate 6-8% on average per year if markets trends continue.

How did you find this deal and how did you negotiate it?

MLS

How did you finance this deal?

20% down conventional as it is our primary residence and we do not want to pay PMI.

Hi All,

I'm right at the end of purchasing my first foreclosure and it's been a much bumpier ride than I'm used to! The foreclosure is a SunTrust Mortgage home. It took over a month to reach an agreement and get a signed PA. They asked for a 3 month close, which I accepted. Today was supposed to be the close, however, the sellers have not provided the signed warranty deed and not accepted the final closing statement. Nothing has changed from the initial disclosure, apart from a small special assessment they already agreed to. The bank has not answered calls or emails, or given any indication of intending to send it by a certain date, but their title company feels that they will be able to close tomorrow.

Does anyone have experience with this type of thing? The title is clean and clear, so I'm not too worried about that being the issue. Since it's my first foreclosure I'm not sure if delayed closings are the norm or if it's a red flag. I'm so used to dealing with sellers who have lived in the home and have a vested interest in getting the closing executed on time. Am I overthinking this or should I be concerned?

Thanks in advance for your input.

Welcome @Forrest Owen! You are off to a great start, BiggerPockets is an invaluable resource! Setting a realistic and attainable goal is also a huge first step. If you haven't already and you're looking for a good read, check out David Greene's "Long Distance Real Estate Investing" book. Best of luck to you.

@Jose L Aguilar Are you asking if you should buy older homes or new construction? Or are you wondering if you should jump right into investing in the development side of new construction? What are your investing goals? If your goal is cash flow, I would keep my properties financed. I'm personally comfortable keeping them at 70-75% leverage, so if the market tanks and loses 30% I'm still able to sell the property. Building bigger faster is much easier to do with leverage, but it all depends on what your goals are as an investor.

I'm currently in negotiations on a house that has an oil tank buried beneath the screen porch. It's an REO and the bank has had previous deals fall through due to this seemingly minor issue.

The bank initially offered the escrow the cost of the tank abandonment, but asked us to switch to a rehab-type loan. We obliged but still asked them to escrow the oil tank cost. They then asked why we would expect them to escrow the cost. It seems they no longer want to escrow any repairs.

In order to keep things moving we have decided to lower our offer to reflect the cost of the tank repair. My choices are to have the tank abandoned in place and hope that this does not negatively affect resale. On the flip side, I could tear down the screen porch, which was a poorly-done addition anyway and have the tank removed.

The cost of the abandonment is $2500 + soil testing which may be up to $4,000 out of pocket costs for a state-mandated site test. This option does not require me to tear down the screen porch.

The cost of removal is the cost of demoing the screen porch + $1500 + $4,000 if the soil is contaminated. The downside of this option is that I lose some square footage and sitting space that I could make functional.

Has anyone dealt with selling a home that has had an abandoned oil tank? If you were in my situation, would you opt for removing the oil tank or abandoning it? Should I ask the bank for an extra amount (maybe 1.5x my estimated repair costs) to cover for incidentals? 

Thank you so much for your advice in advance.

@Kath Marie Beautiful! Wouldn't change a thing, great design and flawless finishes. :)

@Anna Felka

To echo the other already great answers, learning as much as you can will reduce that feeling of uncertainty you're feeling. There are so many facets to real estate investing. Find the avenues that catch your interest, and learn as much as you can about them. The BiggerPockets podcast taught me a lot when I was starting out. Reading Rich Dad Poor Dad really put my mind in the right place. Ask questions on the forum and don't be afraid to reach out to those who are finding success doing the things you want to do!

Best of luck to you.

@Christopher Hall

You have already taken a huge first step by acknowledging you have a problem with debt and taking steps to learn how to move forward. So congratulations there!

I'm a SSgt in the Air National Guard (2W171!) so I can speak to some of the resources available to those who wear the uniform. Military OneSource has some great resources here: Link. I would also recommend asking around base, my base has a financial counselor who meets for free with our members on drill weekends. I would assume an active duty base would have the same!

The BP money podcast is a great way to hear some inspiring stories and get some ideas if you're feeling discouraged. Dave Ramsey has helped a lot of people, so I'd recommend checking his stuff out as well. I don't want to give you an specific strategy advice as I am not a financial counselor myself, but reducing your cost of living and, if by any way possible, getting rid of those payments would help you out a bunch.

Best of luck to you!

@Tony Marcelle I could see there being a market for those who aren't yet ready to pay full cash on a house and are seeking to use a loan to purchase a turn-key rental, maybe? Chances are if there's money to be made yet someone will be interested in the house. Definitely not the conventional wholesale setup, though!

@Michael Vaughan

It depends on the type of backpay they owe. If it's a foreclosure you shouldn't take on their debt. If it's a special assessment or tax lien it may. Do you know what type of backpay it is?