All Forum Posts by: David Krulac

Cash settled same day on hood of my car at the property.

@Felix Sharpe I related on BP previously about investment I made in sun belt apartment complexes, with Loan to Price debt of only 50%. Prices declines eating away at the 50% equity to the point that some of the complexes were under water and had negative equity and were returned to the lenders. When I finally sold I got 40 cents on the dollar. On the other hand I bought a 2007 built KY house in April, appraised for $220K, bought for $155K and rent is $1,870. I bought at 70 cents on the dollar and will not be selling at 40 cents on the dollar. I have much more control with properties I buy over properties bought by a REIT or other entities.

@Mei Zhu  It depends, on rent price range, size of unit.  For most houses we provide washer and dryer hookups, but usually not the appliances themselves. If the previous owner or previous tenants have left washer and dryer, we will leave them with the written acknowledgment in the lease that the existing washer and dryer will NOT be repaired or replaced, but will be removed, if the tenant requests.  For a luxury condo/apartment we usually have supplied washer and dryers, and sometimes for a standard apartment also, but some apartments just don't have the room or the facilities for washer and dryer.  In some multi-units we have had laundry facilities in the common basement. 

I'd do an owner occupied FHA home with 3.5% down, and possibly house hack, maybe rent rooms or a portion of the house. FHA will require you to live there for 1 year, after which rinse and repeat.

Most owner occupied mortgages require that you live there for the first year.  If you don't live there for a year, how is that different than an investment property.

Hard money loan paid off when house sells. 80% of ARV, maximum term 1 year at 12% to 15% interest.

@Chris Mclaughlin Nationally HUD determines the "Fair Market Rent", which is the Median rent and is broken down by either zip code or for the whole county. The determine the rent by doing surveys of landlords. We have been a participant in those surveys because we have been a long time Section 8 landlord. They are also surveying apartment complexes as well, as individual landlords. The Median Rent is the rent in the middle where 50% of area rents are Higher and 50% are lower. For most of our rentals our rents are higher than the Median so they are not eligible for Section 8. We have been a Section 8 landlord for decades. Most of the tenants were employed single parents with children, where they employment was at lower levels. BY HUD rules children of different genders require different bedrooms, therefore a single parent with a male and female child qualifies for a 3 bedroom unit. Other tenants that we have had were seniors on fixed income such as Social Security or pensions. We rented to a two parent family with 10 children, who had a difficult time finding an acceptable place to live. They stayed 12 years. The single parent families typically stayed 3 years. And senior tenants stayed longer. HUD does yearly inspections on all properties, which have been fairly easy. They look for peeling paint, handrails for all stairs, and cracked or broken glass windows, as well as health and safety issues.

@Dave Smart I'd say go with is the norm for the area.  In the Northeast basements are common and the frost line is about 4 feet deep, therefore the crawl space wall goes down 4 feet while the basement wall goes down 8 feet or typically less.  Buyers are used to basement storage as well as as finishing basements for additional living space.  I have NEVER finished a basement but have had houses with finished basements done by prior owners.

In the south basements and slabs are the norm as well as areas with high water tables.  At one property in Delaware, we drill a well and hit water at 8 feet, obviously not a good area for a basement.

A third alternative is to build a house on a slab, cheaper than a basement and don't have issues with moisture issues.  Lots of new construction here in PA. is done with slab construction. The $300-$400 starter home here is a townhouse, often with the garage at ground level built on a slab.  Even small lots can have say 4 townhouses if the zoning permits.  

@Brandon Lee I say neither! I bought 7 properties this year.  3 came from a new home builder, who had old unused financing arranged when the subdivision was started.  Those fixed rate mortgages were 4.25% and 4.75%, both of which I'm very satisfied with.  2 others were bank foreclosures, which numbers are rising year over year; therefore more selection and a seller who MUST sell. 1 was bought at Sheriff Sale and the last one came from a property management company who had managed property, where the owner needed to cash out to pay for their child's college tuition.  We also found some other deals that we referred to other buyers. I recently read an article that quoted the amount of money in retirement funds such as IRAs and 401Ks that is not deployed and available for lending.  It said that at most custodians most of there assets are not deployed in active lending; sitting in those accounts either getting low interest or no interest returns.

@John B. Waugaman Jr. I've been getting cabinets from the factory which is not too far away.  But they since have closed the factory.  They were already assembled and also sold cabinets that were ordered but never picked up at big discounts.  Since they closed, I asked a rehabber where they were getting their cabinets.  They recommended a local lumber yard selling RTA.  I bought 10 cabinets for $1,931.  I had my regular carpenter and a helper assemble the cabinets.  It took the 2 all day to assemble the cabinets. Part of the problem was that they were unfamiliar with assembling RTA. Different brand of RTA cabinets go together differently. It then took 2 experienced carpenters to hang and set all the cabinets. It ended up being 14 cabinets (4 were already assembled and added from my own inventory.) I was able to transport the 10 RTA cabinets in one pickup load, as it was palletized on one pallet and shrink wrapped;  so easy to transport.  Another builder told me they always use RTA, and buys them from the big box stores.