All Forum Posts by: Jake Wiley

We are still buying and working in our local market - Charleston, SC.    At the end of the day, the market fundamentals are very strong here, with a lot of in-migration.   The housing shortage is real and geography, the Atlantic Ocean, creates a natural barrier to expansion on one side.    When you've been buying for years, you have the benefit of being a known quantity and on people's radars as a legitimate buyer.   As mentioned above there are deals that often come back on the market for some reason or another and that's when our reputation works for us.   Patience is key, but we've got the most going for us locally.  

The game is all about cash flow. You should do another deal if the refi and the additional property improves the cash flow globally. The BRRRR strategy only becomes an infinite game if you follow this rule.

@Anwar Albarouki - Aside from the great folks here at BP, I always recommend getting plugged in with the local REIA too. You'll shortcut the process to finding wholesale friendly vendors because they are hanging around the hoop already, sponsoring and being members themselves. Additionally, having a solid network of active buyers is mission-critical as quickly as possible.

Welcome to the great world of real estate.   If you can get good at wholesaling you will have an invaluable skill that is always relevant and needed in the real estate market.   Finding deals!

@Canesha Edwards is spot on.  

If they are deceased and intestate it could get very tedious.     With that said, if you can figure out what is going on and put things in motion, it's a great opportunity.   I wouldn't expect anything to move quickly or to find anyone that seems to care or will go out of their way to help you.   You'll earn this one.

Good luck.   

@Mike Lettko - Really depends on what your goal is here.    Are you looking for cashflow?   Are you looking for equity?

One thing to consider is that you don't have to close with 20% down. You can still work with your lender on an FHA loan or another alternative. It would likely just void your financing contingency, meaning if you changed the loan type to a 3-5% down the type of loan and for some reason you didn't close due to financing, you could lose your earnest money. As long as you close, cash is cash to the seller. I've closed many single family properties that I had no financing contingency with loans to make the offer more competitive. So... there's one thing for you.

One thing to consider is that you are selling your primary home and have had it for more than 2 years as a single person you have a $250k gain exemption from taxes, as long as you were in it for 2 of the last 5 years I believe. So if you start renting it out you could lose that option after the three-year mark. The benefit to selling is to then take the gain tax-free and plunk it down on a new property. You have around $200k to use as down payments on properties, which at 20% down is about $1.0M worth of properties. If you can do an FHA-type loan on your primary, you will then have around $175k to put down on investment properties. If you can find some good rental properties that will not impact your DTI ratio (generally speaking this is the case when rents multiplied by 75% covers your PITI) then that $175 could lever up to 875k in rental properties which is really strong.

Hopefully, that is helpful and good luck!  

Jake

Sounds like Hardi/cement siding would be a great option based on what you are looking for, so curious as to why its not being considered.   You mentioned weight, followed by a mention of their being foundation issues.    Are you concerned that the weight of cement siding could create issues with the foundation?    

I am connecting these dots in my mind, so maybe that's not the cement siding being eliminated.   However, if that is the reason, I'd reconsider putting any more money into the property until you are comfortable with the foundation itself.    

@Jay Cho.  Think you need to consider the outlay and the expected return.     If the tenants are paying the utilities then your outlay has no real cash flow return to you.    However, if you believe that tenants will be moving in and out of the property because of the high utility costs, then maybe it does make sense.   

I am assuming that you are indicating that you are going to put rigid foam board under the siding.   Consider the impacts on window, door, soffit extensions that may be required as well to accommodate the extra depth.    You didn't mention whether the house was on slab or raised.   If raised then you will definitely need to consider the insulation under the house as well to ensure the expenditure results in the efficiencies you are aiming for.  

At the end of the day, if it is done well and creates a good seal it will make the property much more comfortable and likely help retain or bring in higher quality tenants.   

Really interesting question

What I would do is seek out the possibility of title insurance in a situation like this, as the attorney would have to due the due diligence to provide the insurance.    It would probably take a bit of searching.    

It's my understanding that foreclosure provides marketable title and clears the liens on the property, excepting taxes that are permanently attached to the property and could result in a tax sale if not paid.   The proceeds are used to settle debts in order of priority until the proceeds are exhausted and then the title is theoretically marketable.    Any deficiency could/would be pursued against the defaulting borrower.    

There is still a potential right of redemption, or issues in the process that could create headaches, but the system was designed to get properties back into commerce and that simply wouldn't be possible if title issues persisted in perpetuity.   

With all that said, I have your title rep on standby to make sure that this is all well thought through.

Agreed with @David Avery.   A call to the planning/permit office to get an understanding of what they will require should be the first thing you do.   There may be a few items on the list that make it a non-starter from what is physically, like required parking, or monetarily possible.     

Sounds like a fun project.  Good luck.  

I'd say that the point about getting the property inspected should apply to any purchase, Detroit definitely doesn't have the exclusive on properties with issues.    "Deals" usually have some hair on them, which can be both a great thing and extremely detrimental.    

Sorry to hear you've had such a rough go.