All Forum Posts by: Jerry Kisasonak

@Joe Fairless 

Thanks! I'm researching ML's now. My main question on them at this point is renovation costs. I assume that would be the responsibility of the Master Lessor? If this is the case, the initial costs would include the option payment and rehab costs correct?

Thanks @Serge S. 

I am looking at Ben's website now. Looks like he has lots of info there to go through. Thanks again for the heads up!

Oh Arlan... Did you have a hard time getting the primary lender to accept a second mortgage from the seller? I've had others tell me that they won't lend if there's a second coming behind theirs. Apparently that's not an absolute.

Thanks Arlan... That's the kind of thinking and creativity that I'm looking for!

We are certainly like you. If we have money in hand we ALWAYS find a good deal for it to go to! So we are high equity and low cash capital.

Thanks!

We are currently buying lots of single family homes using private money for purchase and rehab costs and then we're refinancing out with bank money at 75% LTV. In short, we're doing no money out-of-pocket investing, and are having good success with it. However, to reach our income goals we will need to look at purchasing chunks of units at a time - buying small apartment buildings.

So here's the question: What are the creative ways to get this done with no money out-of-pocket like we are doing with single-family homes? I often used to say things like "That's impossible!" But over the years I've bumped into people who are doing that "impossible" thing. Basically, I've learned that I don't know what I don't know, so it's best to stay open-minded to avoid boxing myself by holding a rigid belief system that may be something totally self-created. So... any ideas? Thanks in advance!

It has been my understanding that an agent has to present all offers regardless of what the agent thinks of the offer. In terms of the agent and his/her relationship with you, they should have told you upfront that they wouldn't submit an offer that low and they should have allowed and even encouraged you to seek representation from another agent if you wanted to.

One thing smart REO brokers are doing now is stating in the listing (under Agent Remarks in our MLS system) that "No offers below list price will be accepted." This keeps everyone from wasting large amounts of time submitting offers that have no possibility of getting accepted. It's a clear-cut, no BS take it or leave it situation, which I happen to like.

On another note, you might want to try marketing for deals or reaching out to FSBO's. No offense to realtors, but you eliminate some level of aggravation and difficulty if you start working directly with sellers. We frequently find sellers who love to do business with home buyers like us (at a discount of course) because they just don't want the hassle of dealing with agents, having the property sit on the market, etc. Their words are usually: We just want to sell it and be done with it. Well, it just so happens we just want to buy it!

Thanks for dragging me into this @Jennifer Lee  :)

I don't really have much to add here besides what's been said already. Expect there to be a very long delay on pay when you first get the tenant in. I've waited as long as three months. As for communication, expect it to suck. I know some people who use three methods of communication with the caseworker. Walk-in delivery, faxing, and emailing. When they need to get paperwork done they send the same paperwork using all three methods just to make sure it gets done AND they follow up with a phone call a few days later to verify. Personally I'm too impatient for this type of incompetence.

Also, I don't care for the fact that many Sec8 people are home ALL THE TIME. For us, that means heavy wear and tear versus 9 to 5'ers who basically only spend their evenings at the property - and that's if they don't go out and about after dinner. Additionally, people who have loads of time on their hands often get silly, or sick depending on how you want to look at it. They can be high maintenance. As the Good Book says/warns, the devil finds work for idle hands.  

If you have a nice property in a good/decent area, I don't see the need to go with the program. If you chose to buy cheap properties in mainly in Sec8 rental areas for high cashflow, better have thick skin and a desire for a more active role in managing your portfolio. In my earlier days I would not have had any concerns with this type of investing, but for where we are at now (15 years in the game), we look for properties that don't require us to settle for subsides. I'm not saying we wouldn't make an exception here and there, but it's not our current business model.

So Rick, I think you've got a basic taste of how the system works (or tries to). I wouldn't think you'd need to see too much more to make a decision on it. Get in touch if you need anything...

Hey Justin! I would write up a business plan for the park and approach banks with the deal NOW to see what the prospects look like for your refi in a year. That's the best way to get a feel for the end-game financing in my opinion. Of course, like all things, you'll need to shop it around - especially since it's a mobile home park.

If you're planning on listing it with an agent I'd seek that agent out now and meet with him/her at the property prior to purchasing. Stress to them that you want an honest opinion of how the driveway may effect the resale - if at all. You might as well have the agent give you their estimation on an after-repairs list price since you're already engaging them.

To @Fred Heller comment, I live in the Pittsburgh area. We do have lots of homes like that here because homes were built on the sides of steep hills. The main problem we have with those homes is foundation issues due to earth pushing against the back side of the homes. Many of those homes are 60-100 years old, so there's been plenty of time for the ground to shift and do its damage. Also there's water runoff which can work its way through the foundation and cause the basements to be damp or have water trailing in during modest to heavy rain.

@Ndy Onyido You are on the right track. Some areas are depressed because businesses pulled out due to competition and/or political inadequacies. These areas aren't particularly bad or high crime areas - just depressed. We are comfortable buying and working in these areas.