All Forum Posts by: John Matthews

@Mike D'Arrigo

 Can you go into how one interperets the data properly briefly?

@Luis Rosario

 Welcome to BP. You're doing exactly what I'd like to do (house hacking) but unfortunately my better half put her foot down on us going that route for our next property...

Anyway, best of luck do you, hope to see you around!

@Sergio Altomare

 the 4th is better for me as well. Thanks for putting this together

@Sandra C.

First, be sure to tag people when you mention them. You can do this by typing @ followed immediately by their name, then clicking their name when it shows up beneath your reply window. Otherwise people won't know you're talking to them!

Second, shop around for banks. There are definitely banks that will, though it may take a while to find the right one. If they won't allow a HELOC talk to them about a cash out refinance.

Is the property that you were willed a good property? As in, from an investment perspective, is it worth holding onto? Yes it's free and clear, but is it an asset or a liability? In otherwords, is it earning you more money, the money could earn if you sold it and put it somewhere else. If it's a liability, then if it were me, I'd look at selling it, and using that cash instead - but I don't know your situation.

There are plenty of other ways to get cash to buy a homepath property the first few that come to mind are FHA 203k (for owner occupants if you'll move), Hard Money, Private Money or bringing on a JV partner (joint venture) to help fund the deal. If it's a good deal - finding a JV might not be the hardest thing in the world. I'm actually going to be looking for one soon.

Let me know if you have any questions about each of those things - or look around on the forums - there's a plethora of information here!

@Sandra C. Welcome to biggerpockets.

So you're just talking about using a HELOC to purchase the property? People do that all the time. You'll want to talk to banks ASAP though, depending on when you need to close, and since I believe homepath properties don't allow contingencies - so if you can't raise the funds, you're out the earnest money deposit. The other thing to consider is making sure that the property you were willed is valued high enough. AFAIK, banks will only give you around 70% of the value of the home in a HELOC.

@Allen Yi

Don't forget Capital expenditures (capex) and property tax. And holy moses that's pricey homeowners insurance, is it really that expensive out there? I just got quoted for about 1200/year here in philly.

How long have you been looking for a property? The more properties you see, the easier it'll be for you to determine what's a great deal. What may seem like a great deal may pop up every 2 weeks, in which case, you don't need to move until you're comfortable with the deal.

@Account Closed

Potential reasons:

• Lack of knowledge - they could be under water and not know they can short sell their property. 
• Wholesaler creativity - maybe they owe more in taxes or some other debt than their house is worth. Example: Betty has a lien placed on her property by the HOA for $20k, and back medical bills of $50k, and her house is worth $100k. You offer her $50k AND you promise to pay off her debts. Instead you go and talk both debtors into erasing debt by 50% meaning you win and she wins.
• Time - as @Joseph Ball if they need their money yesterday, and houses are taking 3 months to sell, that's not going to work.
• Laziness - They're trying not to think about their problem, but it's hard to ignore getting the same mailer 5 times
• Hassle of conventional mortgages - Deals fall through, people snoop around your house, not everyone wants to deal with that
• Too busy - See laziness above

@Ketan Parekh

As for when to start using an LLC - that's a personal choice, but generally I'd start with an LLC sooner rather than later, it's easier and cheaper as you don't have to pay transfer tax on as many properties to move them over under your name. That said, you should have sufficient liability insurance.

As for your second question, the only things I can think of are:

• have the seller pay closing costs (as seller financing), which isn't really decreasing the cost so much as deferring the cost
• Don't use an agent, then convince the sellers agent to split the commission with you instead.
• Buy all cash
• Use private money with no up front costs - but if you refinance you'll be paying them on the backend
• Shop around with different banks. They all have different origination fees.

@Allen Yi

 Hard to say as I don't know your market. That said, the property will likely cashflow (maybe $300/mo - 50% of rent - mortgage). What is your goal in RE? If it's to build wealth as quickly as possible, probably not since that's only a 12% return, but if it's to buy one property per year, you're still beating the stock market!

Count me in, let me know when you have it. @Tim Javan  @Nancy L. and @Account Closed and I all had our own offline unofficial meetup a few weeks ago. If we have another one I'll be sure to invite more people from BP!