All Forum Posts by: Jon Deavers

@RJ McCoy Your strategy is feasible as far as it goes but a big part of making that work is finding a deal where someone is willing to sell you a property that only needs $10k in work for 70% of it's market value. Under current market conditions in that price range for most parts of the country there is a huge amount of competition for distressed properties sub $100k. 

It's also important to understand that FHA has pretty strict condition requirements and so a distressed property is likely not going to qualify for FHA financing depending on what repairs are needed. This is important for the possibility of your loan getting approved but also a major factor in a seller's decision to accept an FHA financed offer over an investor who is paying cash or financing with a conventional or commercial loan.

I would suggest taking a different approach with your FHA loan and looking for a property that you would want to live in for an extended period of time but also would cash flow if leased it after satisfying your FHA owner-occupancy time requirements.

The house we are currently living in was purchased with that strategy in mind. It's in a neighborhood that we love and the house is a great fit for us personally but we leveraged FHA financing and the local state housing authority grant program to get into the property for no money down and a PITI payment of $950/month. The property will currently rent for $1300 (at the time of purchase was closer to $1200). Not going to make huge returns at those numbers but if you maintain it well while you live there it can be a great way to start building your portfolio without a huge out of pocket cost. Additionally, because we bought in a popular owner-occupied area, we've seen the property's value appreciate over %9 in the past 3 years.

Food for thought. Best of luck with your investing!

I typically work with Tom Schaefer over there. But they were recently purchased by Union B&T. Tom's still there though doing small business/commercial lending

You're welcome to but fyi, I'm not licensed in Texas and am not an attorney so it's best to review with someone specialized in the state where the property is located. 

@Joshua D.

This has been the hottest sellers' market in a decade so contractors have been very backed up and hard to connect with across the board. The most reliable vendors and service providers are always acquired through local referral. Check with your local contacts for referrals (Realtor, lender, REIA members, etc). Also, nextdoor.com is a great place for connecting with local service providers. You'll get direct replies from not only referring customers but also connect directly with contractors/vendors actively looking for more work.

Hi @Shawn Coles

I would be pretty concerned about a 1-page contract having enough protection outlined for you and the seller in it. It takes almost a whole page just to list the legal description, price and terms, settlement date, and signature lines so there's a lot being left out there. The best recommendation I can make is connect with a good, reputable title company/attorney and ask them for a contract template and not the other way around. There's a reason they don't like to deal with 1 page contracts and that's because it's a legal landmine for everyone involved.

Hey @Josh Simpson

Welcome to BP! 

Hi @Rafiq Islam

You definitely won't find anything for $100-120 on Monument Ave except for the odd condo which will likely have a prohibitively high COA dues. Proximity to U of R is also going to run you a minimum of $230k (and there is a lot more on campus housing at UR than there is VCU). 

I also suggest the tri-cities for SFH's 100-120k. Great working class industrial/manufacturing/retail employers throughout southern Chesterfield and tri-cities as well as Virginia State U, Fort Lee. Pretty easy to hit a 1% rent to price ratio there with relatively little or no rehab.

@Alma Kenup

I agree with @Chris Seveney. If the lenders are telling you that employment gap is the issue then it would probably be a good idea to look for a partnership or private lender. Right now in Richmond if you have a deal you can find the money. The hard part is finding the deal. 

Hi @Michael McBee

Welcome to BP and enjoy all they have to offer. I also suggest setting up keyword alerts for locations and topics that interest you. I believe you can do that from your profile screen up top. Best of luck!

@Jingjing Ye

I would second the recommendation made by @James E. regarding Richmond. Small multi's aren't a dime a dozen like they used to be, but the city is in a much different state than it was ten years ago too. You can find MF buildings that rent quickly for top of market rent but they tend to disappear very quickly or trade hands off market. Still, with a diverse employment base and three colleges inside the city limits, there's a lot to like about the tenant pool depending on your price range and overall strategy.