All Forum Posts by: Jonathan Towell

I like Leon Moody Sr 's advice a lot. I just read "the complete guide to buying and selling apartment buildings" by Steve Berges. I really liked it and night recommend it. We used the advice to negotiate a deal on a 12 unit apartment that should close in the next few weeks.

I don't see anything wrong with that, if it will get the deal done.

Pros:

- 20% down payment requirement will result in less holding costs

- Lower interest rate than a bank loan or hard money loan

Cons:

- Origination fees might be higher than a private loan

- Might take longer to close than private money

- If the condition of the property is too poor, the loan might be harder to get approved

- Bigger down payment required

There are many ways to skin a cat.

I don't see why that would be fraudulent. Sounds like good creative financing to me.

How much would the mortgage be during the 6 months? Is the difference between the $1,500 and the mortgage enough to build up the necessary equity?

If the end buyer (your client) has 15% equity after all the back-and-forth, and good credit, surely he could get long term financing better than 9%.

Austin is nuts right now. It doesn't surprise me that someone would ask for a 4% cap. It is a seller's market for sure.

Lowes and Home Depot have all kinds of grout cleaning products. Some of the heavy duty ones (the kinds that need rubber gloves to use) work really well. Something like this will probably clean it up:

http://www.1877floorguy.com/hedutiandgrc1.html

Sounds like you're off to a great start.

You can pledge the equity in your condo as collateral for your next property. 

Or, you could use that equity to secure a line of credit, and use cash from the line to make offers to motivated sellers.

You might go hunting for a deal and see if you can get an offer accepted with a 30 day financing contingency. Then use that time to determine the best way to finance the deal. If you have equity in a property and a good banker, there are a number of ways the deal could work.

50% return that takes over 5 years to get, is actually more like a 8.45% annual compounded rate of return. I'm not an investor in the sense that I provide cash for deals (I'm buying property and looking for investors like you are). But, putting myself in their shoes... if I were having to lock up my capital for 5 years, I'd at least want to see some cash in the meantime, or a much higher return than 8.45%. Supposedly stocks yield 12% each year on average.

That said, all investing is also a negotiation. Maybe there is someone that could be talked into that kind of deal.

You might check out Financial Peace University (Dave Ramsey). He has a lot of helpful advice, in particular for folks getting started. You'll want an emergency fund, no consumer debt, and some savings. He also says to keep your mortgage payment at 25% of your income or less.

We bought our first house when I earned just enough to qualify for the loan. We then paid that mortgage for eight years before we converted that house into our first rental. When your income is low, it takes a lot more patience to get started safely.

You could get standard property insurance to cover the structure. The contents would be covered by the tenant with their own renter's insurance. The tenant is responsible to purchase the insurance since they are the ones who decide the contents (and therefore the value) stored.

I highly recommend Brent Noble over at Service Title.