All Forum Posts by: Kevin Siedlecki

@Mark Brogan- I think you misunderstood my point about seller-financing above.  Of course a seller who is getting rid of the property won't care what your credit is, but if he's taking on the financing he probably will. 

I don't know much about subject to, just that my loans all have clauses in them saying that I can't do it.  Are investors treating that like a due on sale clause for transferring ownership?

I agree.  Not much wiggle room here.  Do you want a problem tenant for the remainder of her lease, then a vacancy?  Either let her leave and fill the vacancy now with a tenant who is not expecting central air or put it in for her. If she likes the place and you are responsive as a landlord, she could save you money by staying long term.  If she thinks you are a dishonest or unreliable landlord, then she's out and you have a vacancy to fill.  

Putting it in can also be a good long-term investment.  If you rent to Section 8 tenants, central air gives you points.  If it's a "pretty sweet place" without central air, then once you add it you can brag about "all the amenities" or some such phrase in your marketing.

@Mark Brogan- Of course, but you were talking about seller financing.  A seller as such won't care about your credit, but when the seller is also the lender he will.  The subject to has to be approved by the bank, too, right?

Have a lawyer look at the contract and then make a call to discuss it with her.  I don't know enough about contract law for my opinion to mean much, but if it says you are entitled to a written report, and she refuses to give one, then the lawyer should help.  It will cost you some money, but it will be more efficient than trying to deal with it on your own.  Just a phone call from the lawyer mentioning the part of the contract you feel she hasn't followed through on might scare her straight. 

@Mark Brogan,  Good ideas.  Can they really work without decent credit, though? I would imagine most sellers are still going to want to see decent credit.  They can be more flexible than a bank, though, for sure.  Subject to is getting harder and harder. Can you really get approved with bad credit?

@Kirshner Baptiste-  It might take a few years if it's really that bad, but if you're serious about becoming an investor, you should commit to improving your credit score.  That will open up a lot more options for you.  

Without decent credit, you're going to be limited to jobs in the industry (not really investments), or cash only purchases or partnerships.  Most serious real estate investors would be wary about partnering with someone with bad credit.  

Appraising is a good start.  You'll be in the industry, making some money while you learn about the market.  I hope other BP members have some more ideas for how you can get started while you work on your credit.  Good luck!  

I second everything @Christopher Telles says. I realize that this wasn't what you were asking, but best way to proceed (based on the information you provided) is to pull the plug on the "deal" and get back to research. Relying on Zillow for pricing is just one of many red flags here. Do you have a previous relationship with this realtor? Why does the seller care about LTV? It should only matter to the seller if LTV is 0% and you can close immediately. I have other concerns but I'll stop there for now. For your sake, I'd like you to explain more about the deal before you write any checks.

I would definitely advise setting up the LLC with a lawyer. A lawyer might be more expensive, but definitely worth. A lawyer can help make sure you not only set up your LLC properly, but that you operate properly, too. Otherwise, the LLC does not offer the liability protection you think it does.

As for a mentor, I think @Joshua Dorkin and @Brandon Turner are as helpful as a mentor to all 50,000+ of us who listen regularly to the BP Podcast.  It never hurts to meet more people and learn from more perspectives, but after finding BP and the BP Podcast, I have not felt the need to actively pursue a mentor.  That said an agent or mentor with knowledge of you local market can be very helpful.

Good luck!

@Account Closed- I like the idea of starting with a rental.  Be patient; find a place that will cash flow well and quickly without much reno.  What I've loved about building a rental portfolio slowly is the ability to learn on the job without having to learn all at once.  When something comes up, I learn how to fix it, one thing at a time.  Once you have some experience dealing with the issues that come up, and through your rental you have developed some relationships with contractors, electricians, plumbers, lenders, etc., then think about a flip.  

Good luck!

@Alexander Felice- I agree.

@Lawrence Eddy, I know it wasn't your question, but as Alex suggests, your best strategy might be to milk this rental for as long as you can and use the savings you have to purchase something that will cash-flow sooner.