All Forum Posts by: Matt Devincenzo

If you have never landlorded before the bank will not consider the income for your qualification on a new mortgage, so if you can still qualify without that then maybe that is ok.

It's hard to say without numbers. What is the home's value, mortgage payment and what is the potential rent?

I invest with family, but mine are my parents and sister. Ours is not formally drawn up or anything like that, but we all are working to a common goal which is mom and dad being financially taken care of toward retirement, and my sister and I for our future. We have lost money (in the past while learning the ropes) and we all just moved on because it wasn't any blame game it was just what happened. And ultimately whatever Mom and Dad get will end up back with us at some point.

That being said with an in-law I would have it drawn up, not because you can't work things out on your own, but there is more of a likelihood of hitting a financial speed bump and needing to have come to an agreement on how it will be dealt with before your emotions got involved and might change someone's perspective down the road.

Also every deal that I do that is partnered I go into with the understanding that I will walk away to preserve our relationship, and I am ok with it not being the best financial decision for me personally.

If my sister or I were married I would also draw one up prior to doing anything with her. Simply because while the deal may be between us there are now additional parties that influence the decision since there is a family behind the decision maker that might not have say in the deal but will influence the end goal for both of us.

Call a salvager in your area, they might take them down for less if there are materials they can resell as part of their profit.

I'm not a big time REI with a huge system and team I bought my first house in '07(guess what the ROI on that one is haha) that I still own along with a few others.

This is really partially a response to a few posts I've seen in the last week by people bemoaning the fact that they're about to lose out on their first deal, and sounding whiney in the process. This is the success story of how I lost one deal and got a better one within the same day!

Last week I got an email from a wholesaler in FL where I invest with a 3/2 under contract for 35K, needed a new roof and some drywall(from the roof leak), new vanities in baths, and an enclosed carport that needed some straightening out(or demo) so probably 12-15K or so for about $800/mo with no A/C unless I put in window units or was to add one(not happening) comps were about 60K-65K. Not bad, but not great either, but I had some money and been looking for something for awhile so I didn't want to keep having my cash sit idle so I was really considering it and decided to think over the weekend.

The day I finally decided I was going to pull the trigger, he already has a contract. That same morning while sitting with my coffee I had been goofing around on zillow looking at street view of the area, when I saw a 3/1 listed for 29K. Of course this listing is going to be 267 days old and sold already and zillow just sucks right? No it was less than a 2 weeks old, so I give the listing agent a call, it's a SS that is under contract but the inspection contingency is up today, and he'll let me know if something comes up.

6 hrs later I get his email blast to all the cash buyers he knows, I pick up the phone and give him a call. The property was under contract bank approved at 19.5K so my mom goes by the place to check the condition and phone walk me through the house, it's in a nicer better kept street than the first one so we already started well. Turns out it is actually a 2/1 with a large extra room(no big deal it's not a 3/1) this one has new roof and electric in '04 a new A/C system that is maybe 4 years old, and has recently refinished hardwood floors. It needs maybe 2 new windows, ,a new front door, the laundry room and kitchen need new tile and the laundry room needs new drywall so maybe 5-7K total for about $700/mo comps in the area were about 50K.

I say yes, she cuts him a check from my account for the EMD and he emails me the contract to sign and send back.

Oh and an added bonus it's zoned Restricted Commercial with non conforming residential use, so I'll have to find out what could go there, but there is a potential for future development upside, if not oh well it will still CF nicely.

I know that is a pretty long post but I say that for all the people starting out, don't worry about the deal that got away, or try to make something that's not turn into a deal just focus on the next one and they will come eventually.

I think his offer is pretty decent, how about look at this from another angle:

You can't finance the property any other way!!

It is a rare bank that will finance anything under 50K and that would be if it didn't need work. So you are looking at an all cash purchase price normally, instead you found owner financing, which is just about the only thing you could get.

You say you have great credit and disposable income, but how does he know that? Did the bank run your credit for the 15K line of credit? I bet so, so why is him giving financing any different? I run the credit on my tenant applicants, and they don't even owe me money or live in my property yet.

So that being said reevaluate and figure out what you can offer that he would be willing to accept. I personally would try 21K with 7K down 5% with a 7 yr term(assuming with such a low amount this is also the amortization schedule) and your credit report(this would be a non-negotiable deal killer if I was the seller).

Hope you can work this out somehow that will be good for you. And remember if this one slips by there's always another.

I request the applicant info from my PM and have never had them have a problem with it. Do I trust my PM to make a tenant decision, yes, do I trust my money, property with them as much as me, no.

Do they do a good job absolutely otherwise I'd find one that did, but I did have some training to do when we started out. Their first choice of tenant was not acceptable to me and another they were borderline on was a no for me also. Now that they understand my standards I think in the future we can just do an email verification prior to signing a lease.

It will definitely be very regionally dependent. Mike Franco was saying they don't include fridges at all up in LA. I live in San Diego(about 2 hours south)and I haven't ever seen a single rental that didn't include a fridge, stove, and D/W if there was a spot for it in the kitchen. W/D is about 50-50 whether or not it is included.

I think it is mostly due to the large military population that move after every deployment, change of duty station or advancement that starts paying more and want convenience. Even ones that buy a house and own appliances I think sell them if they move just so they can have new ones and don't have to deal with packing them across the country.

3 things I see just real quickly looking on zillow.

First recent sales:
There are 2 sales on the same street and 4 within a few blocks in the last 6 months. None of those was over 75K, 1 was for 59K this was the farthest away and I am unfamiliar with the area so it could be a bad comp but it's only about 5 blocks so not that far away either.

Second Active Listings:
There are 3 houses for sale on that street, and this one is the highest list price. The lowest one is listed for 62K and appears decent probably needs carpet and paint.

Third Rent amount:
The active 62K listing says it historically rents for $700 so he may be priced too high for the area.

Rentometer shows $800 to be median price so maybe it is ok.

I know nothing of the Phoenix market and just got this info from free sources. It could be an ok deal but he needs someone that knows the area better and can really tell him the real story. I wouldn't like the numbers myself but if he does then that's fine, but I don't see it being a deal when you take the other listing and comps in the area into account.

Erika you also need to be ready to move if you do buy this home as owner occupied. I see that you have a location of Maryland but the house is in NC. If you buy OO you will have to move in within 60 days so be prepared for that in your planning.

Give her whatever your required notice is to fix the issues, or you will be calling someone out to do it and charging her for it. If she fixes it great have a talk and say you expect to not have issues again, if she doesn't use that as your reason to get her out of the unit now rather than later.