All Forum Posts by: Mason V.

 Short and too the point. Thank you very much. :)

I have talked to three hard money lenders today and each wanted 20%-40% down for a rehab. I understand the idea of having skin in the game. But, If I am going to be putting that much down I might as well just get an FHA 203 loan when I qualify in eight months. The down payment, to my understanding, kind of defeats the whole purpose of using hard money to begin with. I am really running out of options. May have to break down and find a partner, really not something I want to do. Although, there's also REITs.

Well, here is a rough draft of the letter I will be sending the city council. Is there anything I should add or take away?

Dear [insert council member’s name],

The Dalles is in desperate need of affordable and well maintained housing. Having returned home, from Portland in July of 2014, I have noticed several positive changes made to the city. However, affordable housing is one area that would still benefit from some attention. That is why the miss zoned duplex at 814 Court St must be given a zoning exception and allowed to once again be utilized as a triplex.

Allowing for the property to be retro zoned back into a triplex would allow for another affordable housing option. From my own experience much of the affordable housing options, those priced under $700.00, are not well maintained and leave much to be desired.

The triplex on Court St, however, is in an ideal location. The sellers have kept the property immaculately clean and fully updated to today’s standards. With easy access to Downtown employment, and ample parking, it is the type of location my fellow citizens would be proud to live in.

Not only will the future tenets benefit from the increase in affordable housing, but so will the entire economy at large. At rental prices go down the amount of expendable income available to individuals and families goes up. They then have more opportunities to frequent local business, contribute to charities and enhance the economy of The Dalles. Tourism is a fantastic addition to a community with such a rich history. However, a self-sustaining core economy must be the foundation of which tourism is built upon.

Finally, the tax revenue collected by the city has made it possible for the city council to guide the progress of The Dalles for the better. With the 814 Court St property being retro zoned back into a triplex, so will its property taxes be improved. This will allow for additional funds to be spread out among the schools, fire department, road construction and other social services provided by the city.

When I moved back home I made the active decision to provide The Dalles with affordable housing. In my own situation it was only by word of mouth that I was able to find an affordable place to live. Most of the conventional methods of rental shopping yielded nothing in my price range. This personal experience is why I know that the duplex on 814 Court St must be rezoned back into a Triplex. The current owners have already made the present units affordable. Yet, the city will receive a greater benefit when I reactivate the third unit after purchase.

Signed,

Mason Valenzuela

welcome! That's all. Everything else has already been said. Um...consider joining nwreia, they have tons of meetings every month.

Yesterday I went and looked at a 1bd/1ba duplex, formally a triplex. Both units appear in excellent condition with my only complaint being the 10ft ceilings. More than likely my initial bid will be 125k with 128k being my upper bid for FHA. Above 128k FHA does not cash flow and I would need to get a partner.

In either case through, whether this duplex is a great or mediocre deal depends on the third unit. The third unit had been in use at one time. However, after the tenet moved out the city rezoned the property as a duplex. Sense the unit was unoccupied, they were taking their time remodeling it, there was no way for the third unit to be grandfathered in.

According the realtor I have three options. First is to leave the duplex as is. Second is to try to persuade the city planning department to rezone the property back to a triplex. Third is to petition the city council to supersede the zoning and allow me to return it to a triplex. I am thinking the city council is the best bet. What would be the best way to approach them?

 I pretty much am patting my self on the back and the program did almost all the work.  With my horrid social skills getting this far is am improvement for me so I am taking any small victories I can to boost my motivation.

As for other business, no. I started putting more effort into this sense about November and it feel like I am trying to climb a 90 degree cliff. On the bright side I have already gotten farther than the vast majority of the American population ever will.

I should have asked this before Thursday but, oh well, I’ll ask it now!

This past week I found a potential duplex in a decent part of town. I asked the listing agent for rent, costs, remaining loan, etc. she returned all the information I needed along with the home inspection done by the previously interested buyer.

That inspection is where things went downhill fast. Just from reading that document I am surprised the place has not been condemned. There are foundation issues, roof issues, plumbing and electrical issues, all of which apparently have not yet made it unlivable. This was the first home inspection I’ve seen so maybe all are infused with such doom and gloom for the property.

After reading the inspection I ran the numbers on the two legal units. There is a illegal studio sitting on the roof that had been rented out, including to section 8ers, supposedly. Being illegal its numbers were not factored in. anyhow, after running the numbers through the biggerpockets rental calculator I realized the property does not work at the price. I actually ran it at 20% down, 50% down, FHA's 3.5% down, 0% down via hard money+ 6 month refinance, 100% down and FHA 3.5% at a price of $115k. the second FHA calculation is where the property would begin cash flowing at $15 a month for the entire property. As for the other calculations, only the 50% down and 100% down produced any cash flow.

Sense I knew I could not acquire the property, and knowing it had been on the market for well over a year, I told the listing agent that I was backing out of the $150k price. In addition to backing out I emailed her the numbers I ran as well as other factors that I felt the seller should consider. Supposedly the listing agent has tried to get the price lowered, but apparently they seller will not budge even though the remaining loan is supposedly around $70k. (I have trust issues and tend to use "supposedly" or "they claim" a lot.)

Below is the actual email I sent…

From the numbers Ive ran the seller needs to find a buyer/investor who can make a down payment of at least 50% or more for the current $149,900.00 price to work. The following are examples of 4 conventional financing options, a basic creative financing option and what the price needs to be for a FHA loan to work.

To make it clear I am not making an offer, I just think the seller should see these. I would have liked to try the FHA or the refinanced hard money but they both end up with horribly negative cash flow at $150k and FHA barely cash flows at $115k. Obviously, if the new owner raises the rents the numbers will improve. However, having not gained my first property yet, I have no idea what a reasonable increase would in order to run the numbers.

Additionally, none of these take the studio into account. I am personally not willing to take the risk of the city having a fit over it without talking to a lawyer first. 

Finally, none of these examples take into account the potential work needing to be done on the property which, from the sounds of it, could be very costly.

I am interested in the property, I just cant do the price of $150,000. So until they lower the price enough, I wish them luck...

So did I educate the seller correctly or could I have done it better? Should I have not even wasted my time?

I live in the dalles and may be willing to do some foot work for ya.  I would think the two primary areas in my region are the tri-cities and bend.

so long as they don't populate my coast I don't care where they live. I would crawl into a corner and cry if the Oregon coast became as developed as the californian coast. Hands off my coast!

So far this is the list I have come up with. Is there anything else I need from them?

Tenet history/rental agreements for all units going back preferably 5 years.

Rent rates for all units going back preferably 5 years.

List of repairs and updates, with costs if available, going back preferably 10 years.

Property operating costs preferably going back 10 years.

Reason as to why seller is selling.

Known construction issues that need to be addressed regardless if minor or major.

If property is paid off and, if not, how much is still owed as well as if there are any liens against it.

If seller is on a time table for when they would like to be rid of the property.

I would like to see the sellers schedule E tax form prior to closing.