All Forum Posts by: Mehran K.

Is the $1k/month the full PITI (Principal, Interest, Taxes, Insurance) or just the P&I (Principal&Interest on the loan)? Make sure to get a full copy of the loan terms so you can verify this all, 

You wouldn't need to cash out the loan no. You could definitely assume it subject to. On refinancing, just know that if the seller has a $150k loan balance, and the comps are $160k-$180k, it may a pickle to refinance the loan because of the appraisal and LTV (loan to value) requirements.

$1100-$1400 is a big range, narrow that down and be conservative. do some research on craigslist, rentometer, etc in that general area for similar properties. I repeat, be conservative just in case! 

Get a handle on how much all those fixes are going to cost you so you can evaluate the deal better also. Since it's going to be a rental, be sure not to over-rehab as if it was a flip!

That's a great idea. You can do a lot of education while you're saving the war chest also. I wouldn't save one big stock pile of money then start making many purchases though. To me the picture looks like this: Once I had enough for the first one to be made safely (down payment, rehab, reserves etc.), then I'd make a purchase. The cash flow from that 1st deal will add to the amount that you can put into the war chest each month. When you can safely invest in deal #2, do so. With each property purchased you'll accumulating acquisition funds faster and faster.

In this long-term safe strategy, keeping your expenses low while you're income is increasing is important! Who knows, maybe later down the line you'll be more comfortable doing low/no money down deals when you have a few deals in your portfolio :) 

Reserves are imperative. I've made too many acquisitions recently and my liquid reserves are quite low and I'm feeling a bit of anxiety because of it, to be honest :). Though I have untapped credit card limits and a 401k to borrow from for emergencies, I prefer to have more cash on hand. I'm going to scale back and let the war chest build up. Just some food for thought and a little self therapy on this post!

As long as you have the same purchase agreement that all the realtors are using, and a good title company, you should be good. I've purchased quite a few properties with no realtors involved, not required! Just be sure to fill in the purchase agreement properly, and really read through the document so you understand everything in it (contingencies,  deadlines, etc.)

@Chai Sag  It's not going be that easy, come on! One thing I noticed after the crash is how TRUE it is that most people freak out when prices are falling/the media is reporting panic. I also noticed that all the smart investors went on a buying spree and made mass amounts of profits. 

If you're looking to play that game, I'd say just make sure you have a big capital stack, or access to capital that won't be scared to buy when everyone else is running away. Next time there is a down turn, go shopping! 

I did this, and still am doing it, in a midwest market. I wish I had the knowledge to take advantage of my local market (SoCal) the same way before the prices rose again. I missed the boat on this cycle here, that won't happen again!

@Ben Leybovich  Poor Ben, the hunt for that big syndication deal is driving you mad :) 

That sounds like an awesome plan to control the property without having a down payment or needing to get your own financing. Some thoughts:

• Are you looking to keep it as a rental? 
• Will you be refinancing it or selling it after you fix it up? 
• The mortgage would be $1,000 a month, how much do you think you can rent the place for? 
• What kind of fixes does it need? (aka. how much will you need to dump into the property) You say he owes $150k on the mortgage, what are the recent comps selling for? 
• If you're looking to cash him out of his loan eventually, are you able to obtain financing later down the road?

Just throwing questions out there that need to be answered to evaluate the deal better.

I've never done any wholesaling, but I was under the impression that wholesalers are typically not buying, just tying up properties (via contract) to have other people buy them.

With that said, I have only seen REO's in my market (where I live) and where I invest listed on the market by realtors. It seems like a daunting task to line up a wholesale deal when they're being sold off in that fashion.

Depends on if it's a rental or not! If it's a rental I'd leave it the way it is. The green room might have to be painted for potential tenants as it might steer them away lol! The living room that's painted yellow doesn't look bad at all.

On day 1 of closing you meet with them to get a new lease signed. If they are not playing ball, start the eviction process. Since there is no security deposit, be sure to factor (to your analysis of the deal) in at least a few thousand you'll need to keep in reserves for any repairs.

I have seen in many states that if a person is looking to move into the property to live in as an owner-occupant, they have the right to do so regardless of a lease. But like @Jeff Rabinowitz mentioned above, if they're uncooperative, they'll need to be evicted.

I have heard The Norris Group is top notch.