All Forum Posts by: Michael Lauther

What is the typical minimum loan offered on 1 - 4 family homes ( will be owner occupied) to low and moderate income home buyers? what credit score would they need? what down payment would be required? Does the amount vary by state? I want to see if it makes any sense to market rental properties after rehab to current tennants.

David, thanks for the eye opening numbers.

Jon : i have considered pulling some of my capital out of my IRA to buy realstate and use leverage but i have found that you need to purchase a more expensive property to get competitive intersest rates. More expensive realestate in upper income neighorhoods have not produced the income that lower income neigborhoods generate and generally are hard to find using the guidelines of 50% for expenses and 2% for rental income.
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While I am primarily a buy and hold investor in my IRA, I would consider selling this property to another investor looking for a turn key opportunity. 30K would still net more than 10% for the new investor and give me an opportunity to purchase 2 more properties and repeat the cylce. the key to this strategy is to have a reliable rehab crew and do a good inspection of the property prior to making an offer.

Currently in a deal that required me to buy a defaulted note and negotiate a deed in lieu.

orig note 32k
paid 1500
pd 2500 finders fee
pd 6000 taxes
pd 8000 rehab
pd 800 water bill
pd 200 dep util
pd 100 title

all in for 19100,
annual taxes 900
annual ins 600
prop mgnmt 660
maint 660
vacancy 660
tot exp: 3480 rent 550-650 tot income, 6600
return on invest, 6600-3480=3120
3120/19100= 16.3% cash on cash return.
this is based on min expected rent (not rented yet), and no additional problems with rehab. (8k includes having to replace wire that was stripped )
return would increase if we can get higher estimate. estimate based on local property management company.

Elizabeth, check out John K on bigger pockets, if i remember correctly he has some free spread sheets that might help.

Welcome to Bigger Pockets Dvorah: thank you for your insightful thoughts on my post looking for Properties in Dayton. I am looking into the properties you emailed me. I am trying to learn as much as I can about the various Dayton neigborhoods. Currently I own a small property on Sheridan Ave and I am testing the waters for more investment .

Charles , we look forward to seeing this rehab in progress.

I have been using Equity Trust for a little over a year. they have been excellent for processing promisary notes and so far good for purchasing non performing mortgages and realestate. they are willing to set up a LLC with check book control but will only allow lme to fund 1 and only a one time funding. I have not done so as of this post. check thier fees , based on amount invested and of course they have fees for expitdited service and to wire money. I had also set up a plan through guidant financial to purchase a busness but the opportunity turned bad and we never used the corporation. the set up cost was steep. $5,000 but the service was good as far as it went. hope this helps

Sorry for any confusion, the short note about Memphis was directred at Bill Morkes. Not the fist time i have had too many Bills.