All Forum Posts by: Jeff S.

Zach Sikes - You can buy "subject to" in Oklahoma. If you go directly to the bank they will run you through the qualification process just like getting a conventional loan. Only difference is no fees or closing costs if they approve the assignment. We looked at one through Wells Fargo a few years back, not sure if other banks have the same guidelines. I've seen a lot of people advocate not telling the bank and just keep paying the bill. And you will see many forum threads on the con's of that approach. In our case the seller needed the loan off their record to purchase a new home so we went through the proper channels to make that happen.

The opening offer would depend on how much you need to make from the investment to make it worth your trouble. From the numbers you have up there I see $200k less $194.5k (168.5k+26k) yielding a 5.5k profit. So, 5.5k plus whatever you can get below 100k is your expected worst case profit. IMO, this is pretty slim. OTH, it looks like your upside could be really nice since you are planning to profit from doing the labor as well. I'm a fan of worst case planning since it's hard for a seller to ignore your calculations (basis for your offer). But if they are not flexible (motivated) I wouldn't sweat this deal after you make an offer. There are plenty more out there, maybe even the ugly yellow one across the street?

Please keep us updated on how this goes!

Michael Garson, both look like good plans. I'm not familiar with Philly, but with Option 1 is there a garage with the house? How much equity are you planning to lock in if you buy it?

Option 2: Does the first unit's rent pay for the PITI and your utilities? How fast do two units stay on the market in that area?

Then the other question is: Which of these will allow you to save up for your 2nd investment faster?

Josh James - What are your plans for the house (I'm assuming resale)? What is your detailed cost out of the rehab? If you over-estimated, what did you use to base your estimates on? I would ask the realtor how long comp houses stay on the market there. Also, need to include an estimate of your holding costs. How are you financing the deal? All cash? How old is this house? Your realtor should be able to run some comps for you so you can can determine a reliable ARV. Sometimes price/sqft can be misleading...especially with larger sqft homes.

If you had to dump the property fast, what do you think is the most you could get for it (fully rehabbed)? Just looking at the cost + estimated rehab you are looking at $160k sunk. If no one is going to buy it for more than $200k there isn't much wiggle room after holding/selling costs are subtracted from the deal. But after, you get the comps for a real ARV then you can adjust your offer accordingly.

Welcome to BP Felicia Woolard!

Glad to hear your property escaped the damage. Why the switch to a larger market? Was the base not providing the best tenants or not enough responses?

I'm no expert in mobile homes, but it sounds like a nice size double wide. Tax office assessments are not usually reliable in my experience. Have you tried to run comps on it? That will let you know pretty quickly if it's a deal.

David Schneider, You may want to visit www.sos.ok.gov - Oklahoma secretary of state website for a complete explanation.

To open a DBA bank account and such you need to file a "trade name report" which is $25. Filing for an LLC is $100 plus annual upkeep of $25 per annum. And doing business in your own name is free (as far as filing goes). So, if your going the LLC route anyway you may want to save the $25 and put it towards the LLC filing. Ned is right, if you don't have a lot of personal assets at the moment then you don't necessarily need an LLC's liability protection. Saving the $100 and putting it towards your marketing budget may be better use of funds in the short term.

Any fictitious name should be registered with secretary of state. Registering for an EIN and with the OTC is free as well. I don't see any problem with doing your first deal in your personal name. I'd be interested to hear if anyone else disagrees. Doing business under a name other than your legal name before owning it is illegal (Title 18, Oklahoma Statutes, Section 1140) and would raise flags if I was buying from you, but not everyone does due diligence like I do. Have you searched to see if the name you want is taken?

It seems like this would work, not really that complicated. Is there a large difference in premium for increasing liability coverage vs starting another (smaller) policy?

As far as how income flows: It seems like you want the management company to act just like a normal PM. It collects a fixed fee and has a built in "cost plus fee" for organizing subs to repair the property. With a major expense, the PM would wait for the owner (lets say LLC #1) to give them the cash to pay for the "cost plus fee". Then LLC #1 would treat the major expense the same as it always would (Capex, repair, ins, etc). If you model your mgmt company to have going rates you may be building a business that can let you replace some of your duties with an employee. I think as long as your management fee is at market rates you are monetizing the "headache" portion of your business. Was there some other concern that I'm not seeing here?

I would say go with your first thought, and keep them pet-free. Just let the current tenant know that she is grand-fathered in with a sweet deal (no pet deposit). I'm interested to hear from others if that would be discrimination to deny her moving to your other unit based on having pets. But that's the angle I would play.

Thank you Mark Turner for this post. Please keep us updated on your process, I'm very interested to hear how the cold calling goes.

Here in OKC I had done a similar request from the county office (out of state owners of apartments only), by phone, and they had all the data points I wanted, but it was $80 for them to drop it in excel for me and copy to a CD (this was back in 2005). Not a bad price for the complete list organized like that IMO. My marketing results were dismal; I narrowed down the list to 80 and only sent out one wave of letters. I got two replies, one was to stop mailing them, the other was an unmotivated seller. After reading your post I'm ready to try again. Thanks for the motivation!