All Forum Posts by: Nathan Grabau

It sounds like you are on the right track to me! While I am not familiar with how much more money you will get for your current home as a STR for the extra bed and bath, skipping that reno might be worth considering to help give yourself more margin of error on future deals. You can also always do a light reno today, and then do a more significant one further down the road. Having more cash 6 months from now could give you some more flexibility than and extra bedroom and bathroom!

Either way it sounds like your plan is well thought out and it is incredible that you are moving your life around to help your family! 

I just joined Keller Williams, and while it is normal to have to pay for your own things, like everything, the 46/ 54 split seems really high, in favor of the office. Are you getting coaching included at that rate? What is the cap? 

Do you have a local Keller Williams? I just got my license, and went through the process of joining Keller Williams and they have been amazing! The training at KW is amazing too! Send me a DM and I can get you hook up with a local market center! 

Quorum Federal Credit Union does! Not a great LTV but I think you can get to 70 or 75%! If you send me a DM I can send you the contact and the application link for the person I have done 2 on my primary with.

Typically construction loans are short term debt, but some have construction periods and then automatically roll over into a longer term fixed rate loan, this will be hard to find though. Most of the time too it is pretty hard to increase the value of a property by the cost of the modifications you are doing. This primarily has to due with how appraisals are done and that ADU's do not really have enough comp data on them to support their cost. LA could be an exception. I would search something like "ADU financing" or "Los Angeles ADU" to find others in the BP threads who have talked about this in more depth.

@Dave Skow I have gotten their mailers on my house, and essentially when I researched them you are essentially selling them equity in your home. While I get the value proposition for some as an alternative to a reverse mortgage, I do not see how it is a value proposition to an investor. You are essentially giving equity away at a rate that is much more favorable for them than the current home owner. 

I am not a lawyer and this is not legal advice, but this sounds a lot like double or dual contracting, which is illegal in Colorado. Essentially you are defrauding the bank because they do not actually know the terms of the deal they are giving you money for. 

Now a lot of banks are okay with owner carry backs, so long as you maintain their DSCR requirement with both notes and they have the first position for liens on the property.

I am not sure how the lender would approve the collateral for the loan to go from both units to just one unit, that would be my primary concern. The lender who handles the FHA takeover if you go the official route will know if this is possible or not.

My biggest concern would be the people taking over the loan not paying and then both of your sides being foreclosed on. The lien also is not going to be transferable, so the advantage to you being that you could use the equity in the unit you live in goes away, because the lien will still be on your property. 

Legally handling the escrowed taxes/ insurance could also be weird, especially if either of you guys tried to transfer your interest in either half of the duplex in the future, like I think this would be almost impossible unless the loan had been paid off. 

Also, the tax ID's being separate do not really mean anything. The assessors records are what is going to matter. 

You also probably cannot qualify for another FHA loan while the first note is still in your name in the FHA's eyes.

I am experiencing 10%+ CoC in the Ames, Iowa market. My realtor there is also an investor/ property manager so it has made life very easy as a long distance investor. Send me a message and I can get you connected with him.

I particularly like the area because it does not have the declining economic opportunity/ population that many of the other good cash flow markets have, such as Detroit or Cincinnati.