All Forum Posts by: Nick L.

I agree that the SOWs can be conservative but ignore the cosmetics. 

I would add that if you plan to use the Rental Rehab Program's forgivable loans to fund the rehab, that program has separate and higher standards such as lead abatement which quickly eat up the funds.

@Jeff Plair If you're looking for traditional 25% down financing, you will have to pay a maximum of $14,285 per unit. Is that feasible in your target market? Or do you have a different approach to financing?

@Jeff B. Yes, non-recourse loans are normally assumable. The whole point is that they are underwritten to the property alone so it doesn't matter too much who the borrower is. Of course the lender reserves the right to approve the new borrower but there is not too much scrutiny.

@Jeff B. I am not an expert but I think the FNMA programs require 20% equity from the borrower. Of course you could always supply that equity initially and replace it with a mezz note once the primary note is in place. A specialist loan officer might be able to suggest alternatives.

@Mark Waldrip

I agree with @Michael Boyer and would add that you need to know who owns the other units in the complex. 

If the majority are owner occupied, the board could change the bylaws to prevent or reduce future rentals. If the majority are investor-owned that is unlikely to be an issue.

Retail sales will always be an issue since one investor owns more than 10% of the units. So the building cannot be GSE-certified. 

@Eric Renney Just curious what happened with this property in the end? A NY Times article suggests that the homeowner may be correct that the mortgage is no longer valid. 

@Robert Taylor @Dawn Anastasi @Dave Carpenter and others -

Do you have any experience at the Waukesha/Ozaukee/Racine county sheriff's sales? Are they less or more competitive than Milw county? What about outlying counties?

@Robert Taylor Well your story of failure at the auction outdoes mine! Glad it worked out well in the end.

I think you're onto something with focusing on higher priced properties. There is a lot of competition in the $10k-30k space but not a lot of people can (or want to) come up with $250k+ in cash.

I noticed one very nice looking Shorewood property in today's listings. Assessed value was $375k and opening bid was $275k. I didn't do any due diligence as I had no intention of buying, but assuming title and physical condition were decent it looked like an easy $50-100k flip. I didn't stick around to see it sell but I'm betting it went to the plaintiff.

Here's a question... if you could successfully line up financing in the period between the sheriff's sale and the confirmation hearing, could you close with bank financing? Or does the process specifically require that you close with the cash that you prove you have when you win the bid?

Thanks all! Good philosophy @Dawn Anastasi!

@Ron S. "Bring more cheese"... sounds like the Notorious BIG... "Touch my cheddar, feel my Beretta"!

53204 is very mixed. 

Anything east of the freeway overpass has a good shot at being up and coming. S 2nd is HOT and so are the Freshwater Plaza area and the Inner Harbor. There are several new developments coming along National around 5th.

Anything west of the freeway is strictly Class D territory. I'm guessing that's where you are seeing high crimes.

As to your strategy, since you're a qualified engineer you could consider picking up buildings with structural issues and using your expertise to get them fixed up cheaply and well. You can often spot these buildings due to precipitous price declines on the MLS as potential buyers run away. Often they're not as bad as people think.