All Forum Posts by: Matt M.

Michael O Sullivan the lenders I'm presently using are local to Louisiana. I would recommend a local lender to your area, so you can begin to build a relationship with them. Let them know your goals (outside of this FHA purchase) and learn how they would calculate rental income on other purchases. I see huge disparity between lenders on how they calculate rental income, I've just recently found lenders that understand rental income. I had to walk quicken through it.

I don't think they are scam artists, but they are less knowledgeable, and pushier than other lenders I have encountered. They don't like giving loan estimates. On the other hand they lend to me pretty easily.

Do you have language in your lease that stipulates "this agreement supersedes all other previous agreements". If that's the case you could do it now and just run a 14 month lease. Or, sign now, with an effective date in two months.

I'm wholesaling a deal right now only because the price point and exit strategies didn't fit my criteria. I never want to do it again. I've been wondering why anyone would ever primarily be a wholesaler. If you've gone far enough to get something off market under contract, and it's a great deal you should figure out a way to close on it yourself. For as many wholesalers as there are right now there are just as many embarrassing and unprofessional buyers. The issues with ARV and Repair costs come from bad information and wishful thinking. I'm a pessimist though so I'm generally underestimate ARV, and overestimate repair costs.

Michael Breedlove Louisiana favors the landlord. The state minimum is 10 days prior to expiration on a month to month lease. I personally would use 30 or more days, unless you know you'll be replacing all tenants relatively soon. Whatever the original lease stipulates is what I consider fair. It's also important to note that upon sale a lease is considered valid only if it had been recorded. So if you do encounter a unruly tenant on a term lease you're not necessarily stuck with them. Check with an attorney if this becomes the case as there are some other provisions that should be considered. Not sure if the units are separately metered but I like to close early enough in the day to make it to the water department to get the meter transferred in my name. Tenants not having water over a weekend is not a great start for a new owner. If you haven't done an estoppel agreement, at least get written confirmation from the tenants on their deposit, monthly rent, utilities, and appliances. I've seen some really shady things from sellers here. Congratulations, and good luck!

Scott, I couldn't agree more, tough to understand their motives purely from a REI perspective. That's a lot of work and risk for that level of profit. It starts to make more sense though when you consider a few things. 1. Figuring appraised value one year out is the most difficult part of this transaction. This is especially true in a neighborhood that's being redeveloped. They could have been hoping that appraised values were much higher one year in, or that this house could set a new bar for appraisals on future projects. 2. I see custom/luxury builders here with a staff of one or two that may do three projects a year. Low overhead, and they make enough to support their lifestyle and repeat the process next year. 3. It's a form of advertising for the builder, a flagship location and product that may lead to their projects. 4. Lack of other options, investments. They likely made more money on this than they would have placing their capital into rentals. All speculation and just past observations from my market. Our sales prices are much lower but on a percentage basis the land acquisition and construction costs are similar.

Looks like a great deal for the lender. It's hard to figure out, when you have that much square footage the PSF price on the expensive stuff, foundation,site work, roof, mechanicals are much cheaper relative to a smaller home. I would guess they were at $600k to scrape, permit and have plans. Financing costs of $75k potentially. Leaving 875k to build and profit. That leaves $151 PSF of cost. Maybe it could get done for $120 sf given the scale. $170k in potential gross profit. If they financed at 75% of costs or ~$439 they may have earned a 40-50% return on their money. 11.5 months is a great turnaround for that size project. A builder that self performs work could hit those numbers easily in my area. My experience in Denver is vacationing though.

Troy Knight the utilities can be underground, the the panels, meters, water heaters etc have to be above BFE. On a FEMA elevation certificate they document the finished floor elevations, and the lowest elevation of mechanical and electrical equipment.

I always try to get a quit claim from the owner first, once you calculate the potential legal fees, or consider that two different title companies may view the situation differently it's almost always in your best interest to get the quit claim. If the statute of limitations is 12 months to bring suit, I would ask the title company why they are insisting on a 15 year time frame. You need to understand how strong the previous owners claim could be in order to present the quit claim.

Booker Mcarthur I doing a cash out refi 30yrs @5.125% 70ltv and .25 PTs two family. I can't imagine why they would be so high.