All Forum Posts by: Cheryl C.

I'm in my early 50's. I'm paying down my mortgages at a fast clip. I want them all paid off by 60 so I can start selling and holding the paper. Thoughts on this strategy?

I'm not sure what rate/terms you would be looking at. I have to go commercial because I have too many mortgages.

I've been helping my 25yr old niece get started with RE. She bought an reo to live in in early '09 and recently converted it to a rental and bought another reo to live in (went FHA) in a nicer community, closer to her job.

The piti on the rental is $650 and the rent is $1,200. I found her deals and walked her through the process. I just found a condo (reo) for my 22yr old son. He had a 30% dp and he got financed thru the commercial bank I use. I got him some great tenants (lifer's imo) and he is clearing $350 a month. He graduates from college this month.

A rental loan will require a higher dp and higher interest rate. We did well with the "serial" moving when we were starting out and had no $$$.

Not everyone's cup of tea, I realize.

Tony,

Amortized over 30 doesn't really matter to me. It is good for you if you need/want the CF. I just like owner financing. No points/lender fee's, loan app, appraisal, etc. I'd make sure it's assumable - that will be your "out" if you need to sell. Another investor can step in. I think owner financing is terrific. We had a similar lending environment in the early-mid 90's. Owner fin. won't show up on your credit report and the terms you laid out are very good in my opinion.

I'm not the best investor. I've hit some home runs, but the rest is just "bread and butter". I'll accept a decent deal rather than knock myself out for the "best" deal. I don't like to work too hard or too much. Having 20 tenants buying (or having bought) properties for me is fine. I've also done some pretty good flips. I've had over 100 transactions. This is a retirement plan for me (us). I plan to sell and take back mortgages.

Tony,

90K @ 5%, amortized over ten yrs is about $900 per month. You say rent is $1,200. I don't know what taxes and ins are. If you only have 10k into the deal, these numbers look good to me. Everything depends on tenant selection and turnover. You indicated "move-in" condition, but I don't know the life of the hvac, roof, etc.

I'm fine with a property that will pay off in ten yrs with only a 10% down. This is hard to find in the DC area.

As far as "get out tomorrow", my financial situation is alot better than it was 25yrs ago. I'm more interested in getting good tenants to buy houses for me. I don't need the cashflow - but want places to be paid for in 10-12yrs max.

Investor's can't usually get 5% financing w/no points, lender fee's, etc. If the property fits my criteria, I'd be very interested.

This is more of a "funny" story (I have plenty of war stories,too!). I was buying stuff at the Courthouse around 2000. One place up for auction was a condo (lux) in a development that I was very familiar with.

Turns out it was listed in the MLS. I contacted lister and toured it. I didn't mention the foreclosure auction because many seller's don't tell their agents. If the agent knew, she might have been able to get the sale postponed.

Well, the place went UC immediately and the lister called me to tell me. 3 days later I bought it at the Courthouse. I called lister on my way home and sold my contract to her buyer's for 10K. Not huge bucks, but fun stuff anyway. I didn't have to close or anything - just sold the contract.

Hi,

A note on "Realty trac". This is just my personal experience. I signed up and started reviewing their listings. Old, old, old. They don't seem to update. There was even a place listed that I had purchased months earlier. It was still showing as Bank-owned (not even LISTED). I cancelled. Maybe they have changed this or my experience wasn't reflective of their services in general.

Hi Tony!

I love owner financing and agree with Bryan that there should be a price/term trade-off. I also find Aaron's hard negotiating on rates interesting. Myself, I'd probably jump on the 5% if you can get him down to the 90K. A 10yr balloon doesn't bother me as I would probably have the place paid off by then based on your CF analysis. I'd want that loan to be assumable. If he is really stuck on his number, perhaps you want to go back to him with a lower interest rate (ala Aaron) or longer balloon. or both The problem is that you won't have an "I can get out tomorrow" purchase price. This used to be very important to me.

I've also done the discounted pre-pay; usually when I plan to sell! Good luck!

I've only had to use hard money a couple of times. As was mentioned by many, it's best to use cash if you've got it and it all depends on the numbers - the individual deal.

What I did a long time ago (mid-80's), after we had a few deals under our belts, was put together a plan and visit several small local banks to set up financing, lines of credit, whatever I could get. I got some doors closed in my face but eventually established a relationship that has served me well for 25yrs. A quick e-mail and I can close in 7days. I usually put 30% down and get a 5yr - now at 6.25% with 1/2 point. They don't even do an appraisal - just check comps, if anything. These are buy and hold. I used to get 6mos flip $$ from the same bank at similar terms.

If I were starting out, I would try this avenue. During the 125% heloc days I got a stack of checkbooks from putting heloc's on everything I could. This avoids a ton of closing costs on flips.

This is how we started out in our (very) early 20's; we searched and bought fixer-upper's at great deals - 5% down. We fixed places up and moved on. We kept the places as rentals as we had the good owner-occ financing. We sold/flipped a few to get some cash. Then we did some 1031's to add leverage. We had 12 rentals by age 30. So I'd go with owner-occ and then keep the places as rentals.

This 2 yr stuff is an over-reaction imo. Same as the early 90's. So I don't know if it is possible to move every year and have the rent counted. Back in the day, they only counted 75% - so if you had alot of rentals, you didn't "qualify" on paper. That is when we went to owner-financing for awhile.

Asset managers seem to pull this stuff alot. On some of my deals I think the price was good and we had a verbal. I'm in the middle of one now. They want 10K more and I believe the agents will kick in to get the deal done. I may take it anyway. I've walked on some.