All Forum Posts by: Page Huyette

The bank that owns the property couldn't pre-qual us because their requirements are much more stringent than the lender I'm working with. So, they've stated they can't provide an answer without a full application. I'll be attaching that statement with our offer and pre-approval from my lender, if I decide to move forward with this one.

Thanks for all of your answers on providing details to back up my offer: I'll attach a pdf with a basic spreadsheet for repairs

One issue I can't resolve which is frustrating is water cost. The units are all separately metered for gas/electric but there is only one main water meter. The property also has a coin op in the basement (separate gas/electric meter). I can't get past utility bills since its bank-owned, and the agent had to evict the tenants before taking over the listing, so the only water bills I have are without tenants. I do have bills for gas/electric.

If I estimate high on the water, it really digs into my cash flow, but I don't want to assume they are lower and get caught with outrageous bills. I'm looking into submeters--anyone care to share if they've had success.

I'm posting another topic on the coinop that is installed, to try to get a handle on how that will play out.

In our downtown, it's chickens that get the wrap instead of pit bulls, so pick your poison.

If you have a better prospect I would suggest renting to them instead. That comes from an investor standpoint, not a personal one. I have quite a few friends who have had pit bulls and they are wonderful, but like any animal, it can vary. This is business.

Visit with the owner and dog if you are wavering and can't keep emotion and equality out of the equation, and you'll figure it out that way. If you are comfortable around animals, bring another dog with you. Are there cats nearby--how is he with cats? Where did the dog come from--raised from a pup, grabbed from a puppy mill?

After the visit, if the dog and tenant are great tenants for your place, you will know right away and it will be smashing. If you're nervous and uncomfortable...not so much.

He likely knows what he's taken on in trying to find a quality rental, so don't feel like you have to solve all his problems for him. Good job looking at all the angles--keep at it.

Thank you to all of you who have provided advice in this post. I am humbled and grateful that you've taken your time to share your advice. Here's where this this deal stands as of 9:41 Mountain time today :)

Instead of hard money, I'm looking into pulling equity out of our primary residence for the down. Looks reasonable as a way to come up with the down. I can cover the loc payments plus paying some extra principle and still cash flow with piti, maintenance, vacancy, etc.

Viewed the interior and detailed exterior of the property today, and it needs $15k repairs if done by us (we are contractors) with another 7-10K down the road if we want to increase rents. Those numbers are generous, giving us some slack to sub out some work if needed to get the rentals filled earlier. But, still reasonable.

The property is bank-owned, so we'll need to fill out a pre-qual letter with the bank. I've encountered this before, and assume they don't want to waste their time reviewing an app for someone who isn't qualified.

My question to experience BP members: If I'm working with a local bank already, can I include pre-qual info on the offer instead of jumping through their hoops? I won't make an offer unless I'm confident (as much as one can be) that we could make the deal fly this way.

ALSO--The property has been listed since Oct. 2012 at 249k and just had a price drop this week to 242,500. There have been several second showings. I'm assuming, based on my research, that it will go under contract within two weeks, likely much less (oh, the drama!) It needs work, but for the right buyer, it could end up being a nice property without a lot of time passing.

The agent suggested that we provide a spreadsheet of anticipated costs with our offer, since she feels the bank may not fully realize what improvement it requires.

What format would you suggest I use for the spreadsheet? I've already put together a spreadsheet for our personal use, and a spreadsheet of what I anticipate the lender would understand.

Anyone out there have experience submitting this type of paperwork with an investment offer? I'm not worried about showing accurate costs, just want to get ducks in a row.

Thanks guys!

Ben, I appreciate your frankness regarding private money. I'll look into some of the other options you've proposed, including talking with a local banker I have a relationship with.

Dang Tim, that there's some good hard facts you are presenting.

That's what I thought the case would be with a traditional lender. What are my other options that are reasonable. I'm the sort of person that doesn't give up easily :) Can I do a 60-day seasoning on private money funds paying interest with an incentive?

Ok. I'm looking at bank financing, not private for the note. Just private for part of down payment and repairs.

Thank you--

Gene,

That's part of my question. Since the private money wouldn't be a partner on the loan, how is that money stated--personal savings, gift, ???? That's where I get lost. Banks like to know where the funds are coming from, and I want to be transparent but not stupid.

When you refer to the title and hazard insurance, how does that secure their loan with collateral?

I like your pitch ideas--thank you. I'm quite comfortable speaking in front of people, but it's funny how new approaches can trip you up sometimes.

I've been in the process of putting together a private money info packet, as I've not used anything other than conventional financing to date. HOWEVER, this deal has presented itself to me before my ducks are in a row, and is currently in the "too good to be true" category.

I'm still doing my research and have yet to apply my complete skeptical eye on it (i.e.: my contractor) but right now this looks like it could be my white whale if it pans out. I don't want to pass on it just because the timing is a little off.

It's a triplex, bank owned, which the numbers showing decent cash flow with room for raising the rents without much work. I'd like to make this deal work using private money for the down payment, financing the rest. Here are my questions:

1. I can't seem to come up with some natural jargon for friends and close colleagues to approach them about private money lending. It seems forced--anyone have an elevator pitch they'd care to throw at me?

2. As incentive for loaning the money, how do I offer them collateral? First lien? What if there are multiple investors? What's the best way to structure this so they have confidence in the deal and I don't have to take on a partner.

3. This is the first deal I'll do without actually living in the property (though I am considering doing an fha and living in it, but not my first choice due to pmi) so how do I complete the loan paperwork with the bank--it's a legal triplex but currently vacant due to a foreclosure a few months back. Would the bank look at rental history from the previous pm and take that into account.

Excited about the possibilities with this deal. Thanks in advance for any feedback or advice.

I think Bill G summed it up pretty well, especially "Make out written instructions about the maintenance of a pool and make it part of the lease." The additional covering with their renters insurance is great also--just a few $$ a month at most but covers everyone's peace of mind.

The first thing that popped into my head regarding how to handle this is the rental agreements I sign when renting vacation homes that have a pool, nice hot tub or other ammenities requiring attention and regular maintenance. The lease always explicitly spells out the renter's responsibility in simple language while also notifying them of what the off-hours costs will be if a professional needs to be called in. In other words: do this and this, or it will cost you this. Please enjoy your stay.

How about treating it this way: spelling it out in a separate addendum, doing a pre-scheduledwalk-through showing them the steps and also requiring a professional cleaning every 3, 6, 8 months (whatever you need) if, and only if, a very clear checklist hasn't been met. This way it is up to them, or they can say "let's pay for it." But, don't slack.

I also agree that that probably shouldn't be renting a place with a pool if they are lowballing the rent, but you may need to get creative depending on your area. This seems like one of those "ugh" situations where things aren't going as you'd like but you need to be flexible to make it work.

I think its great you are considering all options.

Glad you posted this Mark. I've been bouncing around the idea of getting into property management, and after being on BP have decided this isn't the best tactic for entry into my market. So lately, I've been thinking the approach of getting my re license is better, but I have some of the concerns you've laid out--monthly costs and other things.

Another thought I've been pondering -- if you're an investor and an agent, what's the best way to network with other agents without them viewing you as competition? I'm guessing you want to clarify your investing niche, but wondering how others have done this who have their re license. Thanks for posting.