All Forum Posts by: Phil Damjanovic

Matthew Cariello I'm financing. Got a 4% rate and the lender is waiving his fees. I just pay appraisal, inspection, and misc. recording and gov't fees.

Namon Thorn The seller picked the title company. It's Adobe Title.

Steven Johnson

I used HAR, Zillow, and Trulia websites to search. I did a map view search and put a filter on the search that filtered for MFs under 100k. I then worked my way through the ones that were in blue collar or better neighborhoods. I found a lot of dead ends - a lot of properties that looked good online but looked like garbage when I actually drove to visit them (usually in poorer neighborhoods). Unfortunately just about every 'investment' property in a good area was way overpriced relative to potential rental income. Whereas I can find 2-3 properties in transitional areas that might interest me every month, in well-developed areas that number has been 0 so far. Would love to get some finds in better areas too.

Hi all,

I've been reading BP for a while (lurking) and learning and am curently under contract on my first deal. I just wanted to share this on BP.

It's a duplex in Houston, 3bd/2br on each side. The neighboorhood is what I would call 'transitional'. The current owner paid $65k and says he put put $6k of rehab work into it. The units are in nice shape inside. My first offer of $72k was accepted, but then I found out during inspection that there is deflection in the foundation which will have to be repaired at some point (the engineer estimated the drainage work + relevelling would run somewhere around 15k). I changed my offer because of this, down to $60k. The seller initially hesitated but, given the facts, eventually accepted.

Both units are already rented, each collecting $600/month. Tenants have to take care of yardwork and minor maintenance, according to the lease at least. The rent is well below market as identical units one street over rent for around $700-$750. Not sure why the owner rented out so low - he told me his reasoning was that a lower rent is less likely to attract troublemaker tenants - not sure of the logic on that, but it is what it is for now.

Phil

Hi all,

I'm a new member to BP so this post serves as both an introduction and a question. I've been reading BP for a while now and have been absorbing the wisdom but haven't created an account until now. My wife owns a SFR and a condo, but she kind of fell into those (lived there, then moved and rented it out) rather than actively invested them.

The two properties she has, have been very good to her and trouble free the last 4 years, so we are looking at buying some more income properties. We've found one that looks interesting. It's a 4plex in a complex of identical 4plexes, in a good area. It's fully rented, total rent of $2700/mo. Same tenants for the last 3 years. Asking price is $140,000 and I think it should cash flow reasonably well. It's been sitting on the market for almost 4 months.

I called the listing agent and the conversation was unusual. The agent sounded kind of apathetic about the property ("you can take a drive around the complex, you know, if you feel like it", "I have a guy putting in an offer on a similar building in the complex, I guess we'll see what kind of offer it is"). He told me that there were several foreclosures in the complex a couple of years ago where a few of these 4plexes went for 55k-60k. Nothing else has sold since. He also mentioned that a recent offer fell through because the 4plex didn't appraise (the lender's appraiser used the foreclosures as comps). We looked up the property records for the complex and it looks like almost every one of the 40 buildings in the complex is owned by RE investors.

Feel free to correct me...but I assume this explains why it's been sitting on the market for a while. Any investor that looks at it realizes that despite it being a profitable income property, if he pays somewhere around the asking price, he might be taking a big risk in the form of valuation risk...because the most recent comp sales were the foreclosures. This assumes the buyer pays cash. In the more likely event of a buyer using a lender, it won't even get to that point.

My question is to those of you who have seen a similar situation: is it worth pursuing? If it is, are there creative ways to structure a deal so that the seller gets enough that he's willing to make a deal and at the same time the buyer doesn't take on too much appraisal risk?