All Forum Posts by: Mike V.

Hey Brad, welcome to the site. One option for you may be to buy from one of the bigger investor groups in the area. There is one in particular that will loan you the money to buy their properties. When I looked at some of their homes they shot me a 9% rate to buy their stuff. I never have bought from them since their prices are above what I am willing to pay for rentals. PM me if you are interested in finding out more about them. Again, I have never bought from them but they are a big outfit that has been around for some time and have bought and sold a ton of houses. For example, I live in a house that they flipped and the last house I bought and rehabbed had been flipped by them about 10 years ago.

I agree with Mike, figure out what it is worth and make the offer. The most important thing I have learned in my short time investing is if you have taken the time to evaluate a property then you might as well make the offer regardless of the number. In the past month I have made 3 offers on REOs. Offer 1 - $5K over asking price - rejected. Offer 2 - $28K under asking price - rejected. Offer 3 - 55K under asking price - accepted. You just never know. Good luck.

My last Home was from HUD and had minor termite damage but they did pay for the treatment just not the repair. By insurable do you mean FHA? That is usually what HUD list in the deficiency section - things that will disallow FHA programs.

I just refinanced my 2nd rental property last week. I ended up buying the sfr with cash to help make the deal but what I found out was that regardless of the appraisal (which was 32% over what I paid for it) the bank would only lend my 75% of the purchase price since there was no mortgage on the property. I use this lender since they don't sell to Fannie or Freddie so no seasoning issues but they implemented this policy about two weeks before I closed. All kinds of restrictions and rules are poping up so ask a lot of questions from your lender and assume nothing.

I am in a similar position. I just received an accepted offer on a condo in the best zip code in St. Louis for 50% of retail but the financing is proving tricky. Lenders are very skidish about loaning on investment condos these days. The lender will require that it is "warrantable". I'm not an expert but I know some of the questions involved is how many units are vacant, how many are rented versus owner occupied, is it managed by the constructors or by a tenant board, status of HOA balances, etc. Maybe someone with more knowlegde on the lending end could chime in.

Welcome Bob, glad to have another St. Louis investor on this forum. Don't get discouraged on bidding and don't overbid. I have been pleasantly suprised twice this year on deals that I didn't think had a chance. There are some very motivated sellers out there, you just have to find them. My first deal this year was a HUD home that I got for 54% of their original list price and it had already been rehabbed. The second was an estate sale that was already priced crazy low and I ended up getting it for another 20% under their asking price. Good luck.

You can find 10% coupons on ebay. I used them on my last major rehab. Spent about $35 on coupons and saved over $750.

Dale,
This is exactly my current strategy with SFRs. I have a full time job so no need for quick cash or even significant cash flow. I'm happy if I can make a couple hundred a month over principle/interest/taxes/ins to help cover all the other expenses. I plan on rehabbing/selling whenever the market turns and only pay long term capital gains. Great advice in the earlier post about putting money into the areas such as roofs and mechanical systems not typically abused by tenants.

Now is a great time to buy - have fun!!

Wayne,
My second deal was a major rehab. Purchase price of 140k, rehab 40K, and holding cost of 10K (and I didn't even use hard money). Rehab takes a lot of money even when you do it right and there are no suprises. If you do it wrong and/or have suprises then the pain comes. My holding cost were about 1500 a month. Can you afford that if it takes 4-6 months to sell? I am similar to you and am drawn to rehab because it is what I am comfortable doing, but please understand that it is the most expensive and the most risky proposition. Good luck.

I've had two HELOCs. The first was interest plus 1/2% principle per month, the second was interest only. I just bought a house last week with my HELOC I will probably refinance but keep the money out in some other type of investment because more and more big banks are starting to freeze credit lines with no warning. The best I have found in my area is 80% LTV and the appraisals are getting harder and harder. I also found that getting a HELOC on an investment property is nearly impossible.