All Forum Posts by: Ray Johnson

@Ashley Victor I'm missing something here, she did all this with no pre-negotiated rate in place? She can make you a lot of money then wait hoping you'll give her a nice check when all is said and done?

@David Edwards 4 months ago I purchased an REO with $20k down, it's cash flowing $387 per month. It also appraised $25k above sales price so the bank essentially paid me $5k plus 3% in closing cost to get the property. There are plenty of good deals out there that you can get for $20k

@Ran Cohen Is this property already on the MLS and you're looking for an additional marketing avenue or are you looking for an off market investor only buyer?

@Matthew Charron How you present yourself to potential investors/buyers will make a difference when networking. If I were at a REI meet up and you either had no business card for your company or a website that I could look at, I'd most likely return your phone call or email after others I thought could bring me a successful deal faster. If you seem like you're already prepared to do business people will be more likely to engage at a deeper level which will be beneficial for you.

@Charles Borrelli to bring more clarity to the conversation, the two affidavits were different, the one from the bank underwriter was two fold, it covered the OO financing rate and the OO required period, the affidavit from BofA was strictly covering the 60 day and 12 month requirements. I understand your concern about the 60 days not being enough time to get the property move-in ready. What I've done in the past is get all of my contractor quotes, materials ordered and scheduled, permits and applications started before I closed. I essentially use my escrow period to make sure I have enough time to meet the 60 day mark for occupancy. I use a very good investor friendly realtor who doesn't mind constantly going to the property so I can obtain quotes from the trades.

@Charles Borrelli I financed the property through Wells Fargo, I signed an OO affidavit with Wells Fargo as a part of the underwriting process, and Bank of America the REO asset owner asked me to sign an OO affidavit as well before they accepted my offer.

@Kate C. @Aaron Cavazos is correct, it's probably cheaper to hire a RE agent here to rent it out for you instead of paying airfare, hotel, meals, etc. Did you have a good realtor here in DC when you purchased the property that you can reconnect with to lease it for you?

@Ernie Sturzinger If you just closed on your first property, what's the hurry on getting your second property? Why would you essentially be giving up your cash flow to get another property so quickly? I've seen a lot of new investors more concerned with getting a high number of doors in their portfolio than really making money. Since most of the responses have already said they wouldn't do this strategy I won't comment on that, I'll just say the Guru's constantly preaching get as many Doors in your portfolio as you can aren't discussing the fundamentals, that's clear by so many new investors posting about getting deals that are cash flowing little to no cash flow, but hey they added 4 or 8 doors. Those deals are one new roof or one new HVAC away from never making a profit. I would recommend building a solid REI portfolio where you're not going to worry about money or emergency exit strategies.

@Charles Borrelli I can't recall if I've seen a post from you regarding REO's or not so I'll reiterate what I've told a few people on this subject. I buy the REO's during this owner occupant period, but I move into them for the required timeframe as my primary residence. @Manolo D. @Michael Plante have both touched on the thing you may not be aware of, Every REO that I've purchased during the OO period will have the following requirements as a part of the sales package regardless of how you pay for the property, cash or financing. 1) You will be required to sign a sworn affidavit stating you will be using the property as your primary residence. 2) You will have to sign the affidavit stating you agree to be moved into the property within 60 days of the closing settlement date. 3) You will sign stating you will not sell or rent the property before the one year point from the settlement date. At the bottom of the affidavit it states if you violate any the aforementioned things you're committing mortgage fraud and will be federally prosecuted if it is determined you violated these terms. There are federal Hotlines for people to report possible fraud by investors in this arena. I've bought several REO's as OO, but I've only been aware of someone checking on me after the purchase once, It may have been more but once was obvious. Luckily I'm not dumb or a gambler who'll risk committing a Felony just to get a property so I was ok when the woman showed up at my property. If you really want the property just move into the property before the 60 days and do your 10 months in the property then sell or rent it at the 12 month period, this is what I do and it isn't that complicated.

@Cody Evans Why are your parameters set at 4-plex cash flowing at $800 a month? Everyone has reasons for why they buy the properties held in their portfolio. It seems like you're focused on the number of doors over cash flow if your cash flow target is so low. If you're starting with $20k it's cheaper, easier, and more manageable to start with a single or duplex property and cash flow at or above your $800 target. In the $20k down payment pool of investors you will find a lot of competition for a 4-plex and you probably can get more profitable properties as your initial investment going with a single or duplex property. An example: I have one property that cash flows at $585 per month, I purchased it with $20k down. While it's not $800 per month, the vacancy, and expenses are also far less should any issues arise. I know on this site, many podcast, and a lot of teaching Guru's often promote the get as many Doors in your portfolio as you can, while not teaching true fundamentals to the new investor population. What's your REI starting goal, cash flow or number doors?