All Forum Posts by: Rick Pozos

Personally, I only invest within an hour from my house.  I like to be able to go and check on the rehab, tenants, whatever.  Unless you are comfortable investing out of city or state, I would not do it.  There are plenty of deals in your area. You just have to market and talk with people everyday around you.  

3.5% of $165k is $5775. Your lender should have told you that you would need more than that to close on the house.  Several months insurance and taxes up front, doc prep, loan origination fees, underwriters fees, title co. closing costs. I dont see how you could think that you could get away with only 5k out of pocket if the seller said they would not contribute to your costs.

Im sorry if it sounds harsh, but again 3.5% of 165k is over $5k.

If you found a different house where the owner was willing to take back a second lien position, that would work.  Maybe there is a program for first time homeowners in your area that will gift you some money or give a second that will get forgiven at a later time.

If you want to do a little creative type of financing, the seller has to be on board. This usually means that the seller is flexible because he/she really needs to get out of the house. 

For your first deal I would call someone who is local to the area and partner with that person. Leverage their knowledge, buyers, money, etc.  They will have the same questions.

Is the property vacant? Tenant? How long? Are their lots of repairs?

Maybe the property can be had for the loan balance or just a few thousand higher.  I would move quickly though.  If the seller is feeling some pain, they probably want some relief quickly.  That is what you are there to do.  Relieve his/her pain.

Before anything, I would check with your insurance agent and local code.  A duplex may not need a firewall. If it does, it may be as simple as running fire rated gypsum board up to the roof or it may be more involved again depending on your municipality. Of course, it is always better to have one, safety wise. Your insurance rates will most likely be lower. Marketability on the sale side will be greater also.

Many times an inspector will note that there is no firewall in a duplex, but just to mention it. Thats all. When you go over 2 units, there will be an almost 100% need to have a firewall.

Investor clubs or groups are the best place to find someone that you want to work with. You can ask others in the group about the person who you want to work with. That way you make sure that person is really who they claim to be. Also ask if you can see some of their projects that are in process.

The best way to find a mentor who will really be interested in helping is to have a deal or two that you are researching and have ready to go under contract. Let the person know that you will split the deal with them or wholesale it to them. In turn you will be there to ask a million questions so that you can do the next one on your own. Half of a good deal is way better than all of a deal that can go so bad. 

I would definitely find a local inspector. If its a multifamily property, I would break down and spend the money to fly in for the day, rent a car, see the properties, and fly back.

It will cost several hundred dollars, a dayof your time and you can meet the inspector at the property. I like to get a little feel for the property, the area and just see whats happening all around.

It looks like a nice building. But there are always more factors than just the building and the price.  Looking at the demographics at the bottom of the listing sheet, there is a 25% vacancy rate among the rentals!!!  The median age is 23 years old!! I guess its a college type of town, but the vacancy rate is way too high. If you do not get the unit rented in August or September, you will most likely have the unit vacant for at least 9 months. That is a bunch of uncertainty. 

With all of than said, I would offer about 40k per unit or 240k, provided the property is just about move in ready. There are so many more factors though. This would just be a rough idea.

From 69.9k to 12.5k?? Call me crazy but that sounds like an 80% discount. 

I would ask him if he is going to cancel the listing or is he still going to pay the agent a fee. It is his decision what he wants to do. Ideally, he would cancel the listing and you buy directly from the seller.  If he is still going to pay the agent, then just raise the price a grand or two to pay the agent and get the contract.

Either way, get it under contract, and start finding a buyer.  It sounds like there will be a good wholesale fee coming to you pretty soon.

Good Luck!!

When purchasing a property, I usually choose the title company. There are times when the seller is adamant about using one that he knows someone at or there is some strong reason for him to use a certain one. Does it matter to me? Not really. If the seller's lender is set on one title company, I would go with them. They are the ones that are really in charge. Let them be in charge. You can always get another HML.

Replat and move the property line over 3ft or 6ft.  You could also put it in the deed that he has complete control of the tree on the property line.  When you give the survey to the title company, have them put in your wording into the deed about the tree. The title company attorney will draw it up.  They will do what you ask them to do, because you are the one paying them.