All Forum Posts by: Robert Leonard

@Brian Campbell

@Brian Campbell

@Asher Anthes while it's good to think about the future, I wouldn't over think it.

If you think borrowing at today's rates is cheap and offers opportunities to put some cheap money to work, like I do, get as much as you think is a reasonable amount of leverage and keep building your assets/income. That's the way I see it.

@Kimberly Martin when I look at this "deal" my concerns are your repair estimate and how you are going to finance this project.

Your repair estimate of 10-15k, could easily turn into 20k, very easily. You have to factor something into your offer for the unexpected and for profit margin. You don't plan to flip this property, but you need a plan b (second exit strategy). You will have vacancy and higher insurance while it is rehabbed.

How are you financing this deal? It doesn't sound like it's occupied and based on the price, it looks like the seller needs some quick cash? If you decide to make an offer, I wouldn't offer more than 15k - as sellers expect to negotiate their price.

I don't see this as a slam dunk for a new investor. Or anyone who doesn't have enough cash/credit reserves to cover the expected rehab/holding costs. You also need the contractor relationships to have clear expectations for getting the rehab done quickly.

@Grant Smith I think you need to talk to a loan officer who can give you options on a conventional loan to replace that FHA loan. The FHA loan, while the rate might be low, is "high cost" because of the PMI.

You may run into seasoning problems too if you just bought in SEP last year? Cash out refi may not be an option? Before I guess, I'm going to point you back to a loan officer who can answer those questions. If you can't cash out refi now, you want to find out when you can or if the HELOC is an option?

@Sam Leon I would not replace a 3 month old appliance and I would only consider allowing them to incur the expense if they are outstanding applicants who exceed the 3x rent income rule by far and accept that the upgrades will stay when they leave.

It sounds to me like you need a new dishwasher and you have a tenant who is willing to help you replace it! I would take them up on that and get an extra $25/mo for the first 6 months or something like that?

@Chris H.

@Chris H.

LOL! I like you already @Kevin Skene ! I'm always telling new investors "be the sponge!"

Besides learning the business, you can start getting to know people in the business, here on BP and in your local market. Join a local REIA or two. You'll start meeting people and making connections.

And definitely start studying your market. You can pick up real estate guides and start looking at houses & prices in different areas. Check out how you can use Internet resources to compare prices of properties and before long, you'll start to see trends in prices. Look at the foreclosed properties on hudhomestore.com and homepath.com and see how the prices compare to other houses in those areas that are retail listings?

You are the sponge! and Welcome to BP!

@Marc Tolbert timing may just be on your side? If you have that deal under contract, Memphisinvest.com is having a huge event for investors this weekend and if you post that deal on craigslist (Memphis), I bet you can sell it in a flash! It's worth a shot when you have investors from all over the country in town looking for investment properties!

http://info.memphisinvest.com/upcoming-events

@James R.

@James R.

@Jimmy P. So you are trying to get 100% financing from the HML? Not impossible, but an exceptional challenge. You have to have a screaming good deal.

You can do your analysis and show it to your HML and see if they will approve your maximum allowable offer amount? Of course you offer less than that, if they approve you and leave room for negotiation when you make your initial offer.

Your realtor is telling you the way it works if you are trying to buy off the MLS. Otherwise, you can get by without POF if you are dealing directly with the sellers for off market properties. So many ways to do this business - just have to know the rules of the road and when to apply different strategies! Keep learning.