All Forum Posts by: Shera Gregory

Thanks @Dmitriy Fomichenko. Good to have that clarified.

@Loren Whitney - I'm not sure I would go that far, but also good to know that there are options that could work. 

So as I understand it now, I could work with another investor with their IRA or non-IRA funds but they would have to be outside the disqualified parties group.

My husband and I each have a SD Roth IRA. Each of these owns an LLC which is set up for real estate investing. IRA #1 was used to purchase tax liens which have now resulted in two properties being owned by the SD IRA. IRA #2 was used for note investing which will be paid back this month.

Question -- can we use money from IRA #2 to help pay for repairs that will be needed in the properties owned by IRA #1? We already track every penny of spending so we would know exactly what percentage came from each account in order to divide up the proceeds later on.

If that is OK then does the same approach apply if there is a net loss? We divide up the cash we get from the sale but it may not cover 100% of what went into the deal.

With repairs at 5% I would suggest adding in a capital expense line item to cover what will eventually come up in a buy and hold house. This could be roof, HVAC, having to replace all the flooring when that renter that had dogs they didn't tell you about moves out, etc. In my experience holding several SFH's over time it seems that there is some kind of $5,000 expense every five to ten years.

Also, you did not mention what type of exterior it has. Brick, vinyl = good; wood, plank siding, asbestos = paint $$. I will now only consider homes with brick or vinyl exteriors for long term buy & hold. 

Did your banks include small local banks? Those are the ones most likely to be willing to do hard asset loans at the under-$50k level. Do you think you can get the house with an offer that includes financing? If so, go for it. If not then you may need to review with the local bank whether or not they will give you a mortgage on a home you have only owned for a few weeks. That would let you use hard money to buy the house for cash and then get the mortgage from the bank. You would need to be sure they are OK with that specific property before committing to a hard money bridge loan, but the good news is that they might loan against the market value rather than what you paid for it.

Numbers are your friend! Keep at it.

Shera

I like it .. scrappy is kind of knocked about but still has potential. That's the way most folks will want to think of their homes even when they really are just "ugly".

Does the homeowner need to sell? If they do and your repair estimate is in the ballpark then they won't be able to get that $48k even as a handyman special on the MLS. It sounds to me like your effort needs to be in educating the homeowner on the reality of their house, the market comps, etc. If they aren't ready now they may be later on.

Shera

I am curious about the contract cancellations. The biggest fear of new wholesellers seems to be "what if I get a house under contract and then can't find a buyer?" Since I am not in this side of the business I don't know what is common practice. But it sounds like the biggest downside for you was just not getting to complete the deals you had worked for. In the "fear" scenario the concern is that the wholeseller is on the hook somehow. Did your contract have an "out" that most people could use to mitigate that issue?

Shera

I have been using erentpayment.com with my tenants who do not have checking accounts. They can use their debit cards (but not a credit card). This has been working well. It's a $3 per transaction fee. I'm OK with that since the alternative is cash payments.

Shera Gregory

I had hoped there might be a way to set up the alerts with an "except" feature. I live in Richmond Virginia and as much as I love J Martin .. his "Richmond" is in California and he's a very active poster. Would be nice to be able to say "Richmond" except posts by J Martin (nothing personal J!!).

Shera

Hi John. Since most folks on BP tend to post about what they are seeking you might want to consider changing the title of your post (or re-posting) with something like "I can provide property inspections and repair estimates".

Shera

I am not sure what areas they cover, but we have been very pleased with Erie Insurance. They have good landlord policies at reasonable rates. The only house they turned us down for was because the metal roof was too old (and we didn't see the need to replace it).