All Forum Posts by: Shane Johnson

I am in a similiar position. My second house I bought at 82K, owe 77k @ 4% and it should appraise out around 130-140k right now. I have thought about selling for the cash. Market rents on this property as it sits, are $1100-1200 all day long, maybe more.

I thought about selling, but I love this property, have a large amount of equity, and it has an attic and basement I could finish to make it a 3/2 or 4/3 , at a 4/3 fully renovated, it should put me in the 170-180k range. Instead of selling, in August I will have 1 year seasoning on my mortgage. This means I can get a full appraisal (not just a driveby) and show the value I have added. Also, I should have a few great comps hitting the MLS that will help this whole scenario. I will be attempting to obtain a HELOC at 80-85% LTV, and hope to achieve at least a 25k line. Along with cash on hand, and profits from the sell of my first house I bought 4 years ago (long story, wasnt selling, lady left a card in my mailbox, I named a price and she accepted) I hope to use all of this to buy a fix and flip with a partner. Also hope to 203k loan another property as well if I can get all my ducks in a row with them.

It is all based on your risk tolerance. If its not that high, sell and use the cash. If it is higher, use someone else's money.

Too expensive for my taste. Using the same "2%" rule that people love so much, I have determined in the great neighborhood, and school district that I live in, that I have a threshold of about 1.25% at the bare minimum. 1% is just too thin, barely any cash flow, and wiggle room if the rental market drops in the future. Meaning, I want to KNOW I can rent a property for at least 1.25% of what I paid for the property. (search this site for more info on this oversimplified deal analysis approach). My two properties have been homesteaded conventional financing, so out of pocket is obviously lower, and cash on cash are higher. Your purchase price puts you dang near 1%, especially if you can only rent for 1000-1,050. In my opinion, the reason it would cash flow with the numbers your provided, is because of the equity of your down payment. Your also not taking property management into consideration. You are going to self manage for the entire life of the rental? I would want to pay $82,000 for this property, and try to pay no more than $90,000 for this property. $95,000 at the very most if there was a few other details backing that up (location, school district, surrounded by 150k houses etc). Hope this helps.

They can in essence, replace real estate agents, and save the commissions associated with using a real estate agent.

The plot thickens - talked to the seller again and scheduled a showing. The reason she is interested in selling outright/cash offer is the fact that her and her brother need to split the estate, and he wishes to stay in the other house. For him to pay her off and stay in the other house, he needs the cash from the sale of this house. So now my plan is to try and come up with half the purchase price cash, and see if she will seller finance the rest, for a higher offer price. I am thinking of giving her two offers - a straight cash offer, and a half cash/half seller financed offer.

Any thoughts?

@brian ... Lol!

I'm at my day job right now, so can someone please link me info on options and the necessary forms?

Join the club. The people at the banks are idiots. They should just have underwriters on staff, or able to contact to give better yes and no's. I was working on a HELOC on my property (not quite a full year seasoned), bank AVP had me all amped up thinking i was pre-approved for 20k line ( I fell for it because of recent sales comps in the area, otherwise I was skeptical) - only to have the drive by appraisal come back with only enough equity (@ 80%LTV) to give me no basically no equity to cash out.

I am certain there are buyers waiting in the wings, as soon as they even know its available. I found this one by walking and talking to neighbors. I think the sellers idea of its value is realistic, and I would like to lock this up before it has the chance to hit MLS, where the bandwagon investors with deep pockets await. Despite the repairs it needs, I know I can cash flow it immediately. The estate is supposed to be closed by June 3rd, so I also hope to pitch that as a reason not to deal with the MLS and to work with me. I understand what your saying about getting lost in the details, I tend to ramble. :) But I wanted to illustrate their urgency/motivation, and my need to make this happen as fast as possible, without using cash if possible, and especially before another cash buyer can come along.

Yes, no bank involved, both properties owned free and clear. I also noticed last night that the two heirs may be administrators, as i don't see any verbage in court records of executor, and I see they pulled a sig bond for $70,000. So from what I read, either there was no will in place, or the will did not waive the need for a bond. I will have to ask the daughter more about it.

Can you go into further detail about the option? I assume you mean using a lease option purchase contract? So its basically a rent to own scenario?

What do you mean by out of an estate of an OO? Owner occupy? This house was not owner occupied, it was rented. The deceased owner occupied the second property, of which the son now lives in.

Lastly, what is the process of getting the deed transferred from the deceased, to the heirs? I will also have to check to see if there was a will in place, and that will dictates that the property must be sold, and if there are any other debts to be satisfied.

I should also add I believe the daughter is the executor, and that the deceased passed with a will in place. Lastly, they intend to try to put this on the market, but with cleaning and fixing it up, they dont have much time to get this deal done by June 22nd. My sales points are speed, ease of transaction, and offering to clean up the property and take it as-is, with no work involved by the heirs.

I found an off market deal in my back yard that I am pursuing heavily.

Back story: House was owned by same lady for over 30 years, rented by brother in law, no mortgage/liens, and currently vacant. Two survivors, one out of state, the other in the hospital.

The deceased's estate needs to be closed (already filed extension in February) by June 22nd.

The family is trying to fix it up a little (using a local handyman) and sell, but the house needs a little bit of work, one of them lives out of state, the other is not currently capable of handling the estate affairs due to health issues. They have picked up the inside, and done a little painting, but it is far from turnkey first time buyer ready in my opinion.

Right now the state is telling them they need to close the estate, so the property needs to be transferred out of the deceased's name. My question is, can this be easily transferred to the daughters name, and I could set up a contract for deed with her? How would I go about handling this? I am also slightly worried if I lay this out for her, and provide her the tools, she could market it to others this way. I have a suspicion though that she would rather wipe her hands clean of it and have the cash though. We will see...

Also, if she is not interested in CFD option, and I can finance it with 20% down, how stringent are lenders about issues that the house may have? I don't have experience buying houses with investment loans/20% down, but I would think their inspection requirements are less stringent than on a FHA/USDA or even a regular conventional owner/ocupy loan these days.

Any and all advice is appreciated. The least out of pocket the best, especially as I found out they own 2 houses they need to sell, and I would like to make the 2nd work as well. Thanks in advance!