All Forum Posts by: Derek W.

You can be a calculated, well oiled machine and plan carefully to space your flips out. Then escrow may find a title problem, or a short sale takes a month longer than you planned, or...?

and suddenly you have too many houses to rehab and can't do them all at once, or no houses to rehab at all. It's really hard to perfectly space out. Earlier this year I had eight houses sitting empty because my crews couldn't get to them all. Certainly not ideal, and certainly not a well oiled machine, but we all simply do the best we can with the skills we have. In my opinion, it's better to have a house sitting than not have any houses at all.

I just got registered. It was a pretty thorough process. They ran a back ground check on me, asked for lots of documents proving who I was and how I was tied to my business. Then they do a site inspection of your office. My understanding was you need a commercial office site. They won't approve people who work out of their homes. I've just started using the site, so I don't have any feed back yet on how helpful it is for me to find missing owners and heirs. My sales rep was very easy to communicate with. I'd call your rep and ask what you need to do different to get an approval.

July I'll be fully moved. Put me on your list then, for sure! Would have loved to see the Elsinore house. Sorry if I hijacked thread :)

@Aaron Mazzrillo since I know you, I'm sure that was 1:30 PM you got out of bed,right?

@J Scott I really liked your suggestion. I plan to hold the property for cash flow for x amount of years then exit at a peak in the market. I liked your interest only option to maximize cash flow while I owned it. I presented an interest only for 30 years (no pre-pay) at 5% interest. Additional (optional) monthly payments to be applied to principle only. That creates a monthly payment of $125.00 month. Seller accepted today and we opened escrow. This is why I love biggerpockets! I would have probably offered him 10 year fully amortized so I can get the property free and clear without getting killed on the monthly payment. That would have been $318.20 each month. I have a pile of seller carry with similar terms. It's just something I got used to, I guess. But since my plan was to exit at a point, paying it off isn't as important as cash flow NOW. J Scott has made me $193.20 each month from his free suggestion. (It's free, right? Lol) Thanks to everyone for the added suggestions.

thank you @Andy Collins good advice

and @Bryan H. I hadn't thought of that strategy, I love the creative thinking behind this.

Those were the sort of answer I was looking for.

My thought was to defer all payments until rented, then have payments affordable enough the property could support them, but aggressive enough that I get it free and clear sooner rather than later.

But I was curious if any one had other strategies that may be interesting.

I think you guys are mistaking future value with amortized value of the loan. FV is not talking about future value of the property in a speculator sense. From a mortgage calculation, that is the portion of the loan that is being paid off over time. For instance, an FV of 0 on a financial calculator would be a fully amortizing loan. An FV of -$30,000 would be interest only. And in that realm there could be partial pay down, amortized in x due in y etc.

@michael siekerka I don't understand what you mean about FV being irrelevant and determined by the market?

It's just financial calculator speak. On a financial calculator across the top is N for number of payments, I/YR is interest rate, PV is loan amount, PMT is monthly payment, and FV is amortizing of the loan.

Today I met with a charming and intelligent lady at her sisters house. Her sister recently passed away and she is the sole heir and executor of the estate. We visited and talked for two hours at which point she agreed to sell me the house. We both agreed that she will carry with no down payment as the house needs some repairs before it can be rented. I will rent it for $700 month. She told me that the I/YR (5%) and the PV ($30,000) were non-negotiable but I can choose the N, PMT, and FV. Anything I want! Deferred interest, neg-am, anything! (Within reason, I'm sure) I'm just curious what y'all would choose if given the same choice. Taxes will be $781 year insurance $480 year. I know what I tend toward, but am interested on other's thoughts.