All Forum Posts by: Tom C

Thanks guys..

Jon,

To answer your question, I don't know if they would consider a partial release. I didn't know that was even an option to consider. I will check.

Will,

I invest mainly for cash flow and any appreciation that comes in the future is a bonus. As far as my long term goal. It is to obtain 20 or more SFR. The increase in cash flow will come back after the next the acquistion by adding it to my current holdings. The other part that I do like about option 2 is that it still allows SFR1 to have a clear title and leveraged later after it has seasoned over 1 year.

Bump.. Someone has to have some advice here.. It's not a difficult question..

Brandon,

I live fairly close to the Ytown area and invest fairly clost to it too. I am sure there are some decent area's in Ytown, but you really have to know the city and PM's in that area are in my opinion will to say anything to get work.

The city that I invest in is depressed and has been since we lost the steel mills. We range around 5 shootings per year, which is low. The homes that I purchase are HUD's and REO's that have been on the market for more then 6 months. Many have been vacant for 2 years or more.

I only buy in the middle class (for my community) area's of the city. No war zones. Most of the neighbors are either low to mid income people. Keep in mind if you make 30 to 40K a year in NE Ohio you are doing better then many folks.

I do not have a high turn over in tenants. They are needy and do require attention. I am banking on the fact that the city has been depressed for so long, that sooner or later it will come back and the area's that I buy in will be some of the most desireable area's to live in.

Will,

I cannot say it any clearer, you are wrong and frankly have no idea what you are talking about when it comes to investing NE Ohio. At the price I am getting these homes at, they will not depreciate below my investment and have shown to come in exactly where I estimated they would after rehab.

Matt

You do not see crack dealers and hoe's standing on my streets. I would never be able to get rents between $550 and $600 a month in that situtation. Those area's of the city will only bring in the upper $300 range and you can pick up properties ready to rent for 10 to 15K that require no rehab if you want to be a slum lord.

Not all banks sell to FF and not all banks require you to go commerical after 4 loans.. If they hold the paper in house, they can do whatever they want.

Jocelny, I am not sure how you just found out that you under reported rents for the past several years, but If I was you I would let it go and wait for the IRS to catch up. At the time they will send you a bill and you can settle with them for much less then what you actually owe or you can setup a repayment plan. This is what I would do..

There are many more people here that have far more experince with this issue then I.

I have worked with the same agent from the begining. She has been great for the most part, but we have had a couple issues too. I find the deals and all I ask from her is to get me in the house when I need to get in, then submit my offer. We would have a much more profitable relationship if she would give me access to the MLS and the lock boxes. This would save us both a lot of time and would possibly avoid scheduling issues. I would never go around her and go directly to another agent, what would be the benefit to me? I still pay the same whether I deal with only the listing agent or both agents.

There are many different ideas on how to accomplish this. I for one, put a down payment on my first house, then cashed the equity to buy my second and just repeated this. The trick is to only cash out as little as it takes to get your next property and rehab. You do not want to get yourself in a situtation where your rent is just enough to cover your payment. This is setting yourself up for failure the minute one of your properties goes vacant for any amount of time.

Also, keep in mind that banks do not like to see more the 4 mort properties on your credit. This is why you want to get as many properties off your personal credit and on to a business loan as soon as possible.

Over leveraging your properties will kill your business in a hurry the minute some unexpected expense comes up.

Also, don't forget about seasoning issues. Many banks over the last year went to from 3 months seasoning on the title to 6 months and now 1 year.

Many times owners who are willing to go sub2 are in trouble and just need someone to take over the payments. There are other times where the owner has a lot of equity and will require you to provide a cash down payment and then take over the property sub2.

I am currently trying to pull some cash in order to make another acquisition and I have a dilemma on which way I should go. Keep in mind when reviewing the numbers, that the next acquisition will be another rehab and hold for rental and will be a cash deal adding to my total cash flow.

Option 1 only refi one property all notes in personal name.

Clear title currently

1. SFR - Appraise value 53,000 pull 35,000 @ 8% 30 yr fixed P&I $256 current rents $550

Other notes currently

2. SFR - Appraise value 54,000 note 35,000 @ 6.78% 30 yr fixed P&I = $227 current rents $600

3. SFR - Appraise value 64,000 note 45,000 @ 7.5% 30 yr fixed P&I = $314 current rents $600

Under Option 1 if I simply pull 35K out of SFR 1 and leave other notes standing, my total monthly payments would be near $800


Option 2 with different bank

1. SFR 2 and SFR 3 (Will not include SFR1 due to less then 1 yr seasoning) into a business loan for a total new loan amount will be $112,000 @7.5% 30 yr fixed cashing out $30K for a total monthly payment of around $785.

Pros and Cons with Option 1

1. New loan is again in personal name
2. Rate is extremely high for a conventional loan.
3. All 3 properties leveraged equally.

Pros and Cons with Option 2

1. Finally able to obtain a business loan freeing my personal credit
2. Still will have a clear title on SFR 1 to leverage later
3. Now SFR2 and 3 are really over leveraged.

Give me your opinion on which route you would go or even if you think that I am over leveraging these properties and possibly getting myself in trouble. Now is the time to buy, so I feel that I need to make as many acquisitions as possible.

Thanks