All Forum Posts by: Tyler Clearman

Tyler Clearman has started 6 posts and replied 16 times.

Hi BP! I want to pitch an idea to you and get some feedback on if its good or not.

I want to reach out to sellers from expired listings or FSBO. And then instead of buying their home, I want to offer to take over their mortgage payment (not assume their mortgage, just pay it for them). The seller then either adds me to the title or transfers me the title. I will then rent out the home for the foreseeable future.

Is this a good idea? I like it in theory because I would have very little money invested since closing costs would be very low and the seller would assume the risk through chance of my not paying the mortgage or the very rare chance of a due on sale clause. (I would of course fully disclose these risks, however small they are.) I also know that this is a very specific type of seller since almost no one is willing to give away their home.

If this is a good idea, what resources should I use to find and reach out to the kind of sellers I am looking for?

I am having to go with these low money down financing because 1. I am a college student working part-time. 2. I have no tax history to qualify me for a traditional loan.

Thanks for everyone's help with this. :)

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Im trying to find sellers that need to sell their home like yesterday. What free methods do y'all use to find them?

I am trying to make a subject to deal with them and I already know most people will turn me down. So I need a large number of FSBOs that I can pitch to to increase my chances of finding one that will say yes.

How are you finding large numbers of motivated sellers in your area that would be willing to do a subject to?

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No I havent seen it. But it was more of a test. I was looking for any property that i though could maybe generate positive cash flow. But its like John Claborn said. Its a rougher part of town than i would be interested in.

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Okay thanks! That is super helpful. This property was mostly just a trial run for doing analysis. I would prefer living as close to Techs campus as possible just for my own convenience.

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Originally posted by @John Claborn:

If you're going to househack, rents likely would not be the full $1,300. If you have a roommate, you're likely looking at $650 for A and $325 for B. You're still covering expenses, but the cash flow decreases significantly. Moreover, that particular area of Lubbock is not highly viewed by investors. It's in a pretty rough part of town. Tenants are likely to be a little more cumbersome than other parts.

In Lubbock's market, duplexes and any rental are hard to come by. The price is good, but you might want to adjust numbers to compensate for a decrease in rents if you live in one side, which you'd be required to do to secure 3.5% down. I agree that the interest rate seems low as well. I'm closing on an investment prop Thursday at 4.125% on a 15 year note. The 30 year was 4.75%. So you might check that as well.

Whats the best way to calculate cash flow if doing a hack?

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Originally posted by @Brian Egr:

You are in the ball park with the calculator, 3.5% seems really low for loan interest rate, especially at a 30 year Am.. The 6% for cap ex. is low, but if they just did a total rehab you should be fine.

There should be a standard tax levy rate for Lubbock Co. TX, the town of Lubbock might add some on top of that though. Looks like right now it is assessed at 69,233.

I went with the 3.5% because I would house hack with it. I would get a fha loan. What percentage do you normally use for CapEx?

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another thing with that property is that the taxes on it where for when it was worth about $25,000 less. They fixed it up a lot so it is worth more than the previous taxes were showing. Is that logic correct?

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Originally posted by @Zach Scheer:

I would call the town to find out the taxes. We bought ours last year and the town told us that the previous owner had a veterans discount and that this year was the reassessment. Our taxes went up 4K in one year but we knew about it ahead of time. Also check about insurance and make sure the $600 you budgeted for is correct.

How do you calculate insurance? I just guess on that after watching the webinar today.

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I just did my first analysis on a property. I used the Rental Property Calculator. Can anyone check to see if I did it right? I got the annual property tax off of a property shark website. Here is the link to my analysis pdf and the property on realtor.com. Let me know what you guys think.

http://www.realtor.com/realestateandhomes-detail/1...

https://www.biggerpockets.com/calculators/shared/818436/9532d865-9917-4cb5-8762-3095ddc30383

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