All Forum Posts by: Tom S.

@Matthew Espana  I think you need to find out as well what their intentions are after selling.  If they'll be buying another house immediately, it prob wouldn't work as the existing mortgage will still stay on their credit, and they wouldn't qualify for an additional mortgage.

@James Colgan  Similar to my comment above about a year ago, no issues and smooth process.  I've requested a few small cash outs to my bank.  2% fee, all done through the app, and funds always in my checking account the next business day.  They also issue a card card and I've used only a few times, again no issues.

@Tony Pellettieri  Welcome to BP!

Speak to a real estate attorney that is well versed in seller financing contracts for your state.  In general, with a proper deal you will take ownership / title at closing, and the seller will have a lien against the property, same as a bank would.  So the selling is not different than a standard sale.  The title company will calculate what's owned to the seller and pay off the lien when you go to sell, again, just like a bank mortgage would be paid off in a normal sale.

I would recommend two contracts for the two properties.  For example, in case a title issue came up with one, you could still purchase and close on the other.

I would also recommend a longer time than 4 months.  Lot of issues can come up.  If you're saying 4 months and don't have the balloon payment for whatever reason, you could be foreclosed on. 

Good luck! 

@Caleb Sonneman  There are non traditional options out there such as owner / seller financing.  I did a bunch of my first deals that way.

@Lucero Cruz Narino  Maybe try calling instead of texting?  And yes, if they're not interested, try to find out why. 

Good luck!

@Akshay Bhaskaran  Yes, certainly complete your due diligence.  You can at least get it under contract, then order an appraisal, inspection, etc.  

As others have mentioned, the seller can just sell and put the money in a CD at 5%, so why offer financing at 2%?  There are tax advantages to the seller, but definitely dig deeper.

Good luck!

@Brady D'Hont  Brady - on your questions to me, I invest local (VT) and have contractors mostly in place, depending on the exact location.  Once you start to do a few rehabs, you can walk the place and at least get a rough estimate in your head.  Then I would make the offer and use the inspection period to get the contractors in and get better numbers.  

I also use local banks that can provide purchase + rehab financing all in one loan. The bank will do an appraisal based off the ARV, so that way the numbers are already known up front and generally, minimal surprises.

As mentioned in my original post, the goal is to create equity,  and get your DP back out through a refi (and still leave equity in the property) and still have a cash flowing rental property.  Then take that DP and repeat!

@Brady D'Hont Similar to what others mentioned above, for me the BRRRR method is a good one. Using round numbers, starting off with a $25k DP for a $100k property and saving up for that is the hard part. Then BRRRR, and ideally pull out $25k after fees for your next DP, also leaving equity in the property and have it be cash flowing. Then repeat that process a few times. Having a good W2 job is certainly helpful for getting the best loan terms.

I also did a number of seller financed deals that I purchased.  With the two strategies combined, it's been very successful.

Hope that helps and good luck!

@Hector Serna I'll take the opposite approach of the others, I don't know the area and it may be a good deal. But cash wise, if you're renting it for $2k and your mortgage is $1900, then you're losing money each month once you account for vacancy, maint, CAPEX, etc.

Plus with it being an investment property, 25% down on $180k = $45k cash (plus closing costs), plus another $20k for repairs, that's $65k cash out of pocket to be break even each month at best (and again, prob losing money each month accounting for other expenses).

@Aarielle Pannesi  Great to hear you found a potential deal!  For investment properties, I prefer to look at my local banks first (which can be the same as a portfolio lender).  They tend to be more flexible on the property condition, documentation, etc but have slightly higher rates.

I did two refi's last year before rates started rising.  My local bank offered me 4.5% on one property.  The other I used Sofi, a national lender, and they offered 3.125%.  SoFi was full doc but had a slighter better rate as you can see.

Both loans have no pre-pay penalty.  Hope that helps!