All Forum Posts by: Trey Knight

If it's been on the market for a while make a worst case scenario offer on the property.  If you had to replace everything, make that offer.  I would have it inspected by someone you trust. 

Typically banks are going to give you a percentage of your appraisal in a refinance.  The bank will do it's own appraisal, but let's use the 140k for reference.  80% of 140k is 112k - 36k owed is 76000.  You will also need to subtract any points or fees that you are paying the bank.  If we use the 50% rule.  Take half of the rent ($500) and subtract it for taxes, ins, turnover, property management and repairs.  That leaves $500 to cover the mortgage.  112k @ 4.5% over 30 is $567 a month.  It nearly meets the 50% rule.  If you are self managing the property it may be safe to do 40% and then you would be cash flow positive.  Also, you could refi for less if you want to stay more cash flow positive.  

If unauthorized repairs were done then don't pay it.  This looks like a teachable moment for you to your property manager. 

I doubt interest rates are going much lower.  It is likely that they will increase.  For comparison if you did a 4% note over 17 it would cost approximately 130k.  If rates increase to 5 or 6% in the coming years then having a 0% loan sounds amazing.  Is it transferrable, can you sell the property and the note? Also consider the market value is likely inflated by such low interest rates and a rise may decrease value.  Are you taking a standard deduction on taxes, or would you deduct any interest paid?  I'm assuming this would not report to your credit, so that's a bonus.  

Are you planning to AirBNB or do corporate rental?  By the night or by the week/month?

Most of the foreclosures in my area that are on Zillow are listed by Auction.com and the figure you see is an estimated sale price at auction.  If I remember correctly, all Auction.com purchases are cash.

Why are they selling? Owner's need money for another project? Owner's hate managing and are getting out? What if you made an offer to keep them on for a small profit share, but carry no risk?  I would take an offer like that. 

Is there a place to post deals we find? There are a few that I have my eye on, but I just don't have the means for it right now.  Would love to see the BP community benefit from it.  Im doing a flip right now and there is another property on the same street that really needs to be flipped.  It would help drive up the comps on my flip.  I would hate for a normal resident to purchase it and not flip it.  Is there a way to share it on the marketplace without being PRO

If it's owner finance, the down payment can come from anywhere.  Pull money off of a credit card, get a personal loan, cash in a title with your local bank (don't use title pawn), borrow from friends or family, hardship your 401k.  

If you buy a property with FHA you can do 3% down which can be a gift from a direct family member. After that I would recommend house hacking. Bigger Pockets just published a book about it. The 3 most recent podcasts all about house hacking.