All Forum Posts by: Account Closed

Hello all, 

I have a friend who is a US citizen living/working abroad (Hong Kong) and wants to invest in US real estate. He wants to buy with cash, but also wants to extract equity using cash out refis after 6-12 months. 

Can anyone recommend lenders willing to do such transactions? 

Thanks in advance.

Unless the tenant somehow secures a cash injection into her budget, this pattern will likely continue. Seen it several times in my own properties and got burned in most of them. 

If you want this to cease, the path of least resistance is generally not to renew her lease. Maybe give her a 90 day notice so she has ample time to find a new home and can't claim this as a defense during eviction (if it happens)

Alternatively, give her a cash for keys equivalent to 1-2 weeks rent often does the trick. Say it's for rental trucks, movers, whatever she wants to use it for, but if she agrees verbally, get it in writing as well. The goal is not to make her feel trapped, circle the wagons and say "evict me b/c I have no where else to go." 

The worst outcome is she can't pay rent and you're forced to evict her. Then you're out legal fees, repairs and lost income (unless you can get a judgment against her & collect at a later date), plus the upcoming costs of vacancy. 

correction: $2900/yr in taxes & insurance

Bad. 

$2900/yr in taxes & income on a SFH that only makes $650/month? You're out ~4.5 months of rental income just on TI alone.

Moreover, any SFH that only makes $650/month is likely a higher than average crime stats area, so you're looking at vandalism & vacancy issues as well (if/when it becomes vacant).

Factor in the other costs -- management, repairs, preventative maintenance, etc. -- then one or two semi-costly repairs and you've lost an entire years worth of rental income.

@Mark B.

@Mark B.

@Mark B.

Does anyone know if evictions occur with greater frequency in certain times of the year? For example, are evictions more common in warmer/summer months than in winter months? 

My property manager and I were discussing this, and me having my first two evictions occur at the same time in two different cities this month, I'm somewhat curious about the eviction stats. 

Thanks in advance. 

Question for the experienced Sub2 investors...

Based on your experience, what is the most efficient method for an investor to pay the seller's lender -- and make absolutely certain that payment has been made -- without making any missteps that could potentially raise the probability of the lender executing the Due on Sale Clause?

Do we, the investor, elect for:

1. Play a pseudo shell game where the investor pays the seller and the seller pays the lender?
2. Make the seller's monthly payment directly to the lender (by check or ACH debit)?

Either way, what proof of payment should be disclosed to the party who is not paying the lender?

Full disclosure: I'm not a Sub2 investor yet, but simply trying to cover my "trust but verify" bases here.

@Anthony Smith

If you're going into a >% sleepless nights investment within an area like low priced Detroit homes, a solid property manager is a must have IMO. One who will make weekly onsite visits, even daily when rehab is in order, and always be on call if needed.

I got lucky and found such property manager in the Detroit area, so if you want her info, send me a private message and you can speak with her directly.

@Jonathan Plair you won't need a wholesaler in Detroit.

If rehab is your game and Detroit where you want to play, find a buyer's agent and let them know you want a low cost home for a rehab or simply cruise HomePath.com in a zipcode you like and go from there.

@Johnson H. Zillow is probably the fastest place. They're "zestimates" are relatively useless, but they will pull data from municipalities on past sale prices, property taxes, etc.

Buyer's Agents will do this for you also, so that's a good confirmation for Zillow if you're interested in real due diligence.