All Forum Posts by: Tim Winter

Most lenders have gotten away from seconds, and it's even harder to find 2nds to buy. Used to be quite easy, even non-performing 2nds. 

You might try small local banks, and also the larger national banks. I was trying to find one a couple years ago and was able to find US Bank still did them up to 80% LTV. The lender I was communicating with was Jim Alworth, US Bank Loan Analyst. BP won't let me post his contact info, so PM me and I can send it over.

You might also try local seller carry/note people. http://seller-carry.com/ is website of one of the larger note carrys. You might not like their rates though. If you go to your nearest AZREIA meeting, there's a note sub group that meets here in Phoenix, or you can try the main meeting if you're not waiting to make the drive up. 

If you're using it for your down payment, keep in mind you'll want to season it in your account for at least 2 months before applying for the loan.

If you have multiple properties, you might try a portfolio loan. https://www.foacommercial.com/portfolio-loan/

Has your agent put you in contact with some local builders in that area? Might be able to find not only a buyer, but also why someone might have passed this one up previously. When you say you bought it after state picked it up a decade ago, then it wasn't through a tax lien, how did you purchase it?

@Victor Amezquita,

As Bob pointed out, there are areas of the Greater Phoenix metro that might for what your looking for, depending on your investing goals and budget. 

The most desirable and in demand areas, easiest to rent for highest $/sqft are the three urban core areas: downtown Phoenix,  Tempe and south Scottsdale. Your cap rates though are also the lowest. Most investors are looking for value add acquisitions as rent increases and MF are popular with industrial investors still.

Depending on your budget there are alternatives like areas between the cores and suburbs, non traditional duplexes (house with guest house or double house lots) to name a few.

Contact me if you'd like to know more.

@David Pascual, if you have steady W2, FHA or coventional with or without downpayment assistance might be your best bet(i.e. cheapest money with minimal entanglements, that would leave your parents credit out of the picture.) Even though they are your parents, this puts them at risk for an investment that you are benefiting from, and possible strain on your relationship if anything goes south. That's why I'm advocating the easier route would be traditional financing with them gifting or loaning you the down (talk with your lender about the details, as gifting doesn't hurt your DTI while loan will.) I've seen several that have had all the down and all closing costs rolled into the loan or had a portion of that covered by gift or IRA loan from relatives, giving them that first property to work with.

If you really want to get creative there would be the possibility of them buying and leasing back to you, but that's a more complicated transaction. This has the benefit of them retaining the asset for their contribution and keeps the lines of responsibility a little cleaner. 

@Diane G. Along with the hasel/work/headaches, C class doesn't  fair as well in market fluctuations. That is why I'm a fan of B class properties. When markets improve, you may lose tenants that move up to A class properties, but you also get those in C class that want to upgrade. In a down market, you get the opposite effect (A class tenants may downgrade to save money to your B class properties.) Demand always seems to stay steady, where as it doesn't seem to as well for C and A class. 

Also B class properties are easier to unload. If you buy a great B class property in a great area, your pool of buyers is greater. With Phoenix area being such a hot market, these can be a challenge to find. I've talked with owners of these types of properties along the central corridor (between the 7s, 7th ave and 7th st), and most of them do not have plans on selling anytime soon, as they perform great and market only shows slight slowdown in increases for the foreseeable future. 

Class C are going to be older, and most thst are available are around I-17 and in older parts of Phoenix, tempe and South Scottsdale. If you're looking for a portfolio of condos there are several of those being floated around on and off market. Depends on what area of town you are looking for?

I'd be interested. When and Where?

I'd second what Denny said. Most owners know what they have with rents rising and cap rates compressed, so even off market deals that make sense right now are hard to come by. If you do find anything, let me know, as I have several investors interested in JVing on a deal. 

Are these 4 condos in a complex or a 4-plex? I'm a little confused by the HOA. HOAs are a double edged sword in investing, as you don't have any control over them (even if you join the board, which is a fun adventure in itself) while you don't have to worry about majority of upkeep and exterior maintenance.

Also, you mentioned raising rents across the board, but I don't see a budget for capex (capital expenditures) figured into your return. If you don't figure out how long to recapture that money, the deal might not be so enticing. 

Another thing, are the expenses and rents actual or proforma? Have you seen actual expense and P&L, rent rolls? Have you made an offer or LOI yet and are in the due diligence phase or just tire kicking still?

Tim, 

Great name by the way. You might try meet up, AZREIA website, search members on BP, so Google search, ask on Facebook, zillow, trulia, Realtor.com. we're out there, hiding in plain site. 

One of the first questions I'd ask them is how long they've been investing, how many properties they own, and how do you feel about making low ball offers? Those three questions should Weed some of them out for you.

Good luck!