Random
Footballguy
why do you hate me?
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*** Official Real Estate Forum *** (5 Viewers)
- Thread starter jeff_eaglz
- Start date
BassNBrew
Footballguy
Where did that come from?
Random
Footballguy
Kidding. Just that yesterday you told me I did something that I could be sued for and today this. To answer your question (and I think you already know this) its a favor from a friend where I work running the credit apps. Probably not something they should be doing, but also not a big deal.
BassNBrew
Footballguy
Yesterday's response was just an effort to help you from having some ####### cause you a bunch of grief. Definately collect a fee as Mike suggested. Handing out paper and collecting money is a pretty easy way to prevent that 1 in 100 scenario of a lawsuit. I can't imagine your friend has a source for free credit reports, so you can reimburse him the expense. The last question/response was directed to the board as I'm curious as to how others are handling pulling credit and what they're seeing in the market.Lastly, since you're getting a good response to your efforts, have you found a mortgage broker to pre-qualify any of these potential buyers?
Random
Footballguy
From the "rent to own" ad in the paper...
Got a call today from a guy asking about the house. Didn't want to rent for $1100/mo and then asked if I was an investor. I asked him why and he asked if I would be interested in buying a double wide for him for two years, at which time he would purchase it. He said he would pay 12%-13% interest.
I told him I would think about it and we talked a little more. Here's his scoop. He's a truck driver going through a divorce. Says he makes 1800/wk and has the paystubs to prove it and just wants to get this double wide but the divorce has ruined his credit. The doublewide would be in a trailorpark and costs 61K. He says he could give me 10% up front.
Anyone have a suggestion on how to best do this (or should I avoid it)?
Rent?
Lease Option?
Land Contract?
Got a call today from a guy asking about the house. Didn't want to rent for $1100/mo and then asked if I was an investor. I asked him why and he asked if I would be interested in buying a double wide for him for two years, at which time he would purchase it. He said he would pay 12%-13% interest.
I told him I would think about it and we talked a little more. Here's his scoop. He's a truck driver going through a divorce. Says he makes 1800/wk and has the paystubs to prove it and just wants to get this double wide but the divorce has ruined his credit. The doublewide would be in a trailorpark and costs 61K. He says he could give me 10% up front.
Anyone have a suggestion on how to best do this (or should I avoid it)?
Rent?
Lease Option?
Land Contract?
BassNBrew
Footballguy
Going to throw out some random thoughts and questions...1. Do you have $61K laying around, hard to get financing on mobiles? If you really want to get into real estate investing, $61K could get you into 6 reantal properties.2. $61K seems high for a doublewide considering you're not getting any land in the deal. Basically you're buying a vechicle...something that will likely depreciate as time goes by.3. Who's paying for the trailer park lease?4. With financing requirements likely tightening and mobiles being especially tight, is it realistic that he can buy it in two years? Do you want to own a doublewide for the long term?5. Mike posted a link to the trailer king's site somewhere in this thread...great read and might help you make this a winner.
Random
Footballguy
1 I own the flip house free and clear, and will possibly end up renting it if it doesn't sell in the somewhat near future. I could open a HELOC on that if it would turn out to be worth it. 2 Its a NEW doublewide.
I thought about it depreciating already, which is partially why this deal doesn't excite me yet.3 Haven't discussed that yet. Obviously if I do this, he's covering all related expenses.4 I have no idea really. Like I said above, if I can make this worth it I wouldn't care if I owned a doublewide. With him putting 10% down and willing to pay 12-13%, it just seems like I should be able to make this work.5 Cool, thanks BNB.
Jeff Pasquino
Footballguy
Depends on your state.Call a title company and ask that question.Not all costs are the same - titlework and loan costs are NOT the same, but both appear at closing.Also escrows can add up, if you need to establish them.
Jeff Pasquino
Footballguy
Did you mean Lonnie Scruggs, or something else?
Jeff Pasquino
Footballguy
$61K????????
JAA
Footballguy
As some may or may not know I am getting ready to buy a home in MA w/o an agent. In MA there is a standard disclosure form for buyers which I have. I would also like to submit to the listing agent questions for them to answer prior to me viewing the home. I wanted to get some feedback from the group here. My plan is when I call the listing agent to request a viewing, I would ask them to answer the questions and fax them back to me. I would prefer they signed the bottom of the questionaire for obvious reasons, would this be inappropriate to ask? Any and all thoughts are very appreciated. Thanks
fontbonners
Footballguy
Advice appreciated....
I have about 20k in funding available and am looking for a new way to invest, and have always been interested in real estate/renting. I have asked questions here before, and have done some research on my own, but want some "real world" opinions...
We live in a suburb of Saint Louis, Missouri. For those familiar with the area, I would probably be looking to invest in St Charles County (St.Peters/O'Fallon/LSL). Anyway, I was thinking of buying a condo as I can find them in the area listing at 75k or so for a 2 bed 1 bath unit.
1. Is 20k sufficent to obtain financing for a 75k purchase?
2. Are condos the best route for a first timer? Or should we stick with townhomes? There are also some extreme fixer upper homes in the same price range (one had nearly a full acre of land)....
3. I had planned on increasing my umbrella insurance amount and ensure it included the additional liability...is this the best route, or is setting up an LLC/S-Corp better?
4. Any other advice?
Thanks in advance!
I have about 20k in funding available and am looking for a new way to invest, and have always been interested in real estate/renting. I have asked questions here before, and have done some research on my own, but want some "real world" opinions...
We live in a suburb of Saint Louis, Missouri. For those familiar with the area, I would probably be looking to invest in St Charles County (St.Peters/O'Fallon/LSL). Anyway, I was thinking of buying a condo as I can find them in the area listing at 75k or so for a 2 bed 1 bath unit.
1. Is 20k sufficent to obtain financing for a 75k purchase?
2. Are condos the best route for a first timer? Or should we stick with townhomes? There are also some extreme fixer upper homes in the same price range (one had nearly a full acre of land)....
3. I had planned on increasing my umbrella insurance amount and ensure it included the additional liability...is this the best route, or is setting up an LLC/S-Corp better?
4. Any other advice?
Thanks in advance!
I posted this in another thread, but someone pmd me and told me to come here:
I’m currently looking to buy some vacant land to sit on for awhile (3-5 years) and then eventually build a house on. This land should cost ~ $100k. What I’m doing is looking for the most advantageous way for me to obtain this financially. Worst case scenario is that I finance 100% of this through a fixed loan, which I can currently afford; but I am looking for some other options.
Here is what I’m currently working with:
Equity in primary residence - $38K
Liquid Cash (this does not include emergency cash) - $31K
Stock I can turn into cash - $6K
Rollover IRA - $30KSo I’m sure there are plenty of options:
0 down, 100% financed
Traditional 20% down, 80% financed
Take a loan out against my equity in my primary residence
Take a loan out against my Rollover IRA (not sure if this is even possible)
Anything else
So I’m looking for some guidance on some ways to approach this that will help me out via taxes, etc….
I’m currently looking to buy some vacant land to sit on for awhile (3-5 years) and then eventually build a house on. This land should cost ~ $100k. What I’m doing is looking for the most advantageous way for me to obtain this financially. Worst case scenario is that I finance 100% of this through a fixed loan, which I can currently afford; but I am looking for some other options.
Here is what I’m currently working with:
Equity in primary residence - $38K
Liquid Cash (this does not include emergency cash) - $31K
Stock I can turn into cash - $6K
Rollover IRA - $30KSo I’m sure there are plenty of options:
0 down, 100% financed
Traditional 20% down, 80% financed
Take a loan out against my equity in my primary residence
Take a loan out against my Rollover IRA (not sure if this is even possible)
Anything else
So I’m looking for some guidance on some ways to approach this that will help me out via taxes, etc….
BassNBrew
Footballguy
Used to live there...nice area.1) More than enough.2) I like single family. Unique and you're not competing against apartments. HOA fee are lower. In a world of oranges, I want to have the apple. Your market may be different.3) I'm in the minority, but screw the LLC and increase the insurance. More bang for the buck.
BassNBrew
Footballguy
Is interest on a lot loan deductible? If not, then equity in your primary would be the way to go.I posted this in another thread, but someone pmd me and told me to come here:
I’m currently looking to buy some vacant land to sit on for awhile (3-5 years) and then eventually build a house on. This land should cost ~ $100k. What I’m doing is looking for the most advantageous way for me to obtain this financially. Worst case scenario is that I finance 100% of this through a fixed loan, which I can currently afford; but I am looking for some other options.
Here is what I’m currently working with:
Equity in primary residence - $38K
Liquid Cash (this does not include emergency cash) - $31K
Stock I can turn into cash - $6K
Rollover IRA - $30KSo I’m sure there are plenty of options:
0 down, 100% financed
Traditional 20% down, 80% financed
Take a loan out against my equity in my primary residence
Take a loan out against my Rollover IRA (not sure if this is even possible)
Anything elseSo I’m looking for some guidance on some ways to approach this that will help me out via taxes, etc….
Jeff Pasquino
Footballguy
fontbonners
Footballguy
Is it easy to obtain financing in the LLCs name? Never done this before, so Im not sure how it works. Setup/file LLC papers with the State of Missouri, put in 20k equity, and a loan should be doable?LLC fees are not that much (few hundred dollars) so Im not to concerned there....I guess I would need a seperate insurance policy in the name of the LLC, which would add to the cost? I would probably prefer this route as I have quite a bit of personal investments (401k, IRAs, and so on) but am concerned about getting financing in the LLCs name....How much should I put down on a 75k property? Is 20k about right or maybe too much?When I buy the condo/house, is it better to forget having a buyer realtor and just use the sellers? Maybe easier to negociate a lower price?
Jeff Pasquino
Footballguy
20% can get you in most any property (residential), so 15K is enough for the down and 5K would cover closing and any upkeep / upgrades.Condos are a mixed bag. Really depends on what the rental area is like. Do people rent them there usually? IMHO, THs are always better than condos.Extreme fixer uppers are NOT for the beginners.I'll defer #3 to BNB and Mike - but each state is different.As for investing in RE in general, what are you looking to get out of it in the long run? How much $ in a year? 5 years? Are you prepared to be a landlord (LL)?
I'm not sure, but I assume so......Aren't you a loan officerIs interest on a lot loan deductible? If not, then equity in your primary would be the way to go.I posted this in another thread, but someone pmd me and told me to come here:
I’m currently looking to buy some vacant land to sit on for awhile (3-5 years) and then eventually build a house on. This land should cost ~ $100k. What I’m doing is looking for the most advantageous way for me to obtain this financially. Worst case scenario is that I finance 100% of this through a fixed loan, which I can currently afford; but I am looking for some other options.
Here is what I’m currently working with:
Equity in primary residence - $38K
Liquid Cash (this does not include emergency cash) - $31K
Stock I can turn into cash - $6K
Rollover IRA - $30KSo I’m sure there are plenty of options:
0 down, 100% financed
Traditional 20% down, 80% financed
Take a loan out against my equity in my primary residence
Take a loan out against my Rollover IRA (not sure if this is even possible)
Anything elseSo I’m looking for some guidance on some ways to approach this that will help me out via taxes, etc….
Jeff Pasquino
Footballguy
You can't "sit" on vacant land with a conventional loan - they want a property on it.The best you're likely to get is about 50-60% LTV of a loan. That means 40-50K down.I posted this in another thread, but someone pmd me and told me to come here:
I’m currently looking to buy some vacant land to sit on for awhile (3-5 years) and then eventually build a house on. This land should cost ~ $100k. What I’m doing is looking for the most advantageous way for me to obtain this financially. Worst case scenario is that I finance 100% of this through a fixed loan, which I can currently afford; but I am looking for some other options.
Here is what I’m currently working with:
Equity in primary residence - $38K
Liquid Cash (this does not include emergency cash) - $31K
Stock I can turn into cash - $6K
Rollover IRA - $30KSo I’m sure there are plenty of options:
0 down, 100% financed
Traditional 20% down, 80% financed
Take a loan out against my equity in my primary residence
Take a loan out against my Rollover IRA (not sure if this is even possible)
Anything else
So let's look at that scenario:
$50K down, $50K financed.
Let's say everything is great and your land increases in value for 4 years and goes up to $150K in value. That's probably best case scenario.
You sell it and you pocket a $50K profit. All good right?
Wrong.
Four years of payments.
Four years of taxes.
Four years of sunk costs (opportunity lost with that 50K).
Closing costs on purchase.
Closing costs on sale.
Add all that up in a spreadsheet and you tell me if you have more than $20K in profit left in a best case scenario - and that's over 4 years.
$50K to generate $20K over 4 years - that can be topped with other investment strategies.
I'm curious to see your math results.
Jeff Pasquino
Footballguy
BNB, can you touch on this?I wouldn't want to have a dissimilar property too much if I wanted to re-sell and/or get a refi. The appraisal would be a real PITA.
fontbonners
Footballguy
Tenents can be a pest, which I am prepared to deal with. Im am looking for something to hold long-term probably...honestly I would expect to break even or come close to it the first time out and improve on each additional investment....I understand its a learning experience...I figured THs were better, and I believe they can be easier to finance as well....that will probably be my goal...
Thanks for the feedback. If it makes a difference, I'm interested in buying the lot to build on it, not to sell after a few years. So the bottom line $$ isn't what I'm looking at. I fully understand that I'll have to incur everything you stated, but the end game is to build a house on this property, not sell it. So I'm not losing opportunity with the 50k, b/c the land is what I'm after.You can't "sit" on vacant land with a conventional loan - they want a property on it.The best you're likely to get is about 50-60% LTV of a loan. That means 40-50K down.I posted this in another thread, but someone pmd me and told me to come here:
I’m currently looking to buy some vacant land to sit on for awhile (3-5 years) and then eventually build a house on. This land should cost ~ $100k. What I’m doing is looking for the most advantageous way for me to obtain this financially. Worst case scenario is that I finance 100% of this through a fixed loan, which I can currently afford; but I am looking for some other options.
Here is what I’m currently working with:
Equity in primary residence - $38K
Liquid Cash (this does not include emergency cash) - $31K
Stock I can turn into cash - $6K
Rollover IRA - $30KSo I’m sure there are plenty of options:
0 down, 100% financed
Traditional 20% down, 80% financed
Take a loan out against my equity in my primary residence
Take a loan out against my Rollover IRA (not sure if this is even possible)
Anything else
So let's look at that scenario:
$50K down, $50K financed.
Let's say everything is great and your land increases in value for 4 years and goes up to $150K in value. That's probably best case scenario.
You sell it and you pocket a $50K profit. All good right?
Wrong.
Four years of payments.
Four years of taxes.
Four years of sunk costs (opportunity lost with that 50K).
Closing costs on purchase.
Closing costs on sale.
Add all that up in a spreadsheet and you tell me if you have more than $20K in profit left in a best case scenario - and that's over 4 years.
$50K to generate $20K over 4 years - that can be topped with other investment strategies.
I'm curious to see your math results.
JAA
Footballguy
I am trying to figurer out if I should request this information before or after seeing the home. My original opinion was to get answers before, that way I dont waste anyones time bringing them out to see the place. What I am hearing you say is the opposite, the listing doesnt want to waste time answering the questions until I have seen the place.
JAA
Footballguy
What if I asked them these questions when they were showing me the property? Would they not answer them?
fontbonners
Footballguy
Can you get a mortgage in the name of an LLC only? Not my name (or in the members names)?
I think the LLC route will be the way we go....its very cheap in Missouri and I am a tax guy so the 1120 mess is no big deal....
Nolo has something called LLC Maker that I can use for the Operating Agreement...anyone ever use it?
I think the LLC route will be the way we go....its very cheap in Missouri and I am a tax guy so the 1120 mess is no big deal....
Nolo has something called LLC Maker that I can use for the Operating Agreement...anyone ever use it?
Jeff Pasquino
Footballguy
If you asked me verbally what I allegedly already had written down, I'd stop you and ask you to read the disclosure and the listings, and then ask whatever wasn't covered.You have to assume that the property is in good shape when you approach it. If you place a contract on a property "subject to an inspection and satisfactory title and disclosures" you are covered.These clauses give you an "out" to not buy if not happy with the answers.95+% of houses are fine. Also keep in mind that home inspectors (here I go again) will scare you. That's their job. They are inspectors, and like most they are paid to look for defects. They won't tell you if they are big or small (well, good ones will - "that's a bad roof, foundation is bad, etc.) but on a perfect house - they'll still find stuff. Any non-new house will have evidence of wear. Just know that. Life goes on.
Jeff Pasquino
Footballguy
Yes, it is a commercial loan. Seek a real estate club to find out how, or a competent RE attorney or accountant for clues. Most likely a portfolio lender (local bank that doesn't re-sell loans - keeps them in house) has programs for this.
Sounds like a winner.
No idea.Seriously - go find your local RE club. Ask these questions there. Local law applies.
Jeff Pasquino
Footballguy
BassNBrew
Footballguy
I'm probably not the best person to ask, but how is an LLC with no history going to have a credit history strong enough to warrant a loan? I'm thinking most banks are going to want your personal guarantee or a whole lot of money down.On $75K I would want more than $7500 down.I'm a big proponent of buyer's agents. Go solo and you may be able to nut out an add'l $500 if you're prepared to be an ### and the seller is motivated and the agent is motivated. A good buyer's agent will put $500 in your pocket via other means....more options to pursue / their expertise.
BassNBrew
Footballguy
I'm not a loan officer or a tax expert, but I thought that land interest isn't deductible until you sell, which you won't be doing.I'm not sure, but I assume so......Aren't you a loan officerIs interest on a lot loan deductible? If not, then equity in your primary would be the way to go.I posted this in another thread, but someone pmd me and told me to come here:
I’m currently looking to buy some vacant land to sit on for awhile (3-5 years) and then eventually build a house on. This land should cost ~ $100k. What I’m doing is looking for the most advantageous way for me to obtain this financially. Worst case scenario is that I finance 100% of this through a fixed loan, which I can currently afford; but I am looking for some other options.
Here is what I’m currently working with:
Equity in primary residence - $38K
Liquid Cash (this does not include emergency cash) - $31K
Stock I can turn into cash - $6K
Rollover IRA - $30KSo I’m sure there are plenty of options:
0 down, 100% financed
Traditional 20% down, 80% financed
Take a loan out against my equity in my primary residence
Take a loan out against my Rollover IRA (not sure if this is even possible)
Anything elseSo I’m looking for some guidance on some ways to approach this that will help me out via taxes, etc….
BassNBrew
Footballguy
I like single family homes. When dealing with condos and townhomes in most normal markets, there are always several virtually identical to yours and someone willing to underprice you. For example...two identical condos with for rent signs up...likely propspective tenants will play one against the other. With single family homes I have something that someone will fall in love with and no one else in the neighborhood has. One story/two story, big yard/ssmall yard, close to shopping/rural, great room/formal rooms...you get the point. If I have something somewhat unique I'm not competing as fircely with the neighbor. Don't like the price on my ranch home, go climb the steps next door.
BassNBrew
Footballguy
Unless your in a rapidly appreciating area or have id'd a one of a kind property, it probably makes finance sense to wait closer until the time you're ready to build. $100K at 8% a year represents $8000 a year in lost cash...not to mention property taxes.Thanks for the feedback. If it makes a difference, I'm interested in buying the lot to build on it, not to sell after a few years. So the bottom line $$ isn't what I'm looking at. I fully understand that I'll have to incur everything you stated, but the end game is to build a house on this property, not sell it. So I'm not losing opportunity with the 50k, b/c the land is what I'm after.You can't "sit" on vacant land with a conventional loan - they want a property on it.The best you're likely to get is about 50-60% LTV of a loan. That means 40-50K down.I posted this in another thread, but someone pmd me and told me to come here:
I’m currently looking to buy some vacant land to sit on for awhile (3-5 years) and then eventually build a house on. This land should cost ~ $100k. What I’m doing is looking for the most advantageous way for me to obtain this financially. Worst case scenario is that I finance 100% of this through a fixed loan, which I can currently afford; but I am looking for some other options.
Here is what I’m currently working with:
Equity in primary residence - $38K
Liquid Cash (this does not include emergency cash) - $31K
Stock I can turn into cash - $6K
Rollover IRA - $30KSo I’m sure there are plenty of options:
0 down, 100% financed
Traditional 20% down, 80% financed
Take a loan out against my equity in my primary residence
Take a loan out against my Rollover IRA (not sure if this is even possible)
Anything else
So let's look at that scenario:
$50K down, $50K financed.
Let's say everything is great and your land increases in value for 4 years and goes up to $150K in value. That's probably best case scenario.
You sell it and you pocket a $50K profit. All good right?
Wrong.
Four years of payments.
Four years of taxes.
Four years of sunk costs (opportunity lost with that 50K).
Closing costs on purchase.
Closing costs on sale.
Add all that up in a spreadsheet and you tell me if you have more than $20K in profit left in a best case scenario - and that's over 4 years.
$50K to generate $20K over 4 years - that can be topped with other investment strategies.
I'm curious to see your math results.
BassNBrew
Footballguy
The listing agent can't answer some of your questions. If you were the seller, how likely are you to jump through hoops to gather all this for someone who hasn't step foot in your house and may not like the exterior paint color. Go look at the house and then fire away if it's something that interests you.
BassNBrew
Footballguy
You can do this if you ignore the fact that the due on sale clause is likely trigger and you may be commiting loan fruad. Regardless you're still going to need insurance. I'd prefer to spend the $200 and up the liability limits and have the insurance company's lawyers defending me then paying for my own attornies. I know this varies by state, but NC requires an annual filing and fee. Our outfit handles 300+ doors and we've never had a lawsuit in 20+ years.proninja said:
Beetlejuice
Footballguy
Uh...yeah. What Ninja and Bass said. No doubt about it. Unless your market is so dead that listings agents are begging for showings, it is highly unlikely anybody would take the time to complete the form. Additionally, what good is the agents signature going to do you in this situation? Much of what you are asking would be needed to be answered by the seller themselves, not the agent. There's a time and place for those answers, but it is not prior to your even viewing the home. Seriously JAA, you expect a listing agent to complete that form just for you to take the time to view the property? Granted, laws do vary from state to state. But as Ninja and Bass mentioned, much of what you are asking you can find on an internet search or the MLS plano. The remainder of what you are asking could be found through a home inspection or on the sellers property disclosure statement once you have an accepted contract. Again, I am not certain as to what your laws are in MA- but in AZ both the inspection and the SPDS are "outs" for the buyer if they do not like what they see.I won't get on my soapbox about using agents...other than to say, use one. Again, unless your market is very different in MA- it is the seller that pays the commissions for the agents involved- not yourself. Using an agent has so many advantages for you that it is silly for you not to do so unless you completely fall in love with a FSBO who is unwilling to compensate your representation. Maybe you have addressed your reasons for not using an agent earlier in this thread, if so then forgive me as I did not read back beyond this particular page. But a good agent, even an average agent, is better than no agent at all.Best of luck!proninja said:
Last edited by a moderator:
Random
Footballguy
Got a potential renter/buyer on the flip lease option (my specialty).
Here's the deal. Lady calls (the overwhelming majority of the calls I've recieved on this l/o have been women) Wednesday night and asks about the L/O. Sounds interested and wants to see it. Met her there last night and she says she loves the place and wants to do it, only thing is the rent is a little high for her. I know what I am asking for rent is borderline too much for this area. Anyway she asks if there's anyway I can reduce the rent to $900 (from $1100). She says she currently pays $600 and just made the last payment on her van (newish honda minivan).
We talked a little more and I told her I might be able to take $900/mo but I would have to add the $200/mo to the purchase price and take a little more upfront. She said that would work.
Her problem is that she is self employed (babysitter) and last year only qulaified for $80k. She told me she now makes twice what she did then and should be able to get the loan next year. No credit problems. Told me she takes in 3K/mo.
She's been renting the same place for 6 years and is being forced out because her LL is moving back in. Sounds like a solid renter.
Notice I said renter. I personally dont think there's a chance in hell she's going to qualify for a loan to buy the place in a year.
Anyway, we're meeting again tonight to discuss the deal (basically for me to tell her if I'm going to take $900). Do any of you have any input? Mike if you were analyzing this as a rental, would you buy it?
I'll basically be rolling my debt on the place into a mortgage (suggestions proninja?) which is about $95k. It would be selling for 132,300 in a year (129,900+2,400), and I've got 11K cash in it right now.
Also for the LL's, If I do agree to do this tonight, and she needs 30 days before she can move in, how much should I collect for her to sign the lease? When does she need to pay?
Thanks again guys.
Here's the deal. Lady calls (the overwhelming majority of the calls I've recieved on this l/o have been women) Wednesday night and asks about the L/O. Sounds interested and wants to see it. Met her there last night and she says she loves the place and wants to do it, only thing is the rent is a little high for her. I know what I am asking for rent is borderline too much for this area. Anyway she asks if there's anyway I can reduce the rent to $900 (from $1100). She says she currently pays $600 and just made the last payment on her van (newish honda minivan).
We talked a little more and I told her I might be able to take $900/mo but I would have to add the $200/mo to the purchase price and take a little more upfront. She said that would work.
Her problem is that she is self employed (babysitter) and last year only qulaified for $80k. She told me she now makes twice what she did then and should be able to get the loan next year. No credit problems. Told me she takes in 3K/mo.
She's been renting the same place for 6 years and is being forced out because her LL is moving back in. Sounds like a solid renter.
Notice I said renter. I personally dont think there's a chance in hell she's going to qualify for a loan to buy the place in a year.
Anyway, we're meeting again tonight to discuss the deal (basically for me to tell her if I'm going to take $900). Do any of you have any input? Mike if you were analyzing this as a rental, would you buy it?
I'll basically be rolling my debt on the place into a mortgage (suggestions proninja?) which is about $95k. It would be selling for 132,300 in a year (129,900+2,400), and I've got 11K cash in it right now.
Also for the LL's, If I do agree to do this tonight, and she needs 30 days before she can move in, how much should I collect for her to sign the lease? When does she need to pay?
Thanks again guys.
Davej626
5.56 solves all
Well, if she is a good renter, but can't buy the place in the time limit of the lease, then you should get to keep the earnest money. You then redo the L/O with another earnest money amount based on the new sale price at the time of the sale. If she doesn't want to buy the house then, you just redo the L/O again. That is my understanding of how a l/o works.As for renting, and signing the lease, it all depends on your state. In Mass, we can only collect a first, last and security equal to a month's rent. So if the rent is 500, first, last and security means we can only get 1500 at the most when beginning a lease. Your results may vary.
Random
Footballguy
Re the ernest, that is correct. But I dont really want this to happen.As for collecting the first months rent and such, if she wants to sign today but cant move in for 30 days, do I collect first months rent and earnest money today? Or some portion until she actually starts the lease? Should I ask for say $1000 to "hold" it for her for 30 days?
Thanks...does anyone else know the answer to the above?I'm not a loan officer or a tax expert, but I thought that land interest isn't deductible until you sell, which you won't be doing.I'm not sure, but I assume so......Aren't you a loan officerIs interest on a lot loan deductible? If not, then equity in your primary would be the way to go.I posted this in another thread, but someone pmd me and told me to come here:
I’m currently looking to buy some vacant land to sit on for awhile (3-5 years) and then eventually build a house on. This land should cost ~ $100k. What I’m doing is looking for the most advantageous way for me to obtain this financially. Worst case scenario is that I finance 100% of this through a fixed loan, which I can currently afford; but I am looking for some other options.
Here is what I’m currently working with:
Equity in primary residence - $38K
Liquid Cash (this does not include emergency cash) - $31K
Stock I can turn into cash - $6K
Rollover IRA - $30KSo I’m sure there are plenty of options:
0 down, 100% financed
Traditional 20% down, 80% financed
Take a loan out against my equity in my primary residence
Take a loan out against my Rollover IRA (not sure if this is even possible)
Anything else
PN - Thanks. The deal is that I'm relatively positive that these lots won't be there in 3-5 years. I can afford the payments on the lot for that time, and I fully understand that I could be realizing more money during that time frame if I invest it somewhere else, but if I did that, I would be taking a huge risk that the lots wouldn't be there.proninja said:TF>hiUnless this is a very rare lot that you must have, I'd buy a rental property to hold onto for the same timeframe, get appreciation $ on a larger dollar amount, and have lower carrying costs due to rent. In 3-5 years, sell that place, buy a lot, and you'll be ahead.I'm not a loan officer or a tax expert, but I thought that land interest isn't deductible until you sell, which you won't be doing.I'm not sure, but I assume so......Aren't you a loan officerIs interest on a lot loan deductible? If not, then equity in your primary would be the way to go.I posted this in another thread, but someone pmd me and told me to come here:
I’m currently looking to buy some vacant land to sit on for awhile (3-5 years) and then eventually build a house on. This land should cost ~ $100k. What I’m doing is looking for the most advantageous way for me to obtain this financially. Worst case scenario is that I finance 100% of this through a fixed loan, which I can currently afford; but I am looking for some other options.
Here is what I’m currently working with:
Equity in primary residence - $38K
Liquid Cash (this does not include emergency cash) - $31K
Stock I can turn into cash - $6K
Rollover IRA - $30KSo I’m sure there are plenty of options:
0 down, 100% financed
Traditional 20% down, 80% financed
Take a loan out against my equity in my primary residence
Take a loan out against my Rollover IRA (not sure if this is even possible)
Anything else
If you won't be ahead doing this, invest your money elsewhere and buy the lot in 3-5 years when you're ready to build on it. HTH.
So I'm looking for the most beneficial way to do this.....do you know if I can take a deduction on the interest on a vacant lot?
TIA
stevegamer
Footballguy
It's (obviously) not going to qualify for a home mortgage deduction, so we're lookign at investment interest expense.I'd look into investment interest deductions on the IRS web site - it's www.irs.gov I'm not very familiar with that section of the tax law.
Random
Footballguy
Update on the above lady:She is very determined to do whatever it takes to get into the place. She is trying to get a 5K loan so she can do the lease option. She really wants to buy, but I have strong doubts that she'll be able to.We talked about renting (partly because I chickened out on the L/O). She agreed to $1100/mo and says she will be able to sign a lease on Monday. I told her to call me when she has the deposit ($1100) and we'll go from there. So, my question now is, am I making a mistake by renting instead of trying to sell? I'm torn. It looks like I would be able to roll everything we have put in the house into a mortgage (using 20yr, 7%, 105K) and still come out ahead by 150/mo after the mort, taxes and insurance. On the other hand, I'm still looking at making a nice profit if my realtor gets it sold (about 15K).Anyone care to weigh in on which is better?
Jeff Pasquino
Footballguy
Not an attorney, but I don't believe this is triggering a due on sale or committing loan fraud.Just because you haven't done it or seen it done doesn't make it illegal.
Jeff Pasquino
Footballguy
If you are able to sell and mak $15K, that's 100x what you get per month ($150). You do get tax benefits though as a LL.I don't see downside to giving her the L/O. Just get a RE attorney that another local investor has used, pay him / her for the L/O docs and do it.Treat the NROC different than earnest money. That's $ she puts up for the option to own the place later on, but it's gone if she fails to buy (Non-refundable option consideration). Get $5K up front and a bigger sale later on is a winner.Get her involved with a good mortgage broker to see how she can buy it. Maybe she can -that's what you want anyway.The downside is you can only sell it as "newly renovated" now, unless you fix it after she leaves.I'd investigate the L/O much more. Maybe even call other L/O ads in the paper if you don't know other investors in the area.
Jeff Pasquino
Footballguy
If you use $ from another property, that interest is deductible. HINT HINT....PN - Thanks. The deal is that I'm relatively positive that these lots won't be there in 3-5 years. I can afford the payments on the lot for that time, and I fully understand that I could be realizing more money during that time frame if I invest it somewhere else, but if I did that, I would be taking a huge risk that the lots wouldn't be there.proninja said:TF>hiUnless this is a very rare lot that you must have, I'd buy a rental property to hold onto for the same timeframe, get appreciation $ on a larger dollar amount, and have lower carrying costs due to rent. In 3-5 years, sell that place, buy a lot, and you'll be ahead.I'm not a loan officer or a tax expert, but I thought that land interest isn't deductible until you sell, which you won't be doing.I'm not sure, but I assume so......Aren't you a loan officerIs interest on a lot loan deductible? If not, then equity in your primary would be the way to go.I posted this in another thread, but someone pmd me and told me to come here:
I’m currently looking to buy some vacant land to sit on for awhile (3-5 years) and then eventually build a house on. This land should cost ~ $100k. What I’m doing is looking for the most advantageous way for me to obtain this financially. Worst case scenario is that I finance 100% of this through a fixed loan, which I can currently afford; but I am looking for some other options.
Here is what I’m currently working with:
Equity in primary residence - $38K
Liquid Cash (this does not include emergency cash) - $31K
Stock I can turn into cash - $6K
Rollover IRA - $30KSo I’m sure there are plenty of options:
0 down, 100% financed
Traditional 20% down, 80% financed
Take a loan out against my equity in my primary residence
Take a loan out against my Rollover IRA (not sure if this is even possible)
Anything else
If you won't be ahead doing this, invest your money elsewhere and buy the lot in 3-5 years when you're ready to build on it. HTH.
So I'm looking for the most beneficial way to do this.....do you know if I can take a deduction on the interest on a vacant lot?
TIA
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