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Thread: Who owns investment property?

  1. #11

    Default Re: Who owns investment property?

    Quote Originally Posted by PressurePros View Post
    Great dialogue.

    Tim, the bank will give me a 75% LTV at 5.5% no pts. I haven't started shopping yet, thats the deal from the bank I have used for awhile.
    The last non owner occupied we got was at 6.25 so that 5.5 looks pretty attractive. We had been on some three year balloon notes and have been converting them to twenty year amoritization as they come due. As I'm sure you're aware, relationship is everything in banking. Yes we've had to change lenders over the years as they change what they look to add to their portfolio. But it sure feels good to be able to call your banker and have him show up at your office two days later with the papers ready to sign.

    Owning real estate can be fun. The fellow that introduced me to investment property made it all the way to 100 units in his portfolio before it blew apart. Slow and steady works for me.

    Thanks,
    Tim Fields
    Sign2day.com
    301-331-4117

  • #12

    Default Re: Who owns investment property?

    Guys, look into "subject 2" investing. We buy houses w/ no loans, $10 out of pocket, and you can buy hundreds if you want to. I know it sounds like an infomercial, but thats how we do it. My mentor owns in excess of 170 homes, buys an additional 6-8 per month and sells 3-4 per month. Like I said we bought 10, and currently hold 2 but will go on a buying frenzy when I get home. Also, we only buy 5 years or newer so no repairs, and we get better renters.
    Scott Davis
    Confident Roof Cleaning

  • #13

    Default Re: Who owns investment property?

    Quote Originally Posted by scott d. View Post
    Guys, look into "subject 2" investing. We buy houses w/ no loans, $10 out of pocket, and you can buy hundreds if you want to. I know it sounds like an infomercial, but thats how we do it. My mentor owns in excess of 170 homes, buys an additional 6-8 per month and sells 3-4 per month. Like I said we bought 10, and currently hold 2 but will go on a buying frenzy when I get home. Also, we only buy 5 years or newer so no repairs, and we get better renters.
    HUH!!!

    That interests me!!! Where can I learn more about "Subject 2" I am living in my last investment home.

    Ken, remind me when we talk and I will fill you in on what NOT to do with flips, UGH...

    I don't have the energy to deal with Section 8's, when I get around to doing it again I will be looking are higher end tenants who care about and respect the property they are living in.

    Maybe work with real estate agents who have high end buyers that have just moved into the state and need a place for only a few months till the news place is ready.
    JC Power Wash & Soft Wash LLC
    Jim Chesmore
    609-412-3033
    www.JCSoftWash.com

  • #14

    Default Re: Who owns investment property?

    Jim, I am not into the whole flipping concept. Too much risk at this stage of my life. I've thought about it but I am looking more for long term tax shelters and investment properties where tenants are covering mortgage plus. The section eitgh property is a home I picked up for $70K. Its right near a planned expansion of Widener University which will bring up the property values in the neighborhood nicely in five years. For the time being I have made it livable with minimum expense. Section 8 has guaranteed $1200 per month. Once the neighborhood comes up, I will renovate and flip that property.

    I have a backup plan with the owner of a duplex unit I am looking at right now. He does want some cash for his equity, but he will hold the paper. It keeps my credit line clear but his interest rate is around 7%. I don't want to tie everything up in real estate and I will be acting as property manager for the time being and that can become a burden with the other stuff in my life.

    Scott, have you had trouble buying "schedule to" style? I know you have to be a hell of a salesman in today's world. You are obviously making it work for you. I have taken the no money down seminars so I know the basics.. any tips you can give for us RE noobs?
    Ken Fenner
    PressurePros, Inc
    House Washing
    Pressure Washing Companies




  • #15

    Default Re: Who owns investment property?

    It actually doesnt take much in way of selling to get people interested. Lets assume that we are in a down economy and you lose your job. Your house is 5 years or newer so you dont have much (maybe 10-25k) in equity, but you need to sell quickly. But you run into some issues...

    1. Selling costs. Realtors fees, closing costs, etc..Those usually equal about 10-12% of the sale.

    2. You have to hope you can sell it quickly, otherwise you have to make the payments every month.

    If you owe $150,000 and in a decent market you can sell for $165,000, when you factor in closing costs and holding costs (mortgage, maintenance, insurance, utilities, etc), you are looking to shell out well over $20k, leaving you in the hole by $5k+. If you just lost your job, you probably dont have that kind of cash in the bank or dont want to spend it if you do.

    Now I come along. I will buy your property in 3 days. No escrow period, no inspections, no closing costs, no realtor fees, no more utility payments or maintenance fees. No showing the property to dozens of tire kickers hoping for one to bite, then worrying about having to pay money to sell it. You leave free and clear 3 days from now and never have to worry about it again.

    Easy sell? I think so.
    Scott Davis
    Confident Roof Cleaning

  • #16

    Default Re: Who owns investment property?

    AWESOME THREAD!!

    Scott---do you have some recommended reading for all of this?

    Also, how do you locate these needy sellers, or how do they locate you?
    efiF, .M noJ
    (four one seven) 496-7829

  • #17

    Default Re: Who owns investment property?

    Quote Originally Posted by Jfife View Post
    AWESOME THREAD!!

    Scott---do you have some recommended reading for all of this?

    Also, how do you locate these needy sellers, or how do they locate you?
    Jon, let me rustle some material up and Ill let you know.

    We go to Ziprealty.com and narrow down the homes for sale by our criteria, and by how many days on market. Then we go to the tax records and get the homeowners names and make postcards directed to the homeowner using the homeowners name. We use different ones but the one that works the best says somehting like "Selling is home with a realtor is one way, but not the only way! We can buy your house in as little as 3 days." and some other info, but thats the basic.

    If we send out say, 100, we usually get anywhere from 10-20 responses, and only about 2-5 of them are houses we end up looking real hard at to buy. Then we have a vetting process we go through to see which ones fit our criteria. Then it is just selling ourselves to them.
    Scott Davis
    Confident Roof Cleaning

  • #18

    Default Re: Who owns investment property?

    Scott (and others) how do you judge whether a proeprty is investment grade?

    Do you use a GRM factor?

    What is an acceptable cap rate for investors when money is cheap like it is now?

    Most of the properties, including the one I am looking at now come in at a GRM of 9 and a cap rate of 9 also (give or take a couple tenths). Green light?
    Ken Fenner
    PressurePros, Inc
    House Washing
    Pressure Washing Companies




  • #19

    Default Re: Who owns investment property?

    A banker told me early on to use 75. If the rent is 500 than the value of that investment is no more than 37500. My last rental fell at roughly a 40.

    If I am understanding your lingo right, and if your formula is the same as I am using above, why havent you cut a check yet?

    Also, did you get my pm, or is that a family secret?

  • #20

    Default Re: Who owns investment property?

    Quote Originally Posted by PressurePros View Post
    Scott (and others) how do you judge whether a proeprty is investment grade?

    Do you use a GRM factor?

    What is an acceptable cap rate for investors when money is cheap like it is now?

    Most of the properties, including the one I am looking at now come in at a GRM of 9 and a cap rate of 9 also (give or take a couple tenths). Green light?
    When you purchase "subject 2" it is purchased subject to the existing mortgage. Which means we purchase the deed, but there is not a new mortgage taken out. We only purchase homes that have an existing % of 6.5% or less and they have to be fixed rates. 5 years or newer and no repairs needed.
    Scott Davis
    Confident Roof Cleaning

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