Hard Money / Refi /Seasoning
Is this workable:
5+ units
buy with Hardmoney + seller financing.
After fixed up and turned over refi to coventional.
80% LTV max is what we can get in Texas ( I think)
Will seasoning be an issue, if so, how long?
Anybody done this before, I am low on Cash now (doesnt every body 
Thanks for any input
nolo press had all the porm on cd for like $30.
Check out http://www.nolo.com/articleByCat.cfm/catId/5944A0DA-71B3-49EA-BF5D300558FB66A9
Wow, thanks guys! I honestly appreciate that.
-Mike
Even if you purchase a generic lease form, you still need an attorney to review it for compliance with your own state and county landlord tenant law.
no. 100 SFR are much more difficult to maintain, have higher taxs (typically), and if one is vacant you still have a "100%" short fall for that unit.
Granted if the are flowing, you can steal from peter to pay call.
100 units might be at 1 address and say 5 acres of land, where the SFRs are going to be all over the place.
Just my opinion.
If there were no limits to the financing available to one investor on single families, then the singles would have more merit. However, try talking to any lender about 100 individual loans. Sometimes they will do a blanket loan on a number of singles, but that is hard to get done. Think about all the closing costs and time involved in just the closings to purchase. I would say the efficiencys of scale and the financing tip the scales toward multis.
If you can buy cheap singles for $10-20k per home and own them with cash and rent them out for $450-600/mth, then I have been going for singles.
why do you feel the SFR is better?
All the above are good responses. For me the answer, of course, is do both
I agree with the conclusion. I try to do both.
Residential Tenant, "I want to trash your place and move out before my lease is up."
Commercial Tenant, "I want to spend $100,000 to renovate your building, but only if you give me another 10 years on my lease."
I think the future commitment under the lease (e.g. a 10 yr lease) would be more important.
Personally I vote #1- buy something profitable now, get it ready for rental, get it occupied, get the bugs worked out.
Then, perhaps before you move, turn it over to a property management company and see how they do with it while you are still in a position to supervise and reclaim control if necessary.
You could even put your current rental under management now- perhaps try two companies out.
Once you have a good management company who does a good job ensuring your cash flow continues, you will be able to continue investing in your area of choice even if you are not present.
Three reasons for this: One, you get income and experience now. Two, this is a great time to buy. And three, I share your concerns with purchasing property where prices are too high to cash flow, so you want to set up a system to allow you to invest in cash flow areas.
Chris
Long-term (15-20 year) goals are to own ~350-500 units for cash flow. Sometimes I get sidetracked by thinking about office or retail, but I always come back to owning large multi-unit complexes....
why maint and hassle of 500 units/tenants, v. 1 Home Depot, or other big commercial building?
Well, i do agree with chris, if you are serious about your target level of rental ownership. buy now. buy now.
Your comments give me the impression that u understand the pitfalls of managing/renting proerty.
The more properties you have will make it easy to purchase more.
because u will have credibility in the industry and banks do give priority to a legit real estate investor.
good luck
but i do think real estate may take your focus from grad school. So u probably wont be top of the class...but u will have a better start financially.
good ;luck again
call him back and tell him that.
maybe it was an oversite?
The owner apparently though option to purchase is the same thing as owner financing. So looks like no deal to me.
Actually he is not confused. He is an attorney that structured the deal this way. Here is what he says:
".. you would be leasing the entire building subject to the existing leases - and keeping all the rents. It is not structured in my favor - beyond that of the default aspect - such that I do not have to foreclose on the property to get it back. "
My old Jewish boss used to say "If in doubt, do nothing."
[addsig]
I think the land contract would be more favorable for you- you get an immediate interest that the option will not provide. You can take depreciation deductions, etc., that will not be available to you if you simply lease the property. Essentially it is the difference between own now, or lease now and own later.
Chris
Here is a partial list of what I ask for .
1.Copy of county, municipal, ans school tax bills for past two years.
2.Copy of water, sewer, and trash bills for past two years.
3.Copy of annual insurance binder fror past two years.
4.Copy of electric bills for common area or house electric use for past twelve months.
5.Copy of all other utiltiy for past twelve months.
6.Have any roof repairs been done during the past 2 years. If yes, please provide details and contractors name and telephone number.
7.List of tenants by name, amount of monthly rent, lenght of lease term, security deposit and copies of each lease.
8.Copies of bills for lawn service and snow removal for past two years.
This is a basic list , I may add or subtract items based on the property.
Add to list.... great idea by the way.......
1. Days on Market ?
2. Motivated Seller ?
3. Short Sale ?
4. Bank Owned ?
5. Needs Buyer Approved for Commercial Loan ?
6. Owner financing available ?
7. What is the most recent appraisal ?
8. what roof/bathroom/window/kitchen/electrical/plumbing
flooring/painting/siding upgrades have been done.
9. crime/break-in info (may need to contact police)
10. all units have separate utils ?
11. parking on/off street.
12. how many can park in driveway, if paved.
13. coin-op washer/dryer in basement ?
14. de-lead certificates if applicable