Hello again Spexx and fellow RE strategists.

Bought two mobiles in Arkansas and the lot, considering re-selling to one current occupant and writing a note for 10yrs at 9%. Haven't structured up all my options to see which is more attractive for the buyer and I. How difficult will it be on me (aside from any grumbling or eviction) if he defaults. I have never been the bank before (and wouldn't want to sell the note).

From what I've gathered from park managers here in central Arkansas, the process is pretty easy to get the people out if they default.

I'd guess just call up the sheriff if they refuse to leave. In Arkansas the mobiles are considered personal property. Were you selling the home AND the lot or just the home to the person?

I'm assuming since you bought a lot, the homes aren't in a park. What I would do is just call a mobile home park in the area and ask them about the process, they'll know exactly what to do.

Are they including deferred manintenance (i.e. capex reserve), vacancy and management (time is money) in that number?

yeh but they did a pretty solid renovation job in 2005. Was a red tag and they fixed up everything.

I think it's in Chapter 2: Reciprocation. Witness the Watergate story.

I'll be taking the bar in a year (Quebec bar, I'm Canadian) if everything goes to plan and my girlfriend is already working. I have a job pretty much lined up where we currently rent wich is an hour away from any major cities. Our plan is to buy a house that already has two appartments and turn one into a "rooming house" while we live in the other one (would need for both to be empty, ldo). Seasonal employment is pretty high and we have a very high % of functional mentally handicaped people around wich can't afford full rent. We also have a very large contingent of people who rent for months to come ski and/or fish.

Any experience renting from month to month ? Would you advise against it, especially regarding bank loans and such ? How about renting single rooms ? Rent for 3 beds one bath around here is 600-700 on a year lease. I have visited some of the places that rent out single rooms (either MtM, for 6 months or 12months leases) and revenue per month was approximately 320 with utilities for a dump and I have seen some go as high as 400*. Pretty much all of them are 100%. Many of these properties can be had for less than 100k...

The plan is to have these rooms help pay for the mortgage/student debts as fast as possible in order to free up some capital for future investments, not actually enable us to buy property, since we would have the financial means to do so even without landlording. We also plan to move from the property after a few years and actuall buy something more balla (280k pretty much gets you a castle if you snag the right deal around here and we figure to EASILY gross 150k combined by then ...) to have kids/dog/white picket fence, etc.

Also, how feasible is it to be a part-time investor but actually have landlord duties ? I'm looking at 60-70 hours weeks for many years down the road at the small firm I'll be working at and my girlfriend is okay with the idea of renting houses/appartments/rooms for cash flow but really wouldn't like collecting checks, answering angry phonecalls and such, so those duties would be handled solely by me.

* Seasonal jobs = minimum wages + people not having the network to pool up ressources between them and actually rent for 700 a month.

has anyone ever seen a company do a value add deal where they JV w the existing property owner? For example, you have a very underperforming apartment building and its gotten to the pt that it would require a decent amount of improvements to bring it to par and dealing w getting tenants out (which if u are in LA, a big headache bc of rent control). Like someone offers to pay for the improvements and improve the tenant base and in return they gain equity in the project.

I would normally agree with this but also remember that if the numbers are in line with your objective (which should be a rather strict/safe objective after reading this entire thread) then don't pass on the deal by low balling/haggling. There are always a pack of hungry RE investors standing inline behind you.

Let me tell you a couple of stories to illustrate my point. A good friend of mine runs a wholesale company and a couple of years ago an old lady called up asking $110k for her house. At the time it was worth $300k+. My friend countered her at 115k and offered to pay all closing costs. Lesson: Don't get greedy if the numbers are good!!! I know of a few people who would have tried to get the house for 100k or so just because they were used to haggling. (and most likely lost the deal) BTW this guy flipped the house for $215k to me and I had it flipped it for $230k the same day he closed on it from the lady.

When a deal comes across my desk for a 12% cap rate I offer full price and pay cash. No negotiations. If the bank then demands I pay all closing costs I grudgingly agree.

Remember a deal is a deal. Low balling isn't always necessary. Just make an offer in which the final price will fit your criteria.

I haven't seen it myself.


But a lot of the real estate tycoons like Helmsley / Hilton have done masterleases with option to purchase.

any canadians buy real estate in the states lately? are they lending to canadians down there or would i want to pay for the property in full?
thanks

Chapter 2. Note the Watergate story.

I agree. What I'm saying is don't be afraid to lowball if the offer price doesn't work for you but something reasonably lower does.

http://canadabubble.com/resources/re...ng-bubble.html

interesting paper on the canadian real estate market. 10/1 price to earnings ratio for vancouverites. lol!

Hi Spex, Can you explain more about moblie home note?
Seems thats a good way to start REI with not much Bankroll..
Sorry if i missed any part of this thread if u already answered it!

Great Thread Btw

Get Deals on Wheels, or alternatively read this thread.

will buy properties with postive cash flows...

pm me if any1 has these.

thanks
have cash

Yes, you missed that part of the thread and he's already answered it. Read the entire thread (yes, all 2K posts!), then ask questions on anything still not clear to you.

I lived in a duplex for 10 years before purchasing a single family home last year. I still own the duplex and rent out both sides. Between the duplex and my new house, I have ~$60k in equity. How might I harness that equity to purchase more rental property? Is it even possible? Keep in mind I would being doing this for cash flow.

I posted this is my thread hoping to find some input here.

Anyone have any info on what the current state of mortgage lending looks like? Are FHA loans for fist time home buyers being done with 5-10% down? What about non FHA loans, are banks lending again to first time home owners what about investment properties, can deals get done with 20% down or is more required?

By the way, keep us updated. I'm interested in Lonny Deals, too bad they won't work over here.

Thx again JV for the PM's, I'll give you a shout and let you know how it goes.


Will do Brons.

Hey Spex and others, have any of you tried your hand in Tax lien certificates, I've only begun my research but so far it seems like a great idea for a active real estate investor who is willing to do some foot work, thoughts?

One of my buddies is doing some of this and it's going well. As you noted, it requires some foot work. His strategy was to find homes in nice neighborhoods that are occupied and in good shape. It seems to be working for him.

NY unfortunately doesn't sell these to the public, a little more foot work then I expected

This stuff varies widely based on state/local law, but where I live (collar county around Chicago):

1 - There is an auction where you bid on the tax liens by interest. Over the last several years the tax liens having been going for anywhere from 0-4% interest per six months (I know this is screwy but that is how they do it). Four years ago they almost always went for like 0-.5%, so the interest has definitely come up. The maximum you can bid is 18% in illinois (i.e. 36% a year).

2 - The property owner has 24 to 30 months (depending on the type of property) to "redeem" the lien by paying the tax lien holder the amount of the back tax plus the interest bid at the auction. So in some cases, the winning bidder is giving the property owner an interest free loan for 2 years.

3 - There is this esoctaric procedure where the holder of the tax lien can pay the taxes on the property during the redemption period (you get interest on this as well).

4 - After the redemption period has run, the holder of the tax lien can peitition for a tax deed. Do do this, you need to file a bunch of paper work with the court (which has to be done very precisely).

5 - If you actually do end up with a tax deed (which from my understanding rarely happens); I've been told that you'd mostly like need to bring a quiet title action before you could get title insurance (i.e. before the property would be financable through traditional lenders).

I've gone to the auction a few times, but I was never able to find anything I thought was worth it in light of the interest rates being bid. However, I really didn't spend all that much time doing my homework so I was definitely without an edge. One thing I thought was that it might be better to go to auctions in less populated counties (maybe less competition, but who knows).