Real Estate Investing: Why do people in this sub call everyone successful "over-leveraged"? |
- Why do people in this sub call everyone successful "over-leveraged"?
- How are you spending your $1200 + mortgage forbearance + refi/heloc
- 22 Y/o need advice
- The Joint Center for Housing Studies projects owner expenditures for renovations and repairs will decline at least through the first quarter of 2021 due to COVID-19
- Landloard wants us to sign another year lease
- Rental Property vs Invest, How would you do it?
- First home and investment
- Question about positioning to buy 2nd investment property
- I want to add a personal loan + my savings + the equity on my current multifamily home to finance my first apartment building. Is this feasible?
- House hacking, owner occupied duplex, deal analysis
- Best California FTHO Program?
- First home purchase and investment
- Mortgages in Forbearance Hit 6.99%
- Converting primary to rental this year
- Deal Analysis - SFR
- Any tips on whether QOZ are worth it for California residents?
- Depreciation
- Is it easier to get a loan on a property you own 100% if it is in a company you formed versus when it is in your name?
- Generally in investment/commercial property
- New Landlord I need some book recommendation
- Loan Question
- Single Multifamily vs Portfolio
- House hacking by purchasing Duplex and tenant-proof remodeling
| Why do people in this sub call everyone successful "over-leveraged"? Posted: 03 May 2020 08:18 AM PDT I'm referring to most of the comments on threads like this. I've seen it many times on here. Whenever someone mentions an investor who scaled up or does large deals, comments will be swarmed with people calling them "over-leveraged". Ben Mallah threads get this a lot. Real estate is only industry I can think of that obesses over debt like this. I own an auto dealership, we probably use more debt than most small businesses but I've never had people asking about my debt use. I have friends who own manufacturing firms that use $10+ million of debt at any given time. I don't know anyone that asks them questions online like "how do you sleep at night with all that debt, bro?" Somehow real estate development is isolated from this questioning. I don't understand why. No offence, but I don't think people who say this stuff really understand how businesses operate. [link] [comments] | ||||||||||
| How are you spending your $1200 + mortgage forbearance + refi/heloc Posted: 03 May 2020 11:46 PM PDT *2:37am post -- *
Me: • The lifelong saver in me says, put that 1200 straight into mortgage principal. (IRL, I will apply a $1000 credit for my undocumented immigrants tenants; oh, the YOLO me says I should get a newer iPad and Pencil 2 that I don't need) • the penny pincher in me tells me not to take advantage of the forbearance because I have no problem affording my mortgage payments, especially when interests will probably be accrued (Wells Fargo won't give me a straight answer) • I read that HELOC at WF is on hold now--I was going to get one last year to get some cash for another property, but didn't go through with it with the market being so expensive, even with an extra 120-250, it wasn't exactly enough. My mortgage rate is pretty low 3.875%, but I might try to refi or shorten the terms or wait for HELOC applications to reopen [link] [comments] | ||||||||||
| Posted: 04 May 2020 12:15 AM PDT Me and my girlfriend are looking to buy a house, fix it up, and rent it out. We currently have about 50k cash saved and we're not really sure where to start, or if what we are doing is even worth it. [link] [comments] | ||||||||||
| Posted: 03 May 2020 07:22 AM PDT This should positively impact expenses for those interested in opportunities to do value add projects, renovating vacated older units, BRRR, etc. during the downturn. [link] [comments] | ||||||||||
| Landloard wants us to sign another year lease Posted: 03 May 2020 05:59 PM PDT So, our landlord asked us to resign our lease for the next year. In exchange, they dont increase the rent for another year. Im not sure if i should do it: 1. May want to buy if housing market drops 2. We are really good tenants and they would be stupid to lose us. (I do a lot of maintenance and have reliable income. Never complain, etc.) However, a nearby house recently sold as a rental and the new rent is 300 more than ours. I just dont know what to do. I feel like i cant afford a house and the market may drip soon anyway. I guess im just hoping to get some of your thoughts as people with experience in real-estate. Advice? [link] [comments] | ||||||||||
| Rental Property vs Invest, How would you do it? Posted: 03 May 2020 02:43 PM PDT We put an offer on another home. I wanted to sell the existing home to help finance the new home. I never had a desire to be a land lord. When we pitched what we are doing to some friends they all unanimously suggested that we keep and rent out the current home. In order to afford the new home and to avoid too much of a financial risk we would have to take out a small loan. Otherwise we would have very little cash on hand to handle an emergency. What surprised me about pondering the rent-it-out scenario is that there is very little advice on the internet that advocates for forgoing the rental path in favor of simply investing the money. With the total money that we could invest it would yield more money per month then a rental. I'll show the numbers at the end of the post and I might be wrong! Anyway, if we were to go the rental property route how would you do it? Start an LLC, use a rental property manager (We are moving less than a mile away and I'm good with tools therefore I can field all the repairs), there will be additional expenses like a gardener, insurance, and the risk of someone skipping rent (total pain but not really a financial burden since we can afford the small loan for the new house) By the way there is no mortgage on the current house. Also, we have 2 pre-teen kids so therefore a family of 4 just in case you have any suggestions about how this decision may affect them in the future. How about some rough numbers Current House Value: $550,000 New House Purchase Price: $800,000 Small Load Value: $175,000, 3.2 APR, fixed, 15 Year Typical Rent in this Neighborhood: $2,500 per Month Property Taxes for the New House: $6,700 per year Property Taxes for the Current House: $5,000 per year Location: California [link] [comments] | ||||||||||
| Posted: 03 May 2020 09:31 PM PDT Hello! I'd like some advice on a potential first time home and financing option a seller is offering to me. Single family home, purchase price is $40,000. Down payment of $7,500, monthly payments at $600, interest 8% on a 20 year amortization schedule with a ballon payment at the two year mark. Home is a nice small 1300 square foot property. Has a new roof, siding, gutters, windows and is gutted down to studs inside. I don't believe it has a water heater heater or AC unit either. I believe it to be in a great area with big potential for property appreciation. Reasons, nearby (adjacent street) renovated homes at 250k+, located in a Midwest city with a growing population, near; university, hospitals, park, and other great public venues and a five minute bike ride if not less to downtown city. I am a first time home buyer and would be screwing myself out of a local down payment assistance program if I chose this home as my first property. This home would very likely not be able to qualify for a traditional mortgage as it sits. Perhaps a construction loan. That's potentially 3.5% down payment assistance on a maximum acquisition limit of 380k. I'd be leaving a lot of "free" money on the the table as it's a grant program. However, going with this particular property I wouldn't be taking on a 200k+ debt mortgage likes traditional home. I'd like to achievable FI soon and it may help to not be straddled with a larger mortgage payment. I'm single and have no kids or pets. I have a near 800 credit score averaged between the three major bureaus. I need to move within the next three weeks. I may have issues qualifying with some loan programs due to taking on a second job seven moths ago and having a higher income than limits allow for. On both tax returns however AGI is about 65k. I initially wanted a duplex to house hack, I'd have to settle with renting the only other bedroom in those o house hack this particular property. I don't mind immediately moving into an unfinished home and working on it myself and with contractors for some things. I'm interested in working on and learning to fix up properties. I'd like to build a rental portfolio in this city. My question is this! Knowing what you now know of my aspirations, WWYD? If you would go with the above mentioned property, how would you finance it? Thank you all in advance! TL:DR. First time home buyer here, I found a great (location, location, location) small $40k SFH with seller financing. Home doesn't qualify for a traditional mortgage and I'd be leaving first time home buyer grants on the table. WWYD? [link] [comments] | ||||||||||
| Question about positioning to buy 2nd investment property Posted: 04 May 2020 12:22 AM PDT I want to be in a position to be ready invest in a second income property and eventually develop it into a new build/forever home after renting it out for 5-10 years. Thing is, land with a crappy (but rentable) house in dream neighborhood is about $1.2-1.3 million. Not sure what kind of loans we can take advantage of, but maybe you all know something I don't? Or maybe this is just impossible at the moment.
Bank recommended doing a cash out for the down payment of house (probably going to be $260k), then taking out a traditional mortgage for the remainder. I know that banks are tamping down on jumbo loans (which we would need to cover the remainder), so not sure how that's going to work. Hope to rent the income property for about $4,000-4,500 a month, so we might need to cover a bit of the monthly mortgage and prop insurance. As i'm typing this out, it seems even less realistic. Seems like there's no way to do this without selling hacked house. Thoughts? Stupid idea? Good to be thinking about this now? [link] [comments] | ||||||||||
| Posted: 03 May 2020 11:23 PM PDT This is all hypothetical. I've been running numbers and scenarios all day to try to prepare myself to buy an apartment building in a couple of years. My understanding is lenders don't like borrowers using borrowed money as a downpayment on a commercial property because they want "skin in the game". My question is if I pooled money from my own savings, the equity in a duplex that will appreciate for a couple years, and a personal loan, will that be sufficient for commercial lenders? Thanks! [link] [comments] | ||||||||||
| House hacking, owner occupied duplex, deal analysis Posted: 03 May 2020 06:11 PM PDT Hi folks, Some information on me: gainfully employed, AGI $120k in 2019. I own a SFH in my hometown about 60 min away, that I'd like to sell. I purchased it with an FHA loan in 2015 for $310k with a rate of 3.2%, it's unofficially (Redfin, Zillow) valued around $390k. I currently owe $282k. While it's in a really wonderful area and highly coveted neighborhood, I am not making $ on this property. I pay the HOA fees every 3 months ($150) and the gardener ($95) and internet ($65) every month. One tenant pays $700, the other $695. No one's rent has changed since living there (over a year). I haven't worked with any property management company. I've always managed it myself. Thankfully my tenants have always been stellar and given me zero issues. I'm renting that house out by the room. One guy just moved out so beginning May 1 I covered the cost ($600) of one vacant room. I haven't found anyone to fill it yet but a young lady just emailed inquiring about the room. The lease for the other two tenants is expiring on Oct 1, 2020. As for myself, I am renting my parent's rental property (house) and renting out each room so I'm essentially already house hacking, and I live here for free and manage the grounds, etc. However I'd like to move closer to where I work and the midtown area of my city (Sacramento, CA), versus where I am now, a suburb city about 20 minutes east (30 with traffic). I don't have any cash saved up (only recently have I begun to slowly save so I have about $6k saved — I am considering this my emergency fund and few months expenses fund). No other debt besides my car ($26k). Here is an example of a completely renovated duplex I'd be interested in. I am not handy and while I am a competent individual, idk how to do any carpentry, handy man repairs, electrical work, or anything. So it being new and completely renovated is appealing to me. I think I have the landlord thing down, I'm comfortable doing it, have learned how to find renters and screen renters, etc. Here is another duplex a few blocks away but cheaper. Two questions:
The duplex I linked has two individual 2/2 units. I imagine I could rent out the larger one for $2800-2900. How do I figure out what my cash flow would be? If this is a good purchase/idea? If going the duplex route is right for me? Sorry this was a long read. I appreciate your kindness and patience in advance! [link] [comments] | ||||||||||
| Posted: 03 May 2020 09:36 PM PDT I'm looking to get my money in the market as soon as possible and with a low down payment. Ideally I would like to live in the home for a year and convert it to a rental property as soon as my initial mortgage allows me to convert the property into a rental. Does anyone have any experience with this and can recommend the ideal program to look at? [link] [comments] | ||||||||||
| First home purchase and investment Posted: 03 May 2020 09:29 PM PDT Hello! I'd like some advice on a potential first time home and financing option a seller is offering to me. Single family home, purchase price is $40,000. Down payment of $7,500, monthly payments at $600, interest 8% on a 20 year amortization schedule with a ballon payment at the two year mark. Home is a nice small 1300 square foot property. Has a new roof, siding, gutters, windows and is gutted down to studs inside. I don't believe it has a water heater heater or AC unit either. I believe it to be in a great area with big potential for property appreciation. Reasons, nearby (adjacent street) renovated homes at 250k+, located in a Midwest city with a growing population, near; university, hospitals, park, and other great public venues and a five minute bike ride if not less to downtown city. I am a first time home buyer and would be screwing myself out of a local down payment assistance program if I chose this home as my first property. This home would very likely not be able to qualify for a traditional mortgage as it sits. Perhaps a construction loan. That's potentially 3.5% down payment assistance on a maximum acquisition limit of 380k. I'd be leaving a lot of "free" money on the the table as it's a grant program. However, going with this particular property I wouldn't be taking on a 200k+ debt mortgage likes traditional home. I'd like to achievable FI soon and it may help to not be straddled with a larger mortgage payment. I'm single and have no kids or pets. I have a near 800 credit score averaged between the three major bureaus. I need to move within the next three weeks. I may have issues qualifying with some loan programs due to taking on a second job seven moths ago and having a higher income than limits allow for. On both tax returns however AGI is about 65k. I initially wanted a duplex to house hack, I'd have to settle with renting the only other bedroom in those o house hack this particular property. I don't mind immediately moving into an unfinished home and working on it myself and with contractors for some things. I'm interested in working on and learning to fix up properties. I'd like to build a rental portfolio in this city. My question is this! Knowing what you now know of my aspirations, WWYD? If you would go with the above mentioned property, how would you finance it? Thank you all in advance! TL:DR. First time home buyer here, I found a great (location, location, location) small $40k SFH with seller financing. Home doesn't qualify for a traditional mortgage and I'd be leaving first time home buyer grants on the table. WWYD? [link] [comments] | ||||||||||
| Mortgages in Forbearance Hit 6.99% Posted: 03 May 2020 11:40 AM PDT | ||||||||||
| Converting primary to rental this year Posted: 03 May 2020 03:12 AM PDT My first rental will be my current primary. After this conversion, is selling after 3 years basically a must for tax purposes? Seems like it couldn't get better than maintaining that 250k casual gain exclusion? Edit: typo Follow up question, looks like I need to live there 3 of 5 years to maintain 250k capital gain exclusion tax benefit. So the key time to sell is 5 (not 3) years after conversion? By then, i may have cash flow work maintaining. Thoughts? [link] [comments] | ||||||||||
| Posted: 03 May 2020 01:12 PM PDT On the fence about this one, curious what ya'll think 3bd, 2.5bath SFR Cost Summary:
Financing Assumptions:
PITI (Monthly):
Est Rent : $1,100 Monthly Expense Assumptions:
[link] [comments] | ||||||||||
| Any tips on whether QOZ are worth it for California residents? Posted: 03 May 2020 04:21 PM PDT I made 800k in short term capital gains and was wondering whether the QOZ are legitimate and if so, which ones? And what is the outlook on real estate over 10 years due to the depression? Would it be wiser to hold cash [link] [comments] | ||||||||||
| Posted: 03 May 2020 10:06 AM PDT I understand the basic rules for depreciation. 1) you should always take it 2) it is recaptured at sale whether you take the depreciation or not. My question stems around how does the IRS calculate your maximum allowable depreciation. I own condos and there is no where that separates the land vs building differential. Is how I decide to calculate my depreciation in parallel with how the IRS calculates my depreciation (like do they use my numbers)? Is there situations where you would calculate less depreciation (given you remain cash flow neutral/negative) to offset excess recapturing at the time of sale? [link] [comments] | ||||||||||
| Posted: 03 May 2020 03:43 PM PDT | ||||||||||
| Generally in investment/commercial property Posted: 03 May 2020 06:53 AM PDT Are you all seeing lower rates or higher with the stricter quals a lot of banks are going to? I ask because I'm thinking that I should still move forward with deals as a lot more people are now unable to purchase due to stricter guidelines for lenders. I have plenty of capital on hand and can meet 20% cap and a great score to get a loan. [link] [comments] | ||||||||||
| New Landlord I need some book recommendation Posted: 03 May 2020 08:04 AM PDT Hey guys new landlord, i would like some recommendations on books you found helpful. There are two main things I want to learn about:
Given where the market is I am open to all real estate investment books and generally any useful information you can provide me Thanks! [link] [comments] | ||||||||||
| Posted: 03 May 2020 04:55 AM PDT Hi all, I work in commercial real estate and am looking to add some multi family investments. I recently closed on a refi of my primary residence and am looking to put a HELOC on the property. Does anyone know if there is period of time after I close my loan that I have to wait to do this? Also, how is everyone feeling on the multi family side?? Thank you!! [link] [comments] | ||||||||||
| Single Multifamily vs Portfolio Posted: 03 May 2020 01:22 PM PDT What are the differences between buying a $1 million dollar multifamily building vs a $1 million dollar portfolio made up of small multis, duplexes, SFHs etc? Do the loans have any difference? I assume the upkeep and management costs might be more with the multiple of buildings? [link] [comments] | ||||||||||
| House hacking by purchasing Duplex and tenant-proof remodeling Posted: 03 May 2020 12:52 PM PDT Hello, Thanks for taking a look at this post. Summary: I'm trying to purchase a duplex within the next 4-6 months. I'm planning to use FHA and I think lender will be more lenient on the terms since I have around 100k annual income with a credit score that is +750. It has been difficult for me to find some deals in my are and I was hoping if someone could give some advice to a first time real-estate investor/home buyer on what I should be looking for. Reading resources would also be greatly appreciated. Details: Location: Orlando Florida, or a location close to the airport Budget: 250k - 300k max Purchase Method: FHA + ~20k available to use as down payment Type of house: Duplex/triplex Manual Labor: Open to remodeling myself/contract labor to help Questions: What resources are the best to use when scouting a house? There have not been many duplexes that have both units up for sale, is this common or am I looking at the wrong place? What other metrics should I consider when purchasing a duplex? What are some books to read that teach you how to tenant proof a unit? [link] [comments] |
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