Real Estate Investing: Tenant wants deck and is willing to contribute... how much should I ask? |
- Tenant wants deck and is willing to contribute... how much should I ask?
- Rural vs Larger City
- Some important questions and answers when searching for the right hard money lender
- Cares act 401k withdrawal for first BRRRR
- Buying At Auction (Sheriff's Deed)
- Where to find dataset of price-to-rent ratio by city?
- Types of resources to find homes for sale.
- Sold first home.. looking for recommendations
- I think the current crisis of covid-19 pandemic offers some good opportunities for rental property investors.
- Is this career right for me?
- Is it still a good time to invest in rental properties?
- Looking for resources and advice on building a subdivision.
- Multi family home or living alone?
- Is it worth refinancing (30 year loan) to afford the property long term and build equity?
- Renting out FHA home while living in it within that first year
- What is THE best book on real estate taxes?
- Basic Income Reinvestment Model - Any spreadsheet experts out there?
- Historical Cap Rates
- What to do with land I own
- Purchasing Town home with limited parking?
- I've inherited my grandparents home.
- Buying from a wholesaler
- Sources for market research?
- Purchasing real estate in my personal name... Can I expense it to my business?
| Tenant wants deck and is willing to contribute... how much should I ask? Posted: 24 Jun 2020 03:54 PM PDT Like the title says, I have a duplex that I recently completely renovated and rented out last year. The downstairs tenants are planning on being there long term and would love a deck off the back of the house to give them some usable outdoor space. I agree it would be nice, but it was just quoted at $5000 and just isn't in the budget this year after redoing the rest of the building. They have offered to pitch in and contribute to the cost but I'm not sure how much to ask of them? They're great tenants and I'd like them to stay, so I've even considered the idea of a slightly lower rent or a freeze on rent increases for a while if we did go through with splitting the deck cost. Thoughts? [link] [comments] |
| Posted: 24 Jun 2020 04:52 PM PDT I currently live in a rural location and make good money here and was looking to buy real estate rentals. I'm stuck on whether or not I should buy local or go more long distance (2.5 hours) to a larger city. Here locally you can buy SFHs for ~$35-$40,000 and rent them for $600. But you will get almost no appreciation over time. In the city that is close by (Midwest) the market is buying a SFH for $80-$90,000 and rent is about $1000. I may get appreciation with the homes in the larger city but I do like the control of being able to drive 5 minutes to check on them here rurally. Maybe the answer is to buy in both areas? Cheers [link] [comments] |
| Some important questions and answers when searching for the right hard money lender Posted: 24 Jun 2020 06:26 AM PDT hey, y'all...thought i'd share this which was sent to me a few years ago. After finding an HML that will lend where your prospect house is (most will only lend in major metro areas or have steeper rates if they do lend outside metro areas), I would ask these questions: Are you a direct lender? This will be a gateway question. If the answer is no, that means they are a broker of some type. Typically this means they will take longer to close, may not have all the information of the companies they work with, and most hard money brokers get their money by taking an existing product and adding extra points to pay their fee. Only continue on if the answer is yes. The person you are speaking to should have an email address with the name of the company and work directly for that company. Otherwise you could be getting yourself in to a bad situation. What is your investor success rate? This is important to know but can be lied about very easily. Many don't track this statistic. I don't know if it is because they don't really care or just haven't thought of it. I think it is probably the most important stat. Look for groups who offer referrals to local contractors, Relators, etc. Also, look for groups that have boots on the ground in each market that know the specifics of investing in that area. How many loans have you closed in this month? Any good HML will know this number off the top of their head. You want a lender that is busy and closing loan in your area. Who cares if they closed 100 loans in other states, find out what they are doing in the same area you plan to be. If they are closing a lot of loans, they probably have something good to offer. A good number will vary based on the current market and the size of your metro area. What is your maximum LTV and Initial Funding? This is normally expressed as a percentage and that percentage is of the ARV. Most companies are between 65% and 75%. The higher the percentage, the better for you. That means they will lend more. Initial funding levels are a back way of putting the down payment required. If a company says they have 85% initial funding, what they really mean is they are going to require you to pay 15% of the purchase price as a down payment on top of the closing costs and LTV requirements. Right now most HMLs are between 85% up to 100% initial funding. Initial funding of 100% means there would be no down payment. Do you require an appraisal and survey? Most HMLs will require these. I am wary of the ones that don't require an appraisal. The lender will perform a desktop appraisal but they will typically have a short view on the value of the property to protect the company's investment which means you will be coming out of pocket more. Small-time HMLs may not require an appraisal but this could be because they will drive out and view the property themselves. Survey is a toss-up on whether or not it will be required. Is there a pre-payment penalty? Some will require you to pay the interest through the term or another length no matter how long you hold the loan. Just make sure that you include this requirement in your costs. Do you have relationships with refinance lenders? Make sure that they have a good relationship with companies that will refinance the loan for you if you are using a BRRRR method. You want to see something that has low or no seasoning for a cash out refi or that may require low amount of documents. What is your draw fee & benchmarks for the repairs portion of the borrowed money? Know what your fees will be to take out the repair money borrowed. Draws are almost always held back until you reach certain points in the project or that work is completed. They will also charge you to have an inspection by a 3rd party to make sure the work is done. I have seen this range from as low as $100 up to $300. Do I need to pay anything before sitting at the closing table? There have been numerous people on BP talking about how they paid application fees but they could never get their loans closed on any deal brought to the company. This is a practice by some less than reputable companies. One I saw charged $500 upfront to be pre-approved and would never actually fund any loans. Just beware. Most reputable HMLs will not charge anything until you are sitting at the closing table and all fees will be listed on the HUD-1 closing document. And of course, what are the points, interest, and attorney/document/admin fees for the loan? This will vary based on region but in general 2 – 5 points, 11% - 14% APR (meaning this is the annual rate so divide it by 12 to get the monthly interest amount), and documents fees can be from $600 – $1,900. The document fees are what will vary wildly from company to company. Just know them going in so that you can properly budget. You will also want to find out if payments are interest only or if some principal is built in. Most hard money will be interest only payments on the full approved balance of the loan whether or not if you have pull the draw funds for repairs. If you have any other questions, post them below so that we can all learn from the answers. [link] [comments] |
| Cares act 401k withdrawal for first BRRRR Posted: 24 Jun 2020 03:36 PM PDT Hello internet strangers, let me preface this with I would get professional tax advice prior to doing something like this, but I wanted to get some opinions before potentially inquiring. Under the cares act you are able to withdraw from your 401k without taking the 10% penalty up to 100k. You are also able to distribute the taxes owed off of this over the next 3 years. Ok fine, but you are still taking a beating on taxes over the 3 years. This is the part that really interests me though (taken from the above IRS info): Q7. May I repay a coronavirus-related distribution? A7. In general, yes, you may repay all or part of the amount of a coronavirus-related distribution to an eligible retirement plan, provided that you complete the repayment within three years after the date that the distribution was received. If you repay a coronavirus-related distribution, the distribution will be treated as though it were repaid in a direct trustee-to-trustee transfer so that you do not owe federal income tax on the distribution. If, for example, you receive a coronavirus-related distribution in 2020, you choose to include the distribution amount in income over a 3-year period (2020, 2021, and 2022), and you choose to repay the full amount to an eligible retirement plan in 2022, you may file amended federal income tax returns for 2020 and 2021 to claim a refund of the tax attributable to the amount of the distribution that you included in income for those years, and you will not be required to include any amount in income in 2022. See sections 4.D, 4.E, and 4.F of Notice 2005-92 for additional examples. What I get from this is that if you pay back the full amount prior to the end of 3 years you can amend your previous years and receive the full amount that you have paid in taxes on the withdraw back on your 2022 taxes. I currently have 2 units and would love to expand and try my hand at the BRRRR method. My real basic goals would be to be 75k into one with an ARV of 100k, refi out at 75% LTV and get my 75k back. Pay the full amount back to the 401k like a thief in the night, have a rental that's cash flowing, have 25% equity, and get any taxes I paid on the withdraw back. I realize all of the above paragraph is optimistic, especially for someone that has never done a BRRRR but even if I fall short I can't see myself not being able to pay the remainder back in 3 years. Current target is to save 15-20k per year so by the end of year 3 I should have 45-60k stashed for investing. It sounds like you have to pay 10% in taxes up front so I would get 90k. To pay it back would I have to pay the 90k back or would I be required to pay the full 100k including the 10k they already took in taxes? I know that I already qualify for this withdraw, I just wanted to get you fine peoples opinion. Thank you. [link] [comments] |
| Buying At Auction (Sheriff's Deed) Posted: 24 Jun 2020 02:10 PM PDT Hey all, So I see a home on Hubzu going for $290,000.. ARV is about $800,000. I bought the Sheriff's Deed of Foreclosure online. Does the Sheriff's Deed tell me if there is any back taxes or liens on the property? It basically says the bank bought it for $1,000. Then there is an affidavit of consideration (Statement of Prior Mortgage, Liens, or Encumbrances) for the Sheriff's Deed, and on this form there is a box checked off that says "No Prior Mortgages or Liens are outstanding" To me, that sounds like it is clear of any liens.. Do any of you have experience in these? I can share the deed also. Thanks [link] [comments] |
| Where to find dataset of price-to-rent ratio by city? Posted: 24 Jun 2020 11:42 PM PDT I have been looking for a comprehensive list of price-to-rent ratios for the largest 500 cities in the United States, and I have only found "top 20" clickbait articles. Does anyone know a good data source? [link] [comments] |
| Types of resources to find homes for sale. Posted: 24 Jun 2020 11:26 PM PDT So I live in decent neighborhood the only bad thing is my drug dealing crack head neighbors across the street. Apparently their home was up for sale not by the crack heads cause they were not pay the mortgage or any upkeep, but probably from the bank I'm not sure. I knew nothing about it, my neighbor told me he got into a biding war but lost I was pissed because I wanted the property . What type of sources would post homes for sale but it's not announced to the public via Zillow or Realtor.com? [link] [comments] |
| Sold first home.. looking for recommendations Posted: 24 Jun 2020 11:19 PM PDT We just sold our first home and we are looking to buy another one in 6-18 months. We were fortunate to have a good amount of equity, so the thought is to pay off school loans (done), car, then reinvest into another home. School loans were rolled into a HELOC for a lower interest rate. It's now paid off. This would put us in the position of having no debt. The family is growing too so there is a need to get a bigger home. We are looking for recommendations on recommended debt to income ratio and how much our monthly mortgage / rent should be. What's the typical debt to income ratio if you don't have any debt? We'd only have front end debt when we purchase a new home. Of course there is food, gas/electric, and other things, but what should we aim for? Is spending 50% of our paychecks in mortgage/rent too much? Seems a little tight but doable. [link] [comments] |
| Posted: 24 Jun 2020 08:40 PM PDT |
| Posted: 24 Jun 2020 08:33 PM PDT This has peaked my interest over the last year, I'll be a senior in high school this year and just really wanted to know if this career is really as lucrative as some people make it seem. My parents are making me get a bachelors degree, so any suggestion on what I should major in would be nice, and what I should do out of college or right now to prepare? I plan on moving to Austin, TX when I graduate college, the market is great there and I have family. Any Advice Helps! Thank you [link] [comments] |
| Is it still a good time to invest in rental properties? Posted: 24 Jun 2020 08:27 PM PDT With the whole pandemic and rental policies being implemented across the USA, do you think it's still a good time to purchase some properties for rental? Or is it too much of a hassle with the new rules etc? [link] [comments] |
| Looking for resources and advice on building a subdivision. Posted: 24 Jun 2020 04:37 PM PDT Hello all! I am looking into buying land and putting an affordable housing subdivision in place. Please understand this goal is a few years off - but, I have worked in both residential land development and residential new homes sales. I am in the research phase of this endeavor. This goal is absolutely without a doubt a bleeding heart effort to help those in poverty achieve homeownership and allow them to begin building wealth. This is my attempt to give back in some way to my community. The homes will be 3 and 4 beds ranging from 1100-1800 sqft. Still debating on construction method. I am located in the midwest, and I want to go with an extremely sustainable material. I want ICF construction, and I understand how hard it would be to get ICF prices low enough for this project to make sense. Just looking to pick your brains. What factors should I consider? What pitfalls should I avoid? [link] [comments] |
| Multi family home or living alone? Posted: 24 Jun 2020 07:55 PM PDT I just graduated from college and got a job offer (Northern Dallas area and about $100k/year). My plan is to start saving up for a down payment on a place. I was considering 2 options: 1)Buy a duplex and rent out the other unit or 2)buy a single family home I could see how receiving rent monthly would be nice but I'm wondering if being a landlord is worth the hassle. I've also heard that most of the value comes from equity and not rent money. But I'm new to this and I'd appreciate some insight [link] [comments] |
| Is it worth refinancing (30 year loan) to afford the property long term and build equity? Posted: 24 Jun 2020 07:05 PM PDT My wife and I bought our condo early 2018 not too far off where HQ2 was announced later that year. The deal we had then:
Back then the units where going around $280K+, and right now they are going for around $340K within 1-2 days of listing. We are still living in this 2BR condo with our child, but are considering moving to Europe in about 2 years where I'm from. So also saving up for our next down payment at the moment. My hope is to hold this property as the proximity to HQ2 is tempting. Unfortunately we'd only break even at this point with rent ($2K) and then of course the property management cost. So I have been looking into refi options to get a better rate, lower the monthly payment and get rid of the PMI. Ideally I'd like to get the monthly payment down to around $1,800 or a bit more. But I'd only really go through this hassle if holding on to this unit to build equity is worth it compared to just selling when we leave the country. We won't be making anywhere near what we make here in Europe so having an asset like this would be nice to have. Since I don't know much about real estate and rental properties I thought I'd ask here first. Thank you. [link] [comments] |
| Renting out FHA home while living in it within that first year Posted: 24 Jun 2020 06:46 PM PDT Hiya, I understand you have to have the intent to live in your FHA backed property for at least a year. I have no problem living in one of the units for a year of the building I intend to purchase as its near my school, but am I allowed to rent out the other units within that first year of living there too? Hope y'all stay safe and healthy [link] [comments] |
| What is THE best book on real estate taxes? Posted: 24 Jun 2020 08:45 AM PDT I'm looking for a resource that is up-to-date, and comprehensive. Any recommendations? Bonus points for books that offer more 'actionable' information, as opposed to just reporting the facts. [link] [comments] |
| Basic Income Reinvestment Model - Any spreadsheet experts out there? Posted: 24 Jun 2020 12:04 PM PDT Hi, happy to just find an existing calculator/model that does this versus recreating the wheel, but I'm trying to create a cashflow/income reinvestment model in a spreadsheet that demonstrates the effect of reinvesting income back into additional properties. I'm struggling with the Loan Balance column, which needs to take into account multiple loans and their amortization amounts in a given year. I think I got this for one loan, but I'm not sure how to gracefully handle this for multiple loans. Thoughts/ideas? Thanks! https://docs.google.com/spreadsheets/d/1LxX9hm1Xc0J7HecoF15XqfyaXMuRVzpQJVg_r4iGIiQ/edit?usp=sharing [link] [comments] |
| Posted: 24 Jun 2020 05:50 PM PDT Hello, I am a relative noob at CRE and am trying to educate myself. Historically, do cap rates at which properties sell all stay the same ? For example, most LA multi family are typically offered below a 5 cap right now and seem to sell around there or less. Since we are in a up market right now, will the cap rates for the same type property go up when the market declines? Curious since In MF and other CRE rents fluctuate with the market cycle. Thanks! [link] [comments] |
| Posted: 24 Jun 2020 02:03 PM PDT I bought a ~1 acre lot near Reading, PA for way too much money about 2008 or so, right when the housing market crashed, was young and dumb. Anyway paid about 75k for it. Have tried to sell it off and on for a long while and cant get it sold. Had it listed with real estate agents for 55k, tried selling it privately as low as 50k. Seems like financing is hard for land and nobody can afford any kind of down payment for it. I really want to get rid of it but dont want to lose too much money on it. What could i do to get it to sell for a decent amount? I have thought about putting a modular on it but after all the expenses I am not sure it will be worth it. I got quotes of around 105k for a 1600 sq ft home plus I am told around 30k for a basement and up to 15k for a septic system. not exactly sure of what the end value would be but I dont think it would be worth the about 225k I would have into it. I know I could save some but not putting in a basement and just putting it on a slab or something but I would think that would decrease the value by roughly the amount saved. Any other ideas on what I could do to get rid of this lot and get cash in my pocket? [link] [comments] |
| Purchasing Town home with limited parking? Posted: 24 Jun 2020 01:50 PM PDT Please before anyone tells me to just look at SFR, I live in Orange County, CA. I'm sorry I don't have all cash lol. Scenario: I am considering a tri-level townhome that has a direct access 2 garage. The community itself has literally 15 GUEST spots that are not to be used by residence. The option for those who have more than 2 cars is to park on a street outside the community that faces that is semi-residential (apartments/SF homes on the other blocks from the Main Street. From what I've seen and understand, finding parking isn't ever an issue, it's just a matter of how far you'll be. Question: to those who have similar properties, where parking is a limitation, how has this affected your ability to find tenants/sell the home/ property value? Because I will want to rent out the rooms, at least 1 or 2 people will have to park outside on the street. This is my biggest red flag with moving forward with the offer. Any insight would be greatly appreciated. Thanks! [link] [comments] |
| I've inherited my grandparents home. Posted: 24 Jun 2020 07:33 AM PDT Good evening, I tried to post to this group but I had to build up my Karma. While waiting I've been reading the posts and it seems I've come to the right place. You all appear to me to be far more knowledgeable than myself, as I can't even consider myself a novice in this field. Some background. My grandparents raised me, and now they both have passed. My grandmother in 2011 and my grandfather recently in November of last year. He left everything to me in his Will, which includes my childhood home which is paid for free and clear, no liens. The money he left to me I have been using for upkeep of the home, paying monthly bills, yard maintenance, etc. I've liquidated his car and other things. I've given items to family and close family friends and kept some for myself. I don't live in my hometown as my wife and I moved about 120 miles away for better jobs and we've bout a house in the suburbs, so moving home to live in the house is not an option. I am clearing out the house to rent it after making minor upgrades. Not much is needed as there was a fire in the house about 5 years ago and it was stripped to the studs and rebuilt. Wiring, flooring new appliances all replaced and up to date. My question is how can I leverage this home to buy more property to create income and a legacy to leave my 3 kids. I've read the recommended books and speakers in this communities guidelines. What other advice can you give? Thanks in advance. [link] [comments] |
| Posted: 24 Jun 2020 01:18 PM PDT Hey Everyone, I have assembled a team out of state and I am ready to purchase a property from a wholesaler. What happens after I tell them I want the property? Do they send over papers for me to sign? Do I set the closing? After we sign can I have them coordinate with my contractor or inspector for a walkthrough? If anyone could walk me through that process I would greatly appreciate it. Thank you! [link] [comments] |
| Posted: 24 Jun 2020 01:15 PM PDT I am looking to purchase an investment prop in the $150-200k range in about a year, so I have some time. I have been told that purchasing my first one in an area near my home would be ideal since I am new to the game and can keep a closer eye on it. I hear that argument but being from NJ I feel like homes around here are overpriced and there isn't the potential property value appreciation here like there is in other parts of the country. So my question is - What are some sources that you guys use to find and monitor certain areas of the country? Is it just searching through zillow, comparing rents/taxes/expenses in certain areas and looking at prior HPA growth in the areas? I am comfortable purchasing out of my state and using a property manager to start. [link] [comments] |
| Purchasing real estate in my personal name... Can I expense it to my business? Posted: 24 Jun 2020 08:28 AM PDT I'm entering into my first investment purchase in the very near future (fingers crossed that I actually get to close within the next week). I ended up needing to finance the home in my personal name. This project will otherwise be operated through my LLCs. (Hopefully, this is the only investment purchase I'll need to make in my personal name.) With other items I've paid for on behalf of my business, I'll expense it to the business and get reimbursed -- like part of my cellphone, mileage, or a business lunch when I didn't have my company card. Can I do the same with the mortgage and other related expenses? I have seen some folks who buy in their personal name and their LLC invoices them for the costs of the renovation. Edit: I do plan on talking with my accountant and attorneys. Just wanted some input first from other investors. [link] [comments] |
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Helpful post for real estate investors. After making upgrades like a deck, presenting the property well is key. Professional real estate photo editing from services like phephotos can really help highlight these improvements. https://phephotos.com/
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