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    Real Estate Investing: Real Estate Market has been Insane lately

    Real Estate Investing: Real Estate Market has been Insane lately


    Real Estate Market has been Insane lately

    Posted: 10 Jul 2020 09:44 AM PDT

    I posted recently that I might cash out refinance on a 4plex I own but I ultimately decided to sell.

    I bought the property for $215k in 2017 and my realtor said it was probably worth $300k. Within 8 hrs of listing it for sale we got offers for $340k.

    What is happening? Lol

    Edit: Thanks for all your responses

    submitted by /u/rb1754
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    First Property with $250k Pre-Approval and $24k in cash.

    Posted: 10 Jul 2020 06:37 PM PDT

    Background: 1. Living in Oklahoma City 2. Looking for Multifamily House Hack

    The scoop: Approved for an FHA 3.25% APR and 3.5% down mortgage. I originally got the loan to finance a duplex that came on market but was put in contract within 24 hours.

    Duplex details: 1.)Asking Price: $250,000 2.)Comps in same neighborhood within last 3 months are $200,000 for similar duplex. 3.)Rent in area is $1,200 per side or $2,400 monthly if I were to move out in the next couple years. 4.)I submitted a back up offer of $230,000 and seller covers 3% of offer price in closing costs.

    Remarks: I read another post today that is talking about property bidding up and inflating because financing is so cheap. Yup, that's exactly right, I see that first hand and it's inflating values. I'm not one to jump in and pay what's being asked because that's the status quo due to a sellers market fed by low interest rates. I'm going by the cash flow and if I can't cash flow when I move out and have both sides rented then it's not a deal.

    Question: So, my question to all those savvy seasoned investors is this. What is the best option with the hand I'm dealt in the current market? I'm going to start driving through neighborhoods I want a duplex in and write down addresses I'd want to live/invest in. Go home, research the neighborhoods comps and see if it's within my reach and start finding the owners addresses. At this point I feel it's a better option to hustle harder and start making my own deals and not wait for them to hit market. Maybe I'll get lucky. I'd like some thoughts on this approach. I'm hard pressed to house hack because my wife and I need to move out of our little one bedroom apartment and I can't think of a better way of starting then to get as close to break even on rent if not make some cash monthly.

    All criticism, remarks and advice is welcome!

    submitted by /u/Kyle_Otto
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    Seasoned Investors...?

    Posted: 10 Jul 2020 07:27 PM PDT

    Seasoned investors... how did you get your first rental property? & with that experience, what advice would you give to someone who wants to build a rental portfolio?

    submitted by /u/npittmann
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    Cash out Refinance back into FHA

    Posted: 10 Jul 2020 08:28 PM PDT

    Is it possible to do a cash out refinance into a FHA loan when you already have one for that property? Can I get most of my equity out this way. Bought a house two years ago and in between signing the purchase agreement and closing the pipes burst. (Minnesota cold froze water lines) radiator blew dry wall, and hard wood floors ruined. However since the purchase agreement was signed the seller had to use his insurance to cover all damages upgrading the old house and allowing me to walk in with significant equity. That combined with my own work I have about 30-50k in equity. The wide range is because our neighbors just sold for 60k over asking price, they are twin houses so I'm not sure what we would get appraised at.

    My questions are can this type of cash out refi be done? Would you recommend it? What are the Best ways to maximize what I can take out? Any advice is greatly appreciated

    submitted by /u/iCant_Stanz_Ya
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    How to challenge a small multifamily appraisal?

    Posted: 10 Jul 2020 08:26 PM PDT

    I'm selling a 4-unit apartment building (all symmetrical 2b/1ba). It's under contract for $385,000. Everything was going great until the appraisal report came in at $308,000!

    I went through the report and founds lots of problems.

    1. Comps - None of the comps were relevant. This is a 110yo 4-plex in a nice area. Only two comps were within a mile, with the rest being 7-12 miles away (different cities, not as nice). The two nearby comps were a converted residence in very poor condition, and a fourplex (all 1/1 units), where the seller wouldn't permit buyers inside. I know bc I considered buying both of those. They also sold 15 and 18 months ago, respectively. The farther away comps range from inner-city duplexes, to a 20-unit building in the lower-end suburbs.

    2. Income approach - Appraiser used the sales comp approach for the final value, even though the comps were poor. I provided copies of leases to prove I was getting $950/unit. HUD's 2020 fair market rent for the area is $973 for a 2b/1ba. Appraiser used $680/mo, coupled with a low GRM for the area.

    3. Subject-to items - Appraiser also noted some chipping paint on the building and shifting of a cinder block wall on a DETACHED garage. The garage is small and basically an extra storage space. It's value is absolutely not worth the cost to repair that wall and has no bearing on the building's value.

    How would you go about challenging this appraisal as the seller (and listing agent). There are truly no good comps for this building. Income approach should be relied upon, as it's an income investment property. I want the bank to reconsider, but I fear another appraiser will lazily generate the same kind of report. Advice?

    Thanks!

    submitted by /u/LoopholeTravel
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    Commission from representing yourself on a deal?

    Posted: 10 Jul 2020 08:11 PM PDT

    Now i'm nowhere near buying a property because i'm a young cat in the game trying to understand real estate investing at 17, but I just wanted to know if it is worth it to invest in getting your real estate license and then representing yourself on a deal and getting commission on it? Or is that even possible? Thanks

    submitted by /u/theholyassasin
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    Selling our rental property. Need Advice. MN

    Posted: 10 Jul 2020 07:57 PM PDT

    My husband and I are selling our rental townhouse. We originally live in the townhouse and bought a single family home when the market crashed and have been renting out our townhouse since. I know we will need to pay capital gains tax when we sell it. My question is: We need to do around $12K in repairs to put it on the market and get a decent price for it now. Repairs include: appliances, flooring, painting ceiling and walls throughout. What of these repairs will we be able to write off on our taxes? Will this take away from our capital gains taxes we will need to pay? Do we still have to pay this if we reinvest in a new property/vacation home?

    We have no one to talk to about this and have no idea where to start/who to contact for advice on this.

    Thanks!

    submitted by /u/i-make-the-rules
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    Recommendations for a General Contractor in NYC area

    Posted: 10 Jul 2020 03:50 PM PDT

    I've been looking for a GC for a project in Queens; thought I'd ask here, as well. Thanks!

    submitted by /u/jlrz
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    Can you Flip a foreclosure?

    Posted: 10 Jul 2020 06:59 PM PDT

    I'm very new at REI in general so I apologize if this is a dumb question. But Ive seen alot of foreclosures going for very cheap on Zillow, and I understand it's often because the mortgage holder wants to cut losses and get what they can as quickly as possible. But then I also see this same house has a Zestimate of much more than the price (i.e. house is going for 84k and has a zestimate of 160k).

    Is this the estimated equity after fixing everything? And if it's not and this is just the as-is value of the house, I'm wondering what is stopping someone from getting the house under contract and wholesaling it to a cash buyer for a quick profit?

    submitted by /u/LegendOfXela14
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    Contractor did a rehab and the stairs are a big injury liability concern. Contractor not returning my calls or messages. What type of lawyer to consult with?

    Posted: 10 Jul 2020 09:22 AM PDT

    After spending 40k on a rehab in a good neighbourhood in the suburbs of Kansas City, the tenant that entered the unit initially complained about nails sticking out very far out of the steps and not being able to hammer them back in. A few weeks later he said that multiple people have slipped on these stairs and the nosing came off way too easily. Then he told me that he measured the stairs because he was so concerned and they are not up to code.

    The contractor claims a one year warranty on his work. I've been trying to get in touch with him through text, calls, emails, and facebook and he's ignoring me. His facebook page posts a new rehab project every few days so he is active but is ignoring me.

    I may have to re-do the stairs now. I want to sue him for the liability that he put me under and for not honouring his warranty - but I'm new at this stuff and don't know what type of lawyer to search for. Anyone have any tips?

    submitted by /u/deanat78
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    Maximize rental income: better to subdivide one big SFR or own multiple small SFRs?

    Posted: 10 Jul 2020 04:11 PM PDT

    Like the title says, it is financially better to subdivide one big SFR or to rent our several smaller SFRs?

    submitted by /u/maraschinoBandito
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    Co-op in NJ

    Posted: 10 Jul 2020 03:32 PM PDT

    Hi Reddit!

    We have been looking for refinancing out condo (co-op in NJ) with barely a couple of lenders ready to work on such a refinance project. Can anyone please provide some leads? Highly appreciate it as we would really like to lower our monthly payments and interest rate too if possible. Not sure if this is the spot to ask but we have googled for leads without much luck. Investors bank is our current lender.

    submitted by /u/nfs283
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    Real Estate Book Recommendations

    Posted: 10 Jul 2020 03:13 PM PDT

    I'm considering entering the realm of Real Estate Investing.

    I like the idea of rental income, but also the idea of buying a place for a good deal, and selling it for a promissory note to collect income (idea from "Rich Dad").

    Can you recommend any books that could help me better understand real estate investing?

    I'm almost done with "Rich Dad, Poor Dad". I'd love something in this style; very informative, but easy and fun to read.

    Thank you

    submitted by /u/ICDF-Augustus
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    Question for the mortgage brokers and loan underwriters in here

    Posted: 10 Jul 2020 03:05 PM PDT

    I'm currently under contract and set to close on a three unit building on July 17th. My lender is requesting bank statements to show liquidity. While I have a solid chunk of money to put down (20% plus a bit of reserves on an 800k purchase), I borrowed 200k from one of my private investors for this deal, as I typically do when acquiring a new deal. This is only my second time working with a bank to get a commercial rehab loan, as I have been using hard money for the last few years and they never request bank statements. And the first time I worked with this bank I had a broker get the loan processed who I believe pulled some shady shit.

    I'm wondering if the bank will be concerned when they see a wire for 200k from two weeks ago from my private investor, basically showing that half the money in my account isn't really mine. Is this a valid concern? Is there a way to somehow skirt around this if so, or a good reason I can provide them if they ask that would be acceptable?

    submitted by /u/AlonzoSwegalicious
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    When looking to buy a rental property with active tenants, what are some good questions to ask the buyer? Any particular documents or things you ask for?

    Posted: 10 Jul 2020 10:19 AM PDT

    What questions do you ask, or what do you look for when looking into an active rental property.

    submitted by /u/Dope_David
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    Thinking of buying second home and renting out primary residence

    Posted: 10 Jul 2020 01:41 PM PDT

    Hello!

    We are getting ready to buy our second home so I've been doing some research on how this would work out in taxes. I think we can likely get $3600-3800/mo for the home and my mortgage+prop tax is $3400/mo.

    I've been reading there once you rent out your property, you can calculate depreciation on the building at 27.5 years. Hopefully, that will cover most if not all of the rent. My question is that since I've already lived in the home for 6 years as my primary residence, do I need to have an adjuster come out and provide an estimate for the home to calculate the depreciation of the building over 27.5 years?

    Goal here is to figure out if I'm going to be taxed on the rent collected because if so, we will need to factor that into our calculations. Thanks!

    On a side note, I can do a $250k cash out refi of my primary while I'm still living in it but if I do that, I'd have to pay 1 pt in closing costs (so total closing costs would be close to 10k) and my monthly would bump up to $4400/mo.

    submitted by /u/datousteve
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    Refinancing and buying a new house, but I think I should probably wait. Then again no one can "time a market".

    Posted: 10 Jul 2020 11:11 AM PDT

    I own a duplex and have been living in it for 2 yrs and renting out they other apt. I'm going to refinance and I'm expecting the new value to be ~300k from 249k when I bought it. Basically just looking to bring my interest rate from 4.25 to 3.25.

    Then, emotionally, I really want to buy a house in the burbs from my fiancee and I to move into. But the crazy prices are making me feel like I need to wait. However I really want to move out of my current place into a bigger space.

    So I'm thinking refinance now, close, then look for a new home and then buy. Or refinance, close, rent for a yr or two, then buy something.

    I've been trying to weigh the pros and cons of refinancing and buying a new property. The problem that scares me the most is I buy super expensive right now and then can never sell the house for at least what I bought it at. Then again if you're having to pay more monthly (assuming future higher interest rates but lower home values) you're still throwing money away. But you may also not make money or break even when you sell in the future.

    What thoughts have you all? Anyone in a similar situation? Anyone waiting a yr or couple yrs to buy or are people just continuing to buy through all time high prices?

    submitted by /u/piggiesinthehoosgow
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    Credit score tanked from 1 missed utility bill. 800 to 660's. Preventing me from getting mortgages. Advice?

    Posted: 10 Jul 2020 10:23 AM PDT

    Just figured this out as I'm under contract to purchase a house.

    Utility bill from a rental house I sold was sent to collections in October 2019.

    I paid the debt collector (HELVEY & ASSOCIATES) in full (only $120, one bill) In January 2020 once I realized.

    Credit was still good in the 800's when I was mortgage shopping 2 months ago.

    Just got under contract on a house, and realized my credit is now in the 660's, only due to this one thing sent to collections.

    Now the mortage has much higher closing costs and is more expensive... Not even sure if I'd be able to do a non-owner occupant loan.

    Lender says I either need credit score to go up, or to get a letter from the debt collectors saying "this mark should be removed" sent to the mortgage lender.

    Any Idea How I can fix this?

    submitted by /u/rackball
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    NJ Considers Bonds Paid for by Statewide Property Tax!!

    Posted: 10 Jul 2020 10:09 AM PDT

    Property Tax Article

    Ever think that NJ property taxes could get any higher? I just heard about this law through word of mouth and found it online to be true! NJ now has the ability to raise money for the general fund by selling up to $5 billion in bonds. Funding would be drawn from existing sales tax first. If it doesn't provide enough revenue, municipalities would be required to levy an additional property tax to facilitate retirement of the bonded debt.

    I am not an owner of real estate in NJ yet. I just graduated from college and am living at home. Is this law going to affect real estate investing in NJ dramatically?

    submitted by /u/fiorenza1116
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    Homeowners Insurance Concern

    Posted: 10 Jul 2020 09:57 AM PDT

    If I am living in a property and renting out a few extra rooms, do I need to inform my insurance company? If so, any idea how much my rate I'll go up?1

    submitted by /u/Jersey2011
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