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    Real Estate Investing: Monthly Motivation Thread: December 21, 2020

    Real Estate Investing: Monthly Motivation Thread: December 21, 2020


    Monthly Motivation Thread: December 21, 2020

    Posted: 21 Dec 2020 12:00 AM PST

    Monthly Motivation Thread

    Welcome to this monthly series. This post will repeat monthly, on the 21st of every month.

    This is your opportunity to share your successes, accomplishments, as well as provide us with an update on your goals and strategies as they pertain to Real Estate Investing.

    Example Questions:

    1. What are you hoping to accomplish this month?
    2. What method(s) are you using?
    3. Have you closed any interesting deals recently?
    4. What mistakes did you make, and what did they teach you?
    5. Anything else you learned and would like to share with others?

    Veteran investors feel free to provide useful tips and feedback to other people's goal, as well as some of your recent successes, or failures.

    submitted by /u/l3erny
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    Would you buy a house next door or on your own street as an investment property?

    Posted: 20 Dec 2020 08:35 AM PST

    Neighbor about to list home, wanting to buy a rental property. Looking for pros and cons

    submitted by /u/dscar92
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    Rental Cashflow Calculator - after getting frustrated with BiggerPocket's and other calculators for analyzing deals, I made my own with extra features to make deal analyzing fast and smarter. Free to use, I hope you find it helpful!

    Posted: 21 Dec 2020 01:16 AM PST

    Hi all

    Over the hundreds of deals I've analyzed, I noticed there were certain calculations that I kept wanting to do, but the existing calculators weren't efficient. So I made a new one: https://cashflowcalc.com/

    The "About" tab lists a bunch of the features, but one I particularly want to mention is the ability to do a "reverse calctulation": if you know what's your target return, it will tell you what's the max price you should offer.

    I would warmly welcome any feedback!

    submitted by /u/deanat78
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    Save for second or cash out refi on current?

    Posted: 20 Dec 2020 08:37 PM PST

    Which is better? Save for down payment on second home, or do a cash out refi on our current home?

    We have about 70k in equity. We would need about a 30k down payment for new home, and we could save for that in 2 years or so. 2.75% current rate, va, lived here 5 years, IRRRL refi in March. Roughly 550k budget for new home, in extremely hot market with same day sales. We do not want to sell our current home, we want to keep it as a rental... However, I am open to reccomendations.

    submitted by /u/Audreyholmgren
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    Current rates for investment property?

    Posted: 20 Dec 2020 05:15 PM PST

    Does anyone know more or less what the rates are now for an investment property? Have the rates lowered for those mortgages as well?

    submitted by /u/cocofrost
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    Suggestions for negotiating inspection findings - Windows

    Posted: 20 Dec 2020 06:53 PM PST

    Offered full price for a home built around 1990, and seller negotiated with me to pay several thousand over asking, which is fine. Did not ask for any money toward closing or concessions. There where a couple other offers FYI, at least one that was comparable to mine.

    We are in the inspection period now, and the inspection uncovered that the window frames are shot, the panes and frames are loose and held together by duct tape. We are having a window specialist get some estimates for repair / replacement now.

    We didn't see the windows when we walked through as the curtains were drawn for the damaged/broken windows and broken frames, and we neglected to pull back the curtains (Lesson learned for next time),

    Anyhow...

    1. If appraiser sees the damaged windows, would they likely deny the mortgage loan?
    2. Advice for asking seller to replace / repair windows? We can get multiple quotes if needed if seller doesn't like the first quote. Maybe we can find someone else cheaper. Also I am thinking I can offer to the seller that I would take care of other minor items that came up in the inspection possibly. I would be prepared to walk out if I have to... It would be wise to keep my last remaining dollars as an emergency fund, rather than buy windows and be left with zero dollars. Seller will be getting a 200,000+ capital gain even after depreciation recapture.

    Am well aware of my inspection period deadline FYI

    submitted by /u/RocksArePhun
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    Cincinnati Investors, Help!

    Posted: 20 Dec 2020 02:10 PM PST

    Investors in Cincinnati -- what are you currently seeing in the markets? I'm looking to get started in the city come summer time and doing my research, but I'm interested to hear where y'all are putting your capital and why?

    Some areas I'm hopeful for:

    - Price Hill

    - East Walnut Hills

    - Evanston

    - Clifton (student housing)

    Additionally, what are your thoughts on Mt. Auburn?

    Thanks!

    submitted by /u/RealEstate_Freedom
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    Next multi-family investment.

    Posted: 20 Dec 2020 06:29 PM PST

    My goal is to buy 1-2 multi family investments out of state next year and I'm between Austin, TX, Indianapolis, IN & Dayton, OH. My friend is pushing me towards AZ (he's down there).

    Where are you looking for your next MFH?

    submitted by /u/JMSeaTown
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    Realtor tapping into wholesaling

    Posted: 20 Dec 2020 11:06 PM PST

    I'm about ready to send these yellow letters out. As a realtor are there any rules with this? I have a partner who is not licensed. How should we approach this? What's a good list to target and should i hand write anything? Please share some templates. I'm in Northern California

    submitted by /u/FLFinest3
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    Looking to buy my first rental property

    Posted: 20 Dec 2020 09:23 PM PST

    I'd like to start this off by saying I've only been doing research on this topic for a few weeks. I want to live in one of the units I'll be purchasing for a while to get out of renting myself. Ideally I would like a duplex to avoid having to deal with too many tenants.

    I'm having a bit of confusion between what I hear on the internet and what I see on Zillow. The internet says 80% of rental properties are not going to bring a cash flow while all the math I do on these properties says I'll basically live for free. If I wasn't planning on living in one of these units it seems like every property I look at could easily have a $1000 cash flow monthly.

    For instance I'll use an example that I thought would be the least ideal property to buy but still would bring positive revenue.

    $489,000 2 units that would easily rent for 2k a piece.

    20% down would equal about a $1,573 mortgage

    Property taxes - $539 Home insurance - $171

    Total that's $2,284 on a property that can bring in $4,000 a month. Even if you put away $700 a month for future issues, you'll still be in the green $1,000.

    Am I missing anything or is this just the norm? Everything I'm looking at is in Massachusetts. I'm sure there's things I'm missing but that's why I'm here asking.

    submitted by /u/jmooree30
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    Do Craigslist bandit ads actually work?

    Posted: 20 Dec 2020 08:07 PM PST

    I browse Craigslist for sale by owner for houses and I see a lot of bandit ads of people saying they will buy your house for cash. I'd be interested in putting up one of those ads and am wondering if anyone has actually had success with it. Thoughts?

    submitted by /u/picifoyu
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    Advice for investing in real estate in ATL (+ surrounding suburbs)

    Posted: 20 Dec 2020 07:15 PM PST

    Hi everyone! I moved to Cobb County outside of ATL, GA last year. I am currently looking at the prospects of buying a home or multi family home for house hacking purposes in the area.

    Does anyone have any insights into the atlanta market and key things i should look out for as I begin my research? I haven't been in the area long enough to be fully comfortable in my knowledge of the area.

    submitted by /u/cryogenxx
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    Potentially buying my first house with a friend..good or bad idea? Pros and cons??

    Posted: 20 Dec 2020 06:58 PM PST

    I'm getting ready to move in a few months, and my buddy and I are looking to get a place together. Reason being we are in a band together and moving to a new city. House would be for living and jam/recording space. We're both 27 and single w 750+ credit. He has a good moral compass, great job, finances on point etc. Ideally the perfect candidate to purchase a property with. Ideal price range is $200-300k. 20% down payment so $40-60k. Still discussing mortgage options but 15yr seems most likely. This is where it gets interesting. Based on available funds, I would only be able to cover $10k of the down payment due to financial constraints. He would cover the remainder. This essentially would give me anywhere from ~16-25% ownership initially, which I'm fine with because as we pay off our mortgage equally, my ownership % will increase to a certain extent.

    My goal here is to start building some equity, instead of just paying him rent monthly (he is buying regardless and my extra $10k for the dp bumps up our price range giving us more/nicer houses to choose from). I'm looking to stay in this situation anywhere from 3-7 years as I eventually want to start building a portfolio of investment properties and feel like based on my current financial situation this gives me the best chance to get started on that journey.

    On paper this seems like a sweet deal but I'm wary of what could happen after a few years as so much could change between now and then. We both realize the 3-7 year timeframe makes sense for both of us, but I'm curious as to what this looks like on the back end if one of us wanted to move out sooner than the other, or other unforeseen circumstances.

    Has anyone ever gone through something like this? What did you learn? Any recommendations for how to approach and deal with the endless possibilities of things that could happen? Any input would be greatly appreciated. Thanks all!!

    submitted by /u/da0NEn0NLYx
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    UC on first investment property. Questions.

    Posted: 20 Dec 2020 06:23 PM PST

    UC on my first investment property, it's a duplex. I'm excited, nervous, all the above...

    We will most likely set it up as an LLC. That being said, what do you guys do with net profits each month?? Are you putting back into the house? Escrow account?

    Thank you!

    submitted by /u/handgunz4hearts
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    Real Estate Loss Tax Deduction

    Posted: 20 Dec 2020 07:36 AM PST

    We will be selling one of our investment properties at a loss after all costs. Given that we are real estate professionals, I'm under the impression that we can deduct this loss from our income. Has anyone had any experience with this?

    Here's the scenario: purchased the home for 185k then put 50k into it. We will likely have to sell at 200-225k. Would the loss be tax deductible or is it only based on the initial purchase price?

    submitted by /u/rlmerritt
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    Are prices too high to make RE investing worthwhile? I live in AZ and I just don't even think it's worth my time to invest in real estate now. Bought my house in 2010 and now everything is sky high.

    Posted: 20 Dec 2020 05:37 PM PST

    So I have always wanted to get into investing in real estate. Primarily in 2010 I wanted to get into it but did not have a lot of money or a high paying job. I did quit a commission only sales job so I could get a 30k a year w2 job that would suffice for a FHA loan up to $1100 a month payment which was $155k or so with 3.5% down. Got a house for 150k in Scottsdale AZ. Rented out the extra rooms to cover the mortgage and got free rent. Roommates have left and now it's me and the fiancé in the house which is now probably worth 450 to 500k now.

    The house also allowed me to quit my shitty job that got me the loan to buy the house lol. Which then led to me buying storage lockers and then starting an eBay/Amazon resale business. So long story short I'm now older and worth more than $1 million and trying to find ways to make passive income with real estate but it just seems like everything is too expensive to even be worth my while. If you had 500k in cash how would you leverage it right now in real estate given that the markets are red hot in many areas...

    submitted by /u/Daytraderjoey
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    Insurance laundry list email

    Posted: 20 Dec 2020 04:19 PM PST

    Almost exactly one month to the day into ownership of my newest property, my insurance agent emails me a small list of things stating he knows I'm working on them and implying they should be done. Now I'm very proactive with my properties and have a good amount of improvements and upgrades done to other properties. I fully intend to address some of the issues as some are safety/health related. They are not large liability type issues but issues that I will be addressing sooner rather than later nonetheless. But one month in, receiving an email asking if they are done kind of rubs me the wrong way. Nothing was ever discussed up front and to think they would already be fixed 30 days after closing is ridiculous. What power do they truly hold? I'll be talking to my agent tmro. I'll be addressing the issues but wtf.

    submitted by /u/rentalredditor
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    Holding a mortgage

    Posted: 20 Dec 2020 11:40 AM PST

    I have a tenant who wants to buy the house he rents from me and I'd like to sell it.

    Problem is he owns his own business that is pretty successful, yet a bank won't give him a mortgage because he doesn't have W-2. I am very familiar with his business and know it isn't going anywhere and is expanding due to ridiculous demand for the product.

    I'd be willing to hold back a mortgage, but how does that work since I also currently have a mortgage? How do I pay off my mortgage or otherwise structure this?

    House is worth 415k and I owe about 305k on it. Any advice?

    submitted by /u/financialanon
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    Appraisal gap...

    Posted: 20 Dec 2020 03:06 PM PST

    A property I have under contract unfortunately under appraised and I'll have to come up with the appraisal gap money I put into the contract in order to secure the deal.

    Is this money "lost" or does the appraisal gap money go towards my equity in the house? I believe it is lost.

    Thanks!

    submitted by /u/AtTheLoj
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    blindly bid for home property at online auction Pasco county, FL --need help

    Posted: 20 Dec 2020 08:20 AM PST

    I got excited and bid a home for 45K at county online auction site last week without much of ground work except that I physically checked from out site and the home value of it was showing up for about 200K in zillow. I thought I kind of won a lottery deal, but now I am worried of what kind of issues and cost I need to through and why my bid won for such a low price of home value?

    Any guidance on next steps greatly appreciated. Thanks.

    submitted by /u/Rajkumar99
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    BRRRR Partnership Structure

    Posted: 20 Dec 2020 12:30 PM PST

    I am working with one other guy on BRRRR's. I will come with cash payment to buy house ($80K) and he will take care of rehab ($60k) Once it is rented, I will most likely manage. Has anyone gone through this before and come up with a structure? Ideally when we refinance we pull out all of our money.

    submitted by /u/SomeYoungGuy2020
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    Lease options

    Posted: 20 Dec 2020 08:13 AM PST

    Just a quick question. Property in looking at has good potential. I like rentals and this has a pool so it's not really something I'd want to own for a long time. Exploring different ways to profit off it and lease options interested me.

    Can anyone share experience in FINDING candidates for rent to own situations? I'm wondering how difficult it is to find people who'd be interested in that type of setup. Also, what are some of the key pieces you need in those contracts to attract buyers but also protect your investment?

    submitted by /u/obie1cajoby
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    Start Up Capital

    Posted: 20 Dec 2020 11:08 AM PST

    I'm sure this has been asked before, but how did you all get your start up capital? I'm wanting to invest through an LLC. start up but I don't have the 20% required for most investment homes, are there small business grants available or will I have to find an investor? How did you guys do it? I'm just beginning so any advice or direction is appreciated.

    submitted by /u/AppalachiaBuckskin
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    Multifamily Refinancing Terms/Conditions: What should I look for?

    Posted: 20 Dec 2020 04:37 AM PST

    I will be utilizing the BRRRR strategy of Buy Rehab Rent Refinance Repeat to grow the portfolio.

    We are looking for a delayed financing loan product that fits this strategy and mainly trying to avoid products that have high fees, a long seasoning period, and prepayment penalties. Once we renovate the property to add value (Equity), we want to refinance once the property increased in value.

    My question is around the questions, products, terms, & conditions I should be directionally aware of when having conversations with lenders.

    Below are some notes that I wrote to get the ball rolling on this:

    Refinance Financial Products

    • Convention Financing/Agency Debt (Are these the same?)

    Refinancing Financial Terms To Look At

    • Amortization Periods
      • Target: 30 Years
    • Longer Terms
      • Target: 30 Years
    • Rates:
      • Target: Concurrent with Conventional Residential Rates?
    • Pre-Payment Penalties:
      • Surely I need to consider this?
    submitted by /u/Mmetr
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