Real Estate Investing: Thoughts on the up coming “housing bubble”? |
- Thoughts on the up coming “housing bubble”?
- Limited by Debt to Income Ratio. How do other investors get past this hurdle?
- Advice for a 19 year old looking to invest
- How do you buy an apartment complex?
- Investing in Real Estate vs. Stocks / ETFs - are my numbers correct?
- Rental with a pool?
- Curious what others' rates of return are for residential investing.
- Has anyone opted for no insurance? DP3 policy...
- New to real estate investing. Can someone explain (in layman's terms) how refinancing a home works in the example below? Would you take this deal?
- Tenant caused Fire need advice
- Newbie questions
- Any recommendations for learning about wholesaling?
- Cash Out Refi Rate/Term Check (3.25%, 1.25% Pts + $6,256.95 Fees)
- Private cash investment?
- Are market prices too high right now? (December 2020)
- Can you assume a mortgage?
- Changing Commercial Loan to Residential Loan
- Renovating a crack house
- Lender & Realtor told me I should give up trying to find a multifamily
- Private Lending Question - Real Estate
- Buy out partner and rent or sell house?
- Replacing window A/C w/mini split increase rent potential or property value?
- Anyone have any experience with NYS grant programs?
| Thoughts on the up coming “housing bubble”? Posted: 16 Dec 2020 08:23 PM PST Everyone has been saying that a lot of Americans will be foreclosed in the next upcoming months. Is this true? If so, can you explain it for a beginner investor? Or do you think it's a stretch? [link] [comments] |
| Limited by Debt to Income Ratio. How do other investors get past this hurdle? Posted: 16 Dec 2020 12:42 PM PST First off, a little background. My wife and I bought a 4plex in Los Angeles at the beginning of 2014. We lived in one unit and rented out the other three. Our tenants covered the mortgage so we were able to save up money while essentially living in LA for free. After a few years and some increased rents we started looking for our next property. We were looking for a house for ourselves in a neighborhood with better schools. We'd have some increased cash flow from renting out our unit so we thought we'd be able to afford more, but it turns out we're actually still limited by our debt to income ratio. Banks want to see a debt to income ratio of less than 43% for a conventional loan. So, unless the 4 plex rents for 2.34 times the PITA, it will diminish our lending power for the next property. Considering that most investment properties being sold in LA aren't even close to that, is investing in LA a fool's errand? It feels bizarre to have increased our monthly cash flow by thousands, but being able to afford less for our personal home in the process. How do other people seem to amass property after property? On a positive note, our neighborhood has greatly gentrified since 2014 and rents have almost doubled. We've done full remodels on 2 of our rental units and we're starting the 3rd right now. We're hoping to have it finished and rented in early spring. And believe it or not, the rents have gone up enough that we will have finally crossed the debt to income ratio for the property. In reality, the rents from the 4plex will cover it's own mortgage and the mortgage of our personal home. I'm not complaining at all, but it's taken us 7 years, some great fortune with the neighborhood, and a lot of remodel work to get here. I'm just surprised at how difficult it has been to take the next steps in investing... [link] [comments] |
| Advice for a 19 year old looking to invest Posted: 17 Dec 2020 12:58 AM PST Hey guys! Like the title says I need advice on what to do with my money so to say haha. I've been working ever since I turned 16 and right now I have a bit over 20k sitting in cash doing nothing, and its been bothering me that I have all this money just sitting here doing no benefit to me. Online I saw a few videos of people bragging about making a down payment for a tripelex and renting the three units out and making a effortless profit from the rent minus the mortgage payment. I'm interested in doing something like this at least with one appartment, I have the money for a down payment and a good credit score, the only thing that I'm missing is a high annual income. Before covid I only worked part time and after the quarantine started I stopped working at all, so my annual income is low. Is there anything that I can do to get into investing in real estate without having a high income? For example, could I go to a bank and tell them that my business plan is to make a down payment and try to make profit from renting, and that will be my income? Idk if that makes sense, but I mean like trying to explain to the lenders that my income will be from an investment that I need money from them to invest into (?) Or are there other options for me other than getting a mortgage early on? Also, I'm new to this sub so idk if that matters, but Im located in Minnesota in the United States. [link] [comments] |
| How do you buy an apartment complex? Posted: 16 Dec 2020 02:48 PM PST I have 3 rentals in a .1 mile radius. I was just going to keep collecting single family rentals until this apartment complex popped up right in that little area. Under contract on house number 4, have $29k earmarked for that rental, that $29k is not included in my cash below. I have $90k cash, this number increases by $3k each month. The apartment is listed at $420k. It doesn't hit my margins until $385, but I think it will sit for quite a while because it's over priced, $400 would be a decent going rate if I'm being honest. This is from google looking at what it was listed for, I just sent the agent an email asking for rent roll. I have $100k in accessible Roth money (I don't want to touch it, but it usually works as "reserves") and I have $70k in 401k money. What kind of "baseline" do I need to buy an apartment? I know with single family rentals it's 25% down and 6 months of mortgage payments. I'm assuming an apartment complex has more complex requirements. EDIT: My DTI is good if that matters— $10k income monthly, $1600 debt. All mortgage debt. [link] [comments] |
| Investing in Real Estate vs. Stocks / ETFs - are my numbers correct? Posted: 17 Dec 2020 01:19 AM PST So I'm (re)considering investing in real estate. However, I can't see that it would be profitable in my area. Here are my numbers and assumptions: An interesting 2-room appartment around here would cost approx. 200K. 20% down is 40K, mortgage for 40 years at 2% would cost around 550$ a month with 15K to pay at the end (numbers from an online motgage estimator from my bank) and rent for a comparable appartment around here would be around 600$. Cost for buying and so on is around 20K. Number breakdown is upfront invest (for me) is around 60K. With a rent of 600$ that would be amortized after 8 years. Only after that, the saving for me and return on invest begins. After (then more) 30 years, I would own that flat and therefore own ~200K more than now. Now in contrast, if I put those 60K in ETFs and waited 40 years, with an average return of 5% (conservative), it would net me 400K Is there a mistake in my thoughts and calculations? Or am I just in the wrong environment for becoming a landlord? [link] [comments] |
| Posted: 17 Dec 2020 12:48 AM PST I have an opportunity on an off market property to purchase for around $250k and with limited rehab ($15k) it should be worth $300-315k. Good meat on the bone but not a ton for a flip. After taxes, holding costs, and realtor fees I'd probably only make $15k, which isn't terrible but also seems like a missed opportunity. My main strategy is buy and hold, which I'd prefer but this property has a 10ft pool with a slide. I'm getting extremely negative feedback on rentals with a pool for liability and maintenance. I feel decently protected on liability as I carry an umbrella policy, but trying to get my head around maintenance and if it's really a value add (I'm in Vegas so it should be right?). I'm actually thinking it might limit my tenant pool (families with extremely young kids, or those who don't want to deal with the added costs). Anyway, filling in the pool sounds crazy to me as houses with pools do sell for more. Can anyone give experience/advice on owning a rental with a pool? Any additional strategies on investment properties with a pool? [link] [comments] |
| Curious what others' rates of return are for residential investing. Posted: 16 Dec 2020 09:17 PM PST I haven't begun investing in residential real estate but am in the process of researching my first property. My uncle (who's quite experienced) had pointed out that he can't make a profit if he can't earn his money back in 5 years, but that was before the era of low interest rates that began around 2009, and he's in FL. I don't see properties like that around my area in CA; annual rent-to-price ratios look closer to 5%-9%. I'd love to hear about typical and "good" metrics others target in their portfolio properties. To be more structured, what I'd be curious about are:
Thanks in advance. [link] [comments] |
| Has anyone opted for no insurance? DP3 policy... Posted: 16 Dec 2020 07:52 PM PST I'm looking at a really well maintained 1950's home for $30,000. It's basically move-in ready now and I think I can rent for $800ish a month. It's small with no central AC. I'm in Florida so window units are fine. Probably has cloth wiring hopefully the kind with Romex on the inside but the panel is undersized for what insurance companies like. Insurance on this thing will be a nightmare. I'm guessing $1200 to $1500 min unless I put $5000 in it (I'll know more next week). I have a few properties and this one would be by far worth the least. I have an umbrella policy. Is there ever a scenario where you don't get insurance? I'm obviously not worried about the loss of the house. The main concern I'm guessing is a tenant getting hurt in the property and suing. [link] [comments] |
| Posted: 16 Dec 2020 07:32 PM PST Just wondering how refinancing this works: Buyer paid $41k cash to buy a multi family home today (way under market value). Buyer is doing a cash out refinance this month to get 60% of what the home is worth. Depending on what the appraisal comes back at the buyer should get a check for around $100,000 from the lender. This will cover the purchase, some cosmetic updates, and will leave buyer with money to buy another property and repeat the process. The monthly payments on the cash out refinance will be roughly $400 a month. This property will bring in $3,000 a month which still leaves buyer with well over $2,000 a month in extra passive income. Not only did buyer essentially get a free 3 unit multi family property but the buyer is getting double their investment back this month from the refinance. The tenants will be paying off mortgage and buyer is increasing monthly passive income by $2k+ a month. [link] [comments] |
| Tenant caused Fire need advice Posted: 16 Dec 2020 06:43 PM PST Hi all, I'm 4 months in on renting out my first SFH rental property and I got a call tonight from my tenant that there was a fire. Turns out they left a pot on the stove and the stove on and then left for about 4 hours and came back to a fire. Thankfully no one was injured and the house didn't suffer any structural damage as far as we can tell. I'm waiting till 8am to contact the insurance company for next steps but I wanted to post here and see if anyone else has gone through a similar experience and if anyone has any advice for dealing with the situation. Thanks in advance. [link] [comments] |
| Posted: 16 Dec 2020 09:55 PM PST Hey! I'm considering making my first investment property purchase. It's a Multi-Family home (currently all rented). A few questions. 1. A few years ago the property had a fire and was renovated. Is this a red flag? 2. Anybody know if I put it under an LLC can I live there and keep the same protections? [link] [comments] |
| Any recommendations for learning about wholesaling? Posted: 16 Dec 2020 03:32 PM PST I know there is a wiki page with a lot of recommended books but I was wondering where to start specifically with wholesaling. I'm pretty knowledgeable about the other fundamentals of rental properties but I wanted to learn more about wholesaling due to its low barrier to entry. Does anyone have any recommended influencers or sources/communities? [link] [comments] |
| Cash Out Refi Rate/Term Check (3.25%, 1.25% Pts + $6,256.95 Fees) Posted: 16 Dec 2020 09:26 PM PST I am looking to cash out refi an investment property (condo) in San Diego, CA. After shopping around the best I have been quoted for a 30 year fixed rate refi is 3.25%, with 1.25% Pts + $6,256.95 Fees. I have excellent credit. Anyone have a lead on a better loan? [link] [comments] |
| Posted: 16 Dec 2020 03:50 PM PST I recently have been very successful in a flip to rental that I got approached from a colleague about his potential interest in giving private money as a loan for another one. How would this work? What are your experiences in private money? Thank you [link] [comments] |
| Are market prices too high right now? (December 2020) Posted: 16 Dec 2020 07:05 PM PST I'm closing on a duplex in Southwest Michigan right now for $225k, and everything has gone very smoothly thus far: inspection was clean, sellers agreed to the concessions after the inspection, and I locked in a 2.5% interest rate. The only thing that's left is the appraisal. I'm starting to get slightly worried, however, considering the state of the economy and the home values skyrocketing this year. If the appraisal does end up coming in at $225k though, do I have cause for concern? I feel like I'm overthinking things but does anybody else have an opinion? My plan for this duplex is to hold onto it for a long time (at least a decade) so I expect that even if the housing market does tank next year, I can weather it as I do not have any plans to sell anytime soon. Also, I modeled the financials, and as long as I have tenants for at least 10/12 months, I can afford to lower the rent by 15% from where it is now, and STILL be net neutral (pay for mortgage, insurance, taxes, and maintenance) on cash flow. I definitely expect positive cash flow under market rent, but in my distress scenario, I can afford to lower rent by 15% AND be vacant for 2 months and be okay. Should I be worried? Is it the wrong time to be purchasing a house? Should I wait for a "correction" in the housing market? Again, all my financials check out. I'm not concerned that I'd have to sell the property in a distressed market, as long as I have tenants under the conditions that I mentioned above. The area I'm from does NOT have a very volatile RE market historically (appreciates at reasonable amounts and when the market did correct in 2000's and 2008, it wasn't leaving people broke here either). [link] [comments] |
| Posted: 16 Dec 2020 06:16 PM PST I have a friend who's dad had a property in another town. The father has since passed and the friend wants nothing to do with the property. I would like to simply take it over. Can I just approach his bank and have them put the mortgage in my name? [link] [comments] |
| Changing Commercial Loan to Residential Loan Posted: 16 Dec 2020 05:06 PM PST Looking at a residential rental complex with eight units. It used to be two separate parcels with four units each but the current owner combined it into one parcel a few years ago. Therefore the only way to purchase it now is with a commercial loan. I was thinking that I could split it into two separate parcels again and then refinance to get residential rates and terms. Wondering if anyone has done something similar or if lenders can advise. Is this possible? What pitfalls or issues could I run into and what other options do I have? Thanks in advance. [link] [comments] |
| Posted: 16 Dec 2020 12:30 PM PST I've been looking around and can't find a whole lot of information on this, but does anyone have any experience renovating a crack house? I don't know if the, uh, "product" was made on-site but the previous tenants were definitely of a certain type that left holes in walls and ripped pipes out of the wall. As it stands, the property is a steal and with enough gusto I know that it can be turned around. The question is, what goes into this besides a fresh coat of paint and a shotgun to keep other crackheads at bay? [link] [comments] |
| Lender & Realtor told me I should give up trying to find a multifamily Posted: 16 Dec 2020 12:23 PM PST So my budget is super tight and I live in an area that is really expensive (Austin, TX). It feels impossible to find a good deal in this area and they told me I should just do single family instead. My question is does this mean I have to put off investing for the time being? Regardless I want to buy property and live in it but what should I consider or what are my options even? I want to be an investor but it seems like it's not happening anytime soon. [link] [comments] |
| Private Lending Question - Real Estate Posted: 16 Dec 2020 03:39 PM PST For a private loan what terms should I seek? For instance, interest only ( doesn't sound smart but is it different with private lenders? I have not qualified for refi and need to get out of this current loan which has reached it arm and just taking my money. IF anyone can lend some coaching or experience in this arena, please. [link] [comments] |
| Buy out partner and rent or sell house? Posted: 16 Dec 2020 08:05 AM PST I'd love your thoughts on this scenario: My partner and I are splitting amicably. We own a home together 50/50. They can not afford to buy me out of the mortgage but I can afford to buy them out. Thanks to this sub, I am thinking of buying them out and turning our home into a rental for passive income, however I've never done this before. Which option would you choose and why? Option 1: Buy Out Home appraises for $750K We have a $420,000 mortgage with $408,000 left. I believe this means we have $342,000 in equity total, so I would buy them out for half at $171,000. The home could rent for $5k/month The mortgage payment is $3,450/month (but I could likely lower with a refi) That means $1,544 cash flow/month. By my math, it'll take 140 months or 11 years to make my $171K profit back. Question: This seems like a good way to make passive income but is it a sound investment if it takes me 11 years to make that investment back? I also have not accounted for a property manager, repairs, etc. for the house. Option 2: Sell the house and cash out We paid $620,000 for the home. Based on comps on our block, home would *hopefully* sell for $800K Closing costs, realtor commission fees and repairs (our AC unit died in Sept): $87K Total profit: $53K or $26,500/each TLDR: I want to expand my portfolio and get into rentals for passive income using what I already have: partial equity in a home. However, it seems like it's going to take a long time to make my investment back. Am I thinking of this in the right way? Which option would you choose? Thank you! [link] [comments] |
| Replacing window A/C w/mini split increase rent potential or property value? Posted: 16 Dec 2020 10:19 AM PST I have a small four-plex, all 1/1, with only window a/c units. Would replacing a/c with mini split be a good improvement appealing so new renters would pay higher rents? Would they also appeal to buyers when I sell in a couple years? [link] [comments] |
| Anyone have any experience with NYS grant programs? Posted: 16 Dec 2020 08:44 AM PST I'm currently looking into househacking with my first real estate purchase. While looking into FHA vs Conventional loans in my area, I came across a bunch of grant programs like Achieving the Dream Program / Neighborhood Revitalization Program, etc. Looking into these programs makes them seem almost too good to be true but I can't tell if they're overall worth the extra hassle of a lien on the property or jumping through extra legal red tape, etc. Does anyone have any experience with these programs? Are they worth going for? FWIW - I have enough cash saved up where I could do a regular conventional or FHA loan without these programs, but obviously an extra 15k that wouldn't have to be repaid (or repaid at a prorated amount should the house be sold) would be awesome. Thanks! [link] [comments] |
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