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    Saturday, January 16, 2021

    Real Estate Investing: Bought for $420,000 7 months ago, house on my street just sold for $535,000, some questions on REFI

    Real Estate Investing: Bought for $420,000 7 months ago, house on my street just sold for $535,000, some questions on REFI


    Bought for $420,000 7 months ago, house on my street just sold for $535,000, some questions on REFI

    Posted: 15 Jan 2021 09:59 AM PST

    Market I am in is super hot, 20% appreciation in 2020. The house sold was a centre unit town home, 2 bath. My house is an end unit town home, 3 bath. With similar or better Reno's done (currently doing), would the home likely get appraised at a similar value to the one just sold? How influential are comparable's during an appraisal? Looking to refinance.

    submitted by /u/tbhzzz
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    Reinvest my rental property profits?

    Posted: 16 Jan 2021 12:25 AM PST

    We are approaching 6 months of profits on our first rental property (our old home). After all is said and done, We profit $141/month. What's the best move here? Should I be taking that $141 and reinvesting it towards paying down the principal? We plan on keeping the house long term, as our area has consistent growth, and it's averaged around $1200/month in appreciation over the past 2.5 years.

    Side note - we currently have an "emergency fund" solely for the rental of $10k, and have an ample amount beyond that in savings.

    Thoughts?

    submitted by /u/TravRado1024
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    Moving CA -> WA: What would you do with CA rentals?

    Posted: 15 Jan 2021 10:26 PM PST

    Hello everyone!

    Please help a middle-aged couple with two toddlers who fell into real estate investing (inherited homes, didn't sell previous homes from before marriage). We're aiming for a move from the Bay Area to Seattle (Eastside) in 6-18 months (COVID permitting). What would you do with these rental properties?

    House A:
    Pacifica, CA. Built in the 1950s. 3 bed / 2 bath, 1900 sqft. Beautiful Pacific view with a large backyard. Quirky/mysterious construction and will need significant CapEx (roof, foundation, who knows?). Cost basis: $700k. Sale estimate: $1.2M. Rent: $4200/mo. Past appreciation: 10.5% (not likely to continue at that rate). No mortgage. No gardening costs, but repair expenses for this one always seem to crop up. Property management: 8%

    House B:
    Menlo Park, CA. 3 bed / 2 bath 1400 sq/ft. Built in the 1950s. Cute cottage with excellent schools. Nothing fancy but well-done. Will likely need a new roof in < 10 years. Cost basis: $1.3M. Sales estimate: $2.3M. Rent: $5250/mo. Past appreciation: 6.6%. No mortgage. Gardening: $200/mo, otherwise low expenses. Property management: 8%

    House C:
    Menlo Park, CA. 3 bed / 1.5 bath, 1200 sqft. Built in the 1980s. Great family neighborhood with easy commute to FAANG employers. Cost basis: $1.7M. Sales estimate: $1.9M. Rent $5300/mo. Past appreciation: 1.6%. No mortgage. Gardening: $200/mo, otherwise low expenses. Property management: 8%.

    Some options that come to mind:
    (1) Hold indefinitely.
    (2) Just sell 'em, eat the capital gains, and never deal with renters again.
    (3) 1031 exchange into 3 separate SFHs in WA. Even one 1031 seems daunting. Would need to file California Form 3840 annually until sale (thanks, California).
    (4) 1031 one or more properties into single SFH and convert to residence. Note tax implications (depreciation recapture, reduction of future home sale exclusion).
    (5) 1031 one or more properties into multifamily property.
    (6) 1031 one or more properties into a commercial property (e.g. with a triple-net lease).
    (7) 1031 into a Delaware Statutory Trust (DST). These seem dangerous for inexperienced investors (possibly difficult to value, no control, very illiquid).
    (8) 1031 into a tenants-in-common interest. This seems potentially even more problematic than the DST.
    (9) Sell and invest proceeds in an Opportunity Zone / Qualified Opportunity Fund (QOZ). Another option that seems to have lots of potential landmines.

    We would be grateful for any and all advice. Made a similar move? Have you exercised one of these options, like a 1031 exchange? Have you used something more exotic-seeming like a DSTs or converting to a residence? Made a switch from residential to commercial? Or do you know any great property management companies in the SF Bay or Seattle areas?

    or ... how about a strategy to get a toddler to just nap already? Please ...

    Thanks!

    submitted by /u/razzamatazzberry
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    No income, can afford a down payment and monthly, would i be able to get a home loan with a guarantor?

    Posted: 15 Jan 2021 06:46 PM PST

    retired and living off of savings. looking to buy rental duplex.

    submitted by /u/WordsForStrangers
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    Let me know if I’m crazy or smart to use my HELOC to fund a rental property purchase and if I’m getting in over my head. Details inside.

    Posted: 15 Jan 2021 04:36 PM PST

    So I have a $65k HELOC that I was thinking about utilizing enough of to fund a 20% down payment on a rental property since I don't have enough cash to do it.

    I was thinking to pull $30k-$40k for the 20% down payment and then a 30 year fixed for the rest.

    I would end up having to pay the mortgage and the HELOC with the majority of the proceeds from the rental property but should still be able to net some cash flow.

    To add another wrinkle I recently refinanced my homestead property which I plan on renting out in 12 months and then purchase a third home to be my new homestead.

    Am I biting off more than I should? Am I crazy or is this a smart move?

    submitted by /u/joeret
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    Has anyone used self stick LVP from Lumber Liquidators?

    Posted: 15 Jan 2021 07:33 PM PST

    This is going in a vacation rental in Florida and is significantly cheaper than the interlocking version. Has anyone had any experience with this?

    submitted by /u/Savetheworldsoceans
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    Refi mortgages into a business

    Posted: 15 Jan 2021 11:37 AM PST

    My father was a landlord, but not great at the business end of things. He passed away recently and left me 4 homes and I'm trying to get a handle on them. Here is the breakdown.

    • 1 owned by a business that I'm now owner of, no mortgage, has a tenant
    • 1 owned personally by me, no mortgage, has a tenant
    • 1 owned personally by me, $40k mortgage, has a tenant
    • 1 owned personally by me, $170k mortgage, being refurbished currently, no tenant

    I want to move the 3 properties that are not in the business into the business for liability reasons. I need to refinance to make this change as the current mortgage lenders have told me they will not move it into a business name. The one property being refurbished is worth $300k+, so well over what I'm asking to refinance.

    I've tried a number of banks and none will refinance for me, or they never call me back. Some say they will only lend for commercial properties, ie multi family homes/apts worth $500k+, others tell me they don't do investment real estate mortgages, and then there are the ones that never even return my call.

    Is this normal? Any suggestions on a bank or investment group?

    submitted by /u/thelmick
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    Potential ramifications of buying in a town that may be disincorporated?

    Posted: 16 Jan 2021 01:59 AM PST

    (*I'm not sure if this belongs here or regular r/realestate, but thought it might have a better shot of getting a response here *)

    I'm curious on your thoughts whether this is some sort of huge red "don't buy here" flag:

    I've been looking to buy a single family home in my area (San Diego) and one of the towns (Lemon Grove) actually happens to have homes that "check all my boxes".

    My concern is the town has been having serious financial issues for the past few years and they've been discussing becoming reincorporated into the City of San Diego as a potential (or maybe inevitable) solution.

    (You can read a bit about it here , if you're interested)

    Should that even be a concern? I'm guessing one risk is that the town goes belly up, but then what? Just deteriorates? Or is it realistic to assume it would just be reincorporated at that point?

    Would any of those potential effect property taxes or depreciate my home value? I'm looking to live there long term, so can weather out a dip for a while with the hope it swings back at some point.

    Would this effect your decision to buy?

    Thanks'

    submitted by /u/swarleyknope
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    Buying a townhome without a great ROI

    Posted: 15 Jan 2021 12:25 PM PST

    Hi everyone! Im currently renting (just started my first job) and I'm starting to save on a downpayment for my first property. My problem is that properties in the area I live in are very expensive and there's not much offered in my market so I'm thinking about buying a townhome to live in and fix up for a few years that won't have that great of an ROI when I rent it out.

    I'm thinking that it's better to build equity in something rather than waste money (rent), even if my ROI wouldn't be THAT great on my first property. I'm talking 4-6%. Would you all agree? Thanks for any feedback!

    submitted by /u/Olevlac
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    Shopping rates and have 1 decent pre-approval. Can I make offers and change lender after offer?

    Posted: 15 Jan 2021 07:12 PM PST

    So a couple of days ago I got a decent pre-approval. However, I talked to 2 more lenders today who will send me pre-approvals in the next couple of days.

    I found a gem of a deal listed a couple of hours ago with great cash flow and cash on cash. I want to view it in 2 days which may not be enough time for the other pre-approvals to come in.

    I have 2 questions:

    1. Can I put an offer on a property using the initial pre-approval (which I would utilize worst case) and then choose a different pre-approval after if they are better rates?

    2. Can I view a property (with seller agent), put an offer, and then get a buyer's agent for myself?

    submitted by /u/encoressbm
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    What real estate sites have their email listed when the home is being sold?

    Posted: 16 Jan 2021 01:08 AM PST

    I really haven't seen too many of them other than going deeper into the agents profile to find the email.

    Is there any home listings sites that are visible to their email?

    Thank you

    submitted by /u/flatgoat67
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    refinance fully owned primary VS new mortgage for investment property?

    Posted: 16 Jan 2021 12:48 AM PST

    Hi I am looking to borrow $400k to purchase a $600k investment property, and currently has a fully paid off primary resident worth about $1.2m. I understand that primary rates are lower than investment rates, but on the other hand refi rates are higher. So it seems l have a choice between:

    A) Refinance $400k against my primary resident

    B) Apply for a $400k mortgage for the investment property

    At the end of the day in my perspective, it's the same loan amount used for the same purpose, but it seems from the lender perspective (and from a taxation perspective) they are different.

    What would you guys recommend?

    submitted by /u/UnderclockStability
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    Refinance... Can anyone explain this?

    Posted: 15 Jan 2021 09:02 PM PST

    I'm in the process of refinancing my first investment property. Great deal, was able to BRRRR and get all my funds back and still cash flow really well. Everything was going smooth and already started eyeing my next purchase, but need to cash out the funds from my first property.

    Well the refinance got initial approval and I've been jumping through the typical hoops to get approved (self employed so had to send a ton), but.... We Got delayed and now I could lose the 2.8% rate I locked in.

    What causes the delay? My wife disputed a $45 charge on her credit card on a toy she purchased on Amazon. Now the lender wants a letter from the bank showing the transaction is closed, which can take 2 months. So I just cancelled the dispute, but it can still take "a billing cycle " to even get that letter. Is this for real? Can any lenders out there explain what a $45 dispute has to do with anything?

    submitted by /u/obie1cajoby
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    Found open permits at city hall (2013). Inspector noted non permitted renovation work done (had listing pictures printed). What now?

    Posted: 15 Jan 2021 01:18 PM PST

    Hello, This is my first deal, 4 family house in CT. I'm currently in the lawyer review period, which ends next Wednesday. I have a contingency on the seller needing to close open permits. Went down to city hall today and found an open permit from 2013 for electrical code violations saying occupancy could not happen until they had the repairs done. Surprisingly, one of the town inspectors had printed old (2017) and new listings for the house, with all pics, and was circling items that should have had a permit for and were not permitted (new non-structural wall, sheetrock, bathroom and kitchen, HVAC, electrical). The listing also says it was completely renovated 2 years ago (facepalm). Inspector said that this could mean a lien will be put on the house and I'll know about the final resolution on Tuesday.

    My realtor is saying none of this is a big deal and that the open permit is too old, said there is a statute of limitations on it. I asked to delay the lawyer review period to see a resolution before I continue spending money on inspection (already spent on the lawyer for the review of the contract but it was worth every penny). The Realtor said the seller dow does not want to delay anything and that if it does not stop a title search then he does not need to close the permit/get inspections done. To me, the contingency I have for closing open permits means the seller has to at least close the electrical permit, but it wouldn't protect me from unpermitted work. The realtor said the seller can get the inspector to look at only electrical work and say he didn't do any of the "alleged" renovations.

    Realtor: "the seller does not think you want the house". I don't even know what he means by this...

    What would you do? What are the consequences for me if I buy the house and the town comes after me?

    I made a post earlier about issues assessing one of the units prior to inspection and getting copies of the lease. I still haven't seen one of the units nor gotten copies of the leases.

    submitted by /u/Management-Immediate
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    Good First Real Estate Investment?

    Posted: 15 Jan 2021 01:33 PM PST

    My accountant and I -- good friends since high school -- met several times last year to put the groundwork on eventually buying a rental property. We are going 50/50 for initial investment, he gets 52% of profits for dealing with day-to-day, and we have just been waiting on the right property.

    There is a 4,000 square foot duplex listed for $275,000 (NE Ohio, LCOL area). This unit is in my same neighborhood -- probably .2 of a mile from my house (not that I would ever disclose this). Each unit is 2,000 square feet, 3 Beds/2.5 Baths, and somewhat dated but nothing terrible -- just eventually needs new floors and some paint.

    Both units are currently rented. Tenants pay all utilities except trash. The rear tenant pays $950 per month -- she has been there for 11 years and never had her rent raised. The front tenant is new and pays $1,350, but has a pet. The first floor is almost entirely tile that I'd eventually want to cover, so this is not a huge deal.

    So, current cash flow is $2,300 per month. I would plan on raising the rent for the rear tenant by $100 or $200 (plan is to be very gentle/non-confrontational about this). I believe I could obtain this property for $250,000.

    My thoughts -- $200,000 mortgage = $1,020/month mortgage, plus $350 property tax/month, plus trash $30/month. I'm right up the street so I would cut the grass and do the lawn maintenance (minor).

    My realtor believes both units, when fixed up, could eventually be leased for $1,600-1,800 per month.

    So, right now, about $800 cash flow per month. After fixing up, could be $2,000 cash flow per month (so $1,000 or so for me, which would cover my personal mortgage). The plan would be to just keep these tenants, save the money, and fix it up with those proceeds when we get new tenants.

    I view this as a really good opportunity but feel like I'm missing something.

    Thoughts?

    submitted by /u/CoastLawyer2030
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    Are there rules to saying the apartments are Elegant or Luxury?

    Posted: 15 Jan 2021 11:56 AM PST

    I just saw a commercial property in California that has that on a sign. It does not have that feel to it

    submitted by /u/VenturaBoulevard
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    How many bed/bathrooms should I look for in mg first rental property?

    Posted: 15 Jan 2021 11:09 PM PST

    I'm in the Toronto/GTA area in Ontario with a budget of about $350k with 20-25% down. Looking to buy 1-2hrs west of Brampton near some universities or collages. This would be my first rental, I'm 18 and would be getting a cosign from my parents. I've read a lot of the first time buyer posts on this thread but one thing I couldn't find was how many beds/baths I should ideally get for my first rental. Another question would be location specific, what are some good areas in that zone thats west of Brampton to invest in? Mainly in terms of cities that are expecting future economic growth and have a good demand for rental properties. The reason why i'm primarily looking there is because of the lower housing prices along with the amount of educational institutions that could potentially cause housing demand.

    Thanks in advance everyone.

    submitted by /u/BigSathYaDunno
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    Virtual Wholesaling A Vacant Property. How do i get photos?

    Posted: 15 Jan 2021 09:49 PM PST

    I've been getting ready to start wholesaling my one thing that is trumping me is taking photos of a vacant property and showing it to my end buyers. How would i proceed going about this?

    Do i tell the seller. "During the inspection period i will have someone out there to take pictures, do you have a copy of that old key? They will pick it up and put it in a lock box so that not only we can take pictures but also my funding partners will also be looking at the property"

    And if thats how i go about it ^ Do i just hire someone, get them to goto the owners current house to get s key, send money for a lock box , then send money for them to purchase a lock box?

    submitted by /u/the-anonymous-ghost
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    Newbie Friday Deal Analysis

    Posted: 15 Jan 2021 02:19 PM PST

    Which one is better for long-term hold, cashflow, and using equity for future down payments:

    1. 216k sales price, 8k seller contributions, 20% down conventional, Zillow: $278k
    2. 175K sales price, 0k seller contributions, 20% down conventional, Zillow: $202k

    South FL, market rents.

    Make your choice, then scroll down, and post your thoughts BEFORE you saw the final answer. Thanks.

    1. 1
    2. 2
    3. 3
    4. 4
    5. 5
    6. 6
    7. 7
    8. 8
    9. 9
    10. 10

    If I've learned anything so far is that most questions never have enough info to answer them initially, this is also one of those.

    I did the math on both and here are the stats after payment, repairs, vacancies are factored:

    1. Cashflow: $70, $5200 yearly tax bill kills it, yielding 1.64% CoC return
    2. Cashflow: $204, $3720 yearly HOA bill hurts the deal, yielding 5.12% CoC return

    I'm thinking of the following moves and would like your thoughts:

    1. Wholetail it (fix up enough to sells at retail prices and sell with agent 5% fee), I might be able to sell to inner circle without a fee, but I would budget the fee in my math
    2. Buy and hold for cash flow and use its equity for future down payments

    Thanks for reading.

    submitted by /u/ParaDescartar123
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    Can I pay down a portion of principal on my house during a refinance?

    Posted: 15 Jan 2021 02:01 PM PST

    Say my loan balance is $150,000.

    I want to refi to a lower rate, but also want to pay down $20K in principal to the new loan immediately, so that the new loan is at $130K AND at the lower rate, instead of $150K and at the lower rate?

    Basically instead of buying down the rate, I'd like to refi at lower rate + pay down principal and make the 30 year loan amount smaller to lower the monthly payment

    submitted by /u/mustardplug1
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    Asbestos Siding

    Posted: 15 Jan 2021 12:35 PM PST

    Hello everyone !

    I'm in the midst of purchasing my first duplex. After the inspection it has been brought to my attention that the siding for the home contains asbestos. So I have a few questions if anyone could lend me their experience...

    • is it more expensive to replace this siding due to asbestos ?

    • do tenants or buyers tend to keep away from this type of property due to safety concerns ?

    • should I have any other concerns ?

    Thank you for your time !

    submitted by /u/RastaRickk
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    Real estate as a side gig?

    Posted: 15 Jan 2021 02:35 PM PST

    I just turned 22. By April, I will have completed my undergrad degree.

    I'm planning on aggressively saving and investing for the next 8 years while living with my parents, and hopefully by then, we could sell our $1M+ home and buy a much nicer one with the money I've been saving and investing.

    I have a job lined up for April. This will have me making around $50k before taxes for the next two years before I look to move up anywhere else. I really have no expenses. I could save potentially 25-30k of that money depending how much is taken off for taxes I believe so. I also have $30k in my self directed investing account that will be growing as well.

    My parents bought a house under my name. It's currently being built and should be ready by February/March. We plan on renting for now, but eventually I'd like to sell the house and make a profit.

    When I finish school and start working full time, I don't see any reason as to why I should not be pursuing other things. I'm thinking about investing in becoming a real estate agent. I don't want to be a part of a brokerage or anything like that, however if there is a good opportunity I won't oppose it. I don't want to market myself all around town.

    The average real estate license is $7800 I saw on google. Off of selling my house solely, I'd save more than that (since commission is 4-6%).

    Additionally, if I plan to sell my current house Im living in right now in the future, I'd save the commission on that as well. Same goes for a future home I'd like to buy in the future for my parents, myself and a future family if I was to have one.

    I obviously don't know much about the topic but I just see the opportunity as a good one. If I have a home and plan to sell it in the future, I can save on the commission part of the sale by getting my own license.

    What do you guys think?

    submitted by /u/skytrooper77
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    Sell or Hold

    Posted: 15 Jan 2021 12:20 PM PST

    • Situation: Currently own a single family house price and renovations in at about $90k, I have owned the property for about 5 years. The housing market in this area is stable but continues to go up, the value is now approx $200k - $225k. My monthly rent is $1400 with a lease thru Summer 2022. My investment is returning more than the 1% rule, but based on the current value is not.

    Do you base your returns on current market value or your actual investment?

    submitted by /u/upforanother
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    Using a lender that a past realtor recommended

    Posted: 15 Jan 2021 06:11 PM PST

    Basically, I was working with a past realtor but I didn't feel like he was helping me accomplish my goals so I went with another one who was more experienced with flipping/investing/etc which is what I'm trying to do.

    Can I use the lender that the past realtor recommended with my new realtor? I'm trying to get multiple pre approvals to see which one can offer the best rates and etc so I want to see what options I have.

    submitted by /u/Parkin_Wafer
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