Real Estate Investing: Monthly Motivation Thread: February 21, 2021 |
- Monthly Motivation Thread: February 21, 2021
- Tenant taking advantage of the COVID moratorium in California
- Overpaying for a fourplex, but it still cashflows +12%
- Selling house to buy multiple condos
- Section 8?
- New town new strategy?
- Should I put 5% down in a primary and then put 20% down on a rental?
- Investment property in Neighborhood Industrial District
- Last minute tips to maximize appraisal for cash out refinance of duplex?
- Primary Residence to Rental
- Could my city be shaking-down condo developers for fees on an impossible site?
- Pro-rate for a week with no water? (TX)
- Kind of messed up-CA
- Advice on raising capital for a real estate development project
- Mortgage to be serviced by different company
- Next door neighbor passed. Looking to buy property. Probate court then....what?
- Anyone built multifamily?
- Operating or Non Operating Entity?
- Question about mortgage insurance deduction for home that became rental in 2020
- What is a 4/3 style apartment?
- Refinancing Options
- Class B SFH's in DFW TX - Hold, Cash Out and Wait, or 1031?
- Using Leverage from a low income.
| Monthly Motivation Thread: February 21, 2021 Posted: 21 Feb 2021 12:00 AM PST Monthly Motivation ThreadWelcome 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:
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. [link] [comments] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Tenant taking advantage of the COVID moratorium in California Posted: 20 Feb 2021 10:32 AM PST So, my friend has a tenant in a condo that has taken advantage of the moratorium. Initially when COVID began, my friend panicked like many and allowed a tenant to stay at a much cheaper price than she should through AirBnb. She had an agreement to leave in a month so someone else could come in who was going to school and would be there longer term. Well, she won't move and claims she has a disability and thus can't move because of COVID. We have no idea what this disability is. She has only been paying 25% of her rent so my friend has basically been paying for this woman to live there since the beginning of the pandemic. She won't do cash for keys. My friend now wants to sell the condo but this woman won't allow for physical viewings. She had a 60 day notice done by a lawyer but now that the new moratorium has been signed it looks like my friend is stuck with her until June. My friend doesn't want to do mortgage forbearance because she wants to buy a home eventually and worries about it showing up on her credit. Is there anything she can do to ease the stress of this situation? Any help or advice would be appreciated. We're stumped. [link] [comments] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Overpaying for a fourplex, but it still cashflows +12% Posted: 20 Feb 2021 01:45 PM PST I'm currently contemplating a counteroffer on an off-market fourplex that will be $50k (or 8%) over market prices for the area. The reason I'm even considering this counteroffer is (1) there is limited inventory in the area, (2) I have an opportunity to use an FHA loan, and (3) the property generates 12% cash-on-cash returns (not including a property management fee). I should also add that I am currently renting and plan on owner-occupying this fourplex. If I were to hold this property long-term, do you think it would be wise to pursue this opportunity? Since this is an off-market deal, I can use an FHA loan and reduce my initial cash contribution; however, the appraisal gap may be significant. Curious to hear your thoughts! [link] [comments] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Selling house to buy multiple condos Posted: 20 Feb 2021 02:08 PM PST Hi there! My parents are thinking of selling our house to buy multiple condos in the city for my and my siblings and for themselves. Any thoughts on this? Note our house is located in the suburbs outside of Toronto and we would buy condos downtown. Thank you! [link] [comments] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Posted: 20 Feb 2021 11:01 AM PST I'm curious what all y'all's thoughts are on taking Section 8. I'd especially love to hear from those who do. I have only ever met a few Section 8 landlords, and they have said that they love it, and they get better renters through the program because the people who are on Section 8 know they can lose their voucher if they misbehave. But only hearing from 2 or 3 such landlords does not equal evidence. It's just antidotal. I'd love to hear from more. [link] [comments] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Posted: 20 Feb 2021 08:12 PM PST Hi strangers, My wife and I have a small real estate portfolio we built while in the military by using my VA loan and house hacking properties. We are DIYers so it makes sense to buy a house that meets the bare minimum requirements for VA and then we just upgrade it and move on in about a year. This method has been very successful for us thus far however we want to change it up a bit. So anyways, we just found out my next orders should send us back to our home town and I believe this town is ripe for investment. For example I have friends in the area who have stated the town has a "housing crisis" due to lack of rental properties. The town has been on a steady growth curve since my childhood and there's no reason I know of that it will stop. Our potential investment strategies are: 1) House hack like we've been doing (sweat equity/same old boring shit) 2) Buy residential land lots in town to sell in 2+years (no work just taxes) 3) Buy a residential land lot and build a duplex now and another later (duplex=no fire suppression system) 4) Buy commercial acreage to develop storage units or lease out 5) Buy timberland acreage outside of town for the wood and lease as hunting land Wondering what you all think about moving into new towns and breaking out of old strategies and into new ones. We currently have 3 properties that cashflow $145, $195, and $165/month. When we move we'll have a fourth property cash flowing about $100 and we'll be stashing 1k/month for vacancies and repairs. Here is the thumb rule I like to use for houses I have already hacked. Cash flow = MktRent - (Mortgage + 0.3 x Fair Rent) or Mortgage = 0.7 x MktRent - Desired Cash Flow 0.3 = 10% for management + 10% for vacancy + 10% for repair fund How can this simple equation be changed for some of the other strategies? [link] [comments] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Should I put 5% down in a primary and then put 20% down on a rental? Posted: 20 Feb 2021 12:29 PM PST I am in the process of buying my duplex family home from my parents for about 200k in Alberta Canada. This will be a private sale but it will have to be purchased at market price cause of taxes. I was going to put 20% down at first on a 30 yr mortgage. But now I'm thinking of entering the rental property market and instead put 5% down on my family home and purchase a rental worth about 200k with the remaining money plus a bit more, so about 50k of my cash in total. I have the 50k available to do this and another 90k in the stock market where if I had to access it I could. My job could pay both mortgages if I had to. Does this sound like a good plan? Is there a better way to do this with a line of credit or something? Any recommendations? Thank you. [link] [comments] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Investment property in Neighborhood Industrial District Posted: 20 Feb 2021 10:03 PM PST I am currently in the process of purchasing a 3 unit property in an NDI (Neighborhood Industrial District). 2 units are residential and one unit is sorta commerical. It is an 800sqr ft space that was used as a Dog Laundry about 5 years ago and hasn't been used since. The property is not on the market currently. The agreement with the seller at first was seller financing, now he proposes to give me a 10k credit if we finance with a bank. My mortgage broker suggested that I finance the building as residential with a 10k construction loan. The commercial space would be a claimed as an attached garage. Which is what the space essentially is except it doesn't have a garage door. The loan can cover the cost of the garage door, but the zoning is still NDI. This raises some issues, getting a permit with the city for the garage door. If the space is commercial the permits are going to be expensive and I run the risk of the bank not giving me a residential loan. I am curious how intense the bank will be about claiming this attached garage/storage space as a residential if we tell them it will just be storage for the residential space. If we do need a garage door the permits are a whole issue. The house next door is residential but in the same zone. Then two buildings down is a warehouse which is also in the same zone. If anyone has any suggestions on how to approach this situation it would be much appreciated. For the price and location of this space I know it will be picked up immediately by the major real estate investors in the area if it goes on the market so I want to figure this out quickly. [link] [comments] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Last minute tips to maximize appraisal for cash out refinance of duplex? Posted: 20 Feb 2021 09:00 PM PST Appraiser is coming out a duplex that I've owned for 5 years, to do a cash out REFI. I Just replaced the roof, because I'd been needing to do that anyways. what else should I be doing to make a good impression to maximize appraisal? I was thinking of adding fresh mulch to the front to increase curb appeal. And also telling my 1 tenant to remove the window AC unit from the front of the house. She is not bright and insists on using a window AC unit even though the central HVAC works. Should I definitely add small landscaping improvements, and make my tenant remove the window unit... or does this not really matter? the duplex is in a nice B+ neighborhood. [link] [comments] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Posted: 20 Feb 2021 07:35 PM PST If I decide to turn my current primary residence into a rental property, should I need to notify my lender? How much does the monthly payment and property taxes increase for an investment property vs primary residence? Should I refinance to save money and profit more and then rent it out or how does all of this work? [link] [comments] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Could my city be shaking-down condo developers for fees on an impossible site? Posted: 20 Feb 2021 06:21 PM PST I'm not educated in anything in having to do with real estate, so I'm coming to this sub for some educated opinion... There is this really crummy piece of land in my city. It's tiny, waterlogged, impossible parking demands, the city is trying to force a mixed use retail that will never be successful, etc. So far one other condo developers has dropped out, before going to the council vote. My city is a tiny white flight bedroom suburb. I think they're in financial trouble but they're trying to hide it. A very inexperienced condo developer tried again with a plan and designed that was again impossible and sure to fail. It failed by a majority and has the nextdoor echo chamber hot. I don't know a lot about permits and liscences. Here's my conspiracy theory: my city is pumping/shaking down multifamily developers for the fees on the early phases of the planning for the property knowing nothing will ever get built. Has anyone ever heard of something like this happening? [link] [comments] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Pro-rate for a week with no water? (TX) Posted: 20 Feb 2021 05:52 PM PST My sister and her family is living with us coz her luxury apt complex has no water. Actually, there are 4 bldgs in her complex, but pipes bursted in 2 bldgs (hers and another one) and they had to shut water supply. The other 2 bldgs thawed out and have water again since yesterday. So current residents of the two bldgs (with no water), would bring buckets to the other two bldgs to get water. So much for "luxury." Property manager said plumbers wont be here till Monday (at the earliest). Not a promise, but a hope that plumbers can make it (and fix it) on monday. Mother nature, I get it. But the thing is, the fact that she pays almost $2k for her luxury apt. In TX, that's a lot of money. And the thing that sucks for her is, she chose apt living because she didnt want to deal with any headaches that come with home ownership. If anything happens, she just calls the prop mngr and wait for maint to come by. Well, that's the idea I guess... until a freak snowstorm came by. So there goes her idea of headache-free apt living. I guess what bums her the most, is she feels like she's is not getting her money's worth for this month. She's paying $2k this month's rent for luxury comfort, and she's not getting it. She understands that it's not the apt complex's fault, but it's also not her fault either. So is there anything that can be done here? Edit: The apt has a fulltime plumber, but nowhere to be found. Maybe he got snowed in, or maybe he's busy fixing pipes on his own house lol. [link] [comments] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Posted: 20 Feb 2021 11:32 AM PST So my real estate agent sucks really bad, and we went under contract for no contingencies for a house in California we are buying. The agent gave comparables saying it would be around $500k, but I don't want to pursue it anymore and don't think that's true. I personally want to back out. We haven't paid the $10k earnest deposit money yet, its due this Wednesday. Is it safe to get out? This is in California. [link] [comments] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Advice on raising capital for a real estate development project Posted: 20 Feb 2021 05:28 PM PST Looking for guidance/advice on how to raise capital for a real estate development project. Details below: High level details
2021 Details
Go Forward details:
Not looking for the final answer here just would love guidance on how best to manage this. I have meetings scheduled with banks but not sure they are doing to love the debt-equity ratio. Finishing up an investor package now and I am set up to present that to a couple different angel investor networks. Should we be focused on raising capital thru equity at this point or is there a chance to obtain debt from banks? Any pointers would be so greatly appreciated. Thanks!! [link] [comments] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Mortgage to be serviced by different company Posted: 20 Feb 2021 01:38 PM PST I was looking over a loan estimate, and noticed a box checked that after closing my loan will be serviced by a different company. The mortgage consultant can't tell me who the 3rd party will be. Is this a red flag or totally normal? Edit:. Thanks all! [link] [comments] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Next door neighbor passed. Looking to buy property. Probate court then....what? Posted: 20 Feb 2021 03:54 PM PST The owner of the home (multi fam) next to mine passed suddenly at the beginning of the year. He unfortunately didn't have a will, so it looks like it has gone to probate. From what I can gather, he owned a few properties and they all had considerable debt. I've found on the county probate court website what seems to be the lender's name (at least for one of the properties...). I imagine the lender will assume ownership of the property after probate rules. Is it possible to connect with the bank that will (or now) have ownership and purchase the property before hits auction, REO sale, etc? I want to be respectful of the process, and of the situation, but the neighborhood is transitional and I believe I'd be a good steward for the property. Property is in Ohio. Thanks for any help. [link] [comments] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Posted: 20 Feb 2021 03:52 PM PST I am interested in building a multifamily infill building. Zoning permits up to 4 6-family units on this particular property (4 parcels.) I am thinking it will likely cost about 130/sqft to build. Vinyl wrap, nothing fancy but decent interiors. If You have: What was the cost per sqft? Any unexpected expenses? Biggest hurdle? Any advice? [link] [comments] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Operating or Non Operating Entity? Posted: 20 Feb 2021 02:57 PM PST If I'm a normal investor with a few properties, where rent is the primary source of income, am I considered a Non-Operating Entity? Did some Google searching but couldn't find a straight answer. Thanks in advance! [link] [comments] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Question about mortgage insurance deduction for home that became rental in 2020 Posted: 20 Feb 2021 02:53 PM PST Hi everyone, new here :) I have a bit of a complicated tax question and I didn't have much luck in the tax sub, so hoping to get some help here if possible! Details:
Question:
Source of Confusion:
[link] [comments] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| What is a 4/3 style apartment? Posted: 20 Feb 2021 01:11 PM PST A friend of mine is selling a 4/3 two story apartment? I'm pretty new to all this and couldn't find anything on google. Can someone tell me what this meansv [link] [comments] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Posted: 20 Feb 2021 01:08 PM PST I have a rental property that is currently rented, albeit at a neutral to negative cash flow. It was my former primary residence so I have a decent amount of equity and in it. I am looking at refinancing my current primary residence due to lower rates and a decent amount of equity. My main question is should I take cash out and fully pay-off my rental? I asked my CPA and they were somewhat ambiguous about the impact on my taxes. They seem to think they can find ways to offset with my current mortgage interest rates. I was hoping my Financial Advisor would have weighed in but I haven't heard anything from them yet. I have decided against refinancing both properties and will either refi my primary and cash out to payoff the investment property, or only refi my primary and look at getting a HELOC on the rental. Anyone have experiences that they can share? [link] [comments] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Class B SFH's in DFW TX - Hold, Cash Out and Wait, or 1031? Posted: 20 Feb 2021 11:39 AM PST Hi everyone, I have a 5 class B rentals SFH's in DFW, TX which I purchased 10 years ago as new construction with the original thesis to cashflow my way to retirement. Since then, values have significantly increased, which has caused property taxes (assessed at ~3% annually at FMV) to eat into that cashflow. And if it matters, I'm married in my mid-40s with no kids yet ("yet" is a key point lol). I've seen mention of forecasts about property values potentially increasing for the foreseeable future, and cap rates being squeezed virtually anywhere nationwide nowadays. Despite the potential for increasing value, I'm not sure if it makes sense to keep holding if cashflow completely vanishes if repairs & maintenance, and property tax, keep increasing. But I'm also open to flipping my thesis from cashflow to asset appreciation if it makes sense financially at the end of the day. In any case, I'm very grateful for the upside in equity in my rental SFH's but torn about what I should be doing next. I'm including some figures below which may not be precise but are ballpark: - Cap rate is based on the original purchase price - RoR is rate of return on the down payment. - "Net after Fees" is what's left after paying broker commission if I decide to sell. - "Net after Fees & Tax" are what I'll pocket if I sold and didn't 1031. Regarding rents, they're what the market commands without incurring more turnover and longer vacancies, so there's little room to increase them. I also have a PM who I've cross-shopped with competitors over the years and they're about as good as it gets. What are some suggestions on what I should do? The only ideas I have are: - To 1031 the proceeds into a larger portfolio performing 4-6% cap that's typical nowadays. - To cash out, take the cap gains hit, and then sit on the sidelines to buy back in once cap rates improve (if it ever does in my lifetime lol). Meanwhile I could also deploy some of the capital in other ways, such as index funds or perhaps small business ideas if I come across any. And if 1031 is the overwhelming suggestion, how does timing come into play? 2 properties are vacant at the moment (but no thanks to the recent storms, could've been leased out at any moment), but the others have leases with varying end dates. Would the least stressful approach be to 1031 the sale of each SFH individually? I'm trying to unpack other scenarios including trying to consolidate proceeds from all the SFH's to buy a fewer, more expensive MF buildings (with more doors hopefully). What are some gotcha's to this? I'd be grateful for any advice because I'm struggling on what to do. Couple of friends have said to 1031, while others have said to cash out. Thank you for taking the time to read this! Edit -Thanks /u/l3erny/ for the table tip. Here's some data I pulled from my spreadsheet:
[link] [comments] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Using Leverage from a low income. Posted: 20 Feb 2021 04:14 AM PST So I watch all the meetkevin and Graham Stephan videos, and i was wondering is it possible to be at the level of I am coming from a low income? I make 45k a year. [link] [comments] |
| You are subscribed to email updates from Real Estate Investing. To stop receiving these emails, you may unsubscribe now. | Email delivery powered by Google |
| Google, 1600 Amphitheatre Parkway, Mountain View, CA 94043, United States | |
No comments:
Post a Comment