Real Estate Investing: First Deal Analysis (BRRRR question) |
- First Deal Analysis (BRRRR question)
- What kind of offers are you putting to close on a 2-4 unit?
- First time investor
- Empty lot in great location... but utility pole guy wire where the driveway would be
- Schedule E - do losses carry over?
- Getting good Tenants / avoiding tenant issues?
- How to find multi-family unit in SF Bay Area
- I need HELP! Refi on 2 houses (one rental) and don't know who to ask questions like this to...
- How does one find property in Mexico? (Specifically Puerto Vallarta)
- Can I Still Qualify for a 3% down mortgage?
- Build to sell - investment opportunity
- Can you shop for HELOCs? Run credits 2-3 times and count it as one like a mortgage?
- (CA) Triggered reassessment scenario question: Change in ownership >50% count if original co-owners transfer to other original co-owners?
- Parcel Assessed Valuation Property Value Question
- Resource for weekly or browsable market reports specific to an area? (Usa)
- First time buyer. Looking at a multifamily home to live and rent out. What type of mortgage should I get?
- Buying a condo - what items to look out for?
- [NYC]- Lien on a investment property but not in my name.
- Starting Real estate with 650k
- Neighbor wants to buy wooded part of my rental property. Ideas?
- Will a lender calculate your $0 property tax eligibility, and therefore offer a larger loan than if you had to pay the average taxes of 7,500 yearly? (Usa)
- Opinion: Stay away from purchasing rental properties on big college campuses
- Trouble with fha appraisers
| First Deal Analysis (BRRRR question) Posted: 06 Mar 2021 07:14 PM PST Hi everyone, I would like to share experiences from my first investment property. I am at the cross roads about refinancing and would like to ask for any input from people on here who have experience with BRRRR method. I want to share all the lessons I learned, so prepare for a long read. A little about myself…I'm in my 20s and have a corporate job in engineering. Just like most of us, I have been working from home since March, 2020. I work in the expensive market and do not want to invest there long term. My family lives in Columbus, Ohio, so I stayed with them for the majority of the quarantine. I have been following Bigger Pockets for ~5 years, reading books, and following numerous forums. For the longest time I would research popular cities on Zillow/Realtor and could never find a deal that made sense. Even "good" deals would barely break the 1% rule. The big "AHA" moment for me was listening to the Real Estate Rookie podcast, where the guest shared his experiences with investing long distance. The lesson that stuck with me was that every popular city (Austin/Nashville/Columbus/New Orleans/Boulder/Seattle…) has institutional investors who pump money into the real estate there. I realized that as a newbie investor, I could not compete with investors with robust systems in place. I realized that smaller cities that fly under the radar of institutional investors are where I needed to look. Therefore, I expanded my search radius to 1 hour drive and found several small cities in Ohio with lots of affordable inventory. I spend a week calling listing real estate agents of the properties I liked and asked questions about the market. Eventually, I found a large 5 unit property for $80,000. The deal was too good to be true (It was). I kept calling the listing real estate agent for several days, until he finally picked up the call. We ended up talking for one and a half hours about the area and other inventory he was listing. I invited him to lunch, as I wanted to learn more about what he does and the area he works in. At lunch, I found out that this guy was not only an agent but also an active investor. He had all the systems set up to flip houses. After lunch, I asked him to show me 4 properties, as I was ready to invest. This was a bit of the leap of faith for me, but I was confident in myself to do the right thing. Location was key for me, since every town has good and bad areas. I picked a duplex right next to the private university, many restaurants/bars, and a large park. The duplex was listed for $94k. I ended up negotiating to $83k. The duplex is 3 bed 1 bath in one unit and 2 bed 1 bath in another unit. Most importantly, this house stayed on the market for over 120 days! I went through a traditional financing as a primary residence to put the least amount of money down possible and spend the rest on rehab. The financing process was very difficult because I was purchasing a property far away from my work location. The appraisal process was delayed. All in all, it took 6 weeks to finalize the financing and I was ready to sign papers. The duplex had 1 side occupied with long term tenants and the other side vacant. The long term tenants were underpaying ($600 for 3 bedrooms) and kept the place in a terrible condition (found mice in their unit). I was lucky that they were month to month, so I gave them a 30 day notice when I acquired the property. Lessoned learned there to always ask for the lease terms of the inherited tenants. I also realized that the person who owned the house did not want to be a landlord and did a poor job taking care of the place, which was a perfect opportunity for me. Once the property was mine, I moved my office desk, blowup mattress, and few dishes into the vacant unit. I wanted to work from there and not waste time driving back and forth from my parent's house, which was 45 minute drive, one way. Looking back, that was a great decision as I learned more about the area and every little detail about the house. All in all, I spent $26k on remodel. I used contractors for 2 brand new furnace/AC units, siding, and gutters. Everything else I did myself, because I wanted to learn what it takes and be able to speak to the contractors in the future. Doing everything myself I learned what "sweat equity" really is. For 8 weeks straight I worked very single day till midnight to finish the property. It was a lot of dirty and difficult work. My hands were literally falling apart. What made the work worth it, was the interest I received in the property when I put it up for rent. I used Zillow property management tool to screen my applicants. In the first 24 hours, I had 18 applicants who paid $25 just to submit application. This was very surprising for me, as I am sure we all are worried about vacancy of the unit before buying. I got lucky that I met the real estate agent/investor who gave me contracts of all reliable contractors and even shared the lease with me he used for his properties. Before both units were finished, they were both rented. The 3 bedroom unit went for $875 and 2 bedroom unit went for $775. My expenses for the property are Mortgage ($475/month), Water ($80/month), Trash ($50/month). Which leaves me with $1,045 for all the contingencies. Considering that the property was initially appraised at $83k, I have been considering to refinance as all the gurus are preaching. However, I like my current cash flow and do not want to reduce it and lavage myself more, if I refinance and pull my down payment out. Also, I do not want my debt to income ration to increase. I have a great job that I can keep working to fund my next deal. Now I am focusing on paying off the $26k I spent on remodel and slowly building up the down payment for my next project. I left A LOT of details out, so if you have any questions, please let me know. [link] [comments] |
| What kind of offers are you putting to close on a 2-4 unit? Posted: 06 Mar 2021 06:15 PM PST For those that have recently closed on multifamily properties. What made your offer strong enough to be accepted? Im currently in Texas and I've been trying to use my Va loan to house hack on a 2-4 unit home. I started off only wanting properties that would cashflow from the jump and later realized that would be tough with this current market. I've put offers almost reaching 20k over asking price and even a higher earnest amount and still no bite after about 20+ offers. I understand lots of cash buyers have been taking over the market and I'm now considering using a conventional loan to see if that will make a difference. [link] [comments] |
| Posted: 06 Mar 2021 08:22 AM PST Newbie here. My partner and I have decided we want to start residential real estate rental business, buying properties and renting out to tenants. We have our LLC created and some properties selected, and now need a loan. Looking for advice on where to start
Thanks! [link] [comments] |
| Empty lot in great location... but utility pole guy wire where the driveway would be Posted: 06 Mar 2021 05:19 PM PST Hey Reddit real estate geniuses, was hoping somebody here would have had a similar experience and could give me some advice. I've got the opportunity to buy and develop an empty lot in a very hot neighborhood of a hot metro at a very fair price. It's zoned for single family and has power/water/sewer in place. Based on comps, building a new SFH on the site should easily lock in a high ROI in a short time. So what's the catch? There's a utility pole guy wire sitting right in the middle of the front of the lot. The plot was originally larger, then recently split in two. At the time the pole was placed it was out of the way. But now, if you built the guy wire would be in the middle of the driveway. Pretty much like this. (For the record the pole is owned by the FPL electric company.) Obviously the situation isn't going to be costless to resolve. But I have no idea, even order of magnitude, how much time and money it will take. Even if it's $25,000 thousand and takes six months, the return should more than cover it. But my concern is that I'd buy, then find out that it's something crazy like half a million and five years to change. Or even that they'd refuse to fix it altogether. (I don't think it should be the case, but you never know when dealing with government bureaucracy.) Anybody who's had any experience with this situation, in particular with FPL, care to share what the process is like? Thanks a ton in advance! [link] [comments] |
| Schedule E - do losses carry over? Posted: 06 Mar 2021 02:02 PM PST Should I try to shoot for 0 taxable income, or is it okay to have negative taxable income because schedule E losses carry over to the next year? Also, do schedule E losses affect W2 income? Thank you. Apologies for the basic questions. Just want to see what you all are doing in this space for maximizing returns. [link] [comments] |
| Getting good Tenants / avoiding tenant issues? Posted: 06 Mar 2021 07:41 AM PST I would love to start real estate investing in SFH and MFH but nervous about dealing with tenants / tenant issues. How did you get thru this issue and get good tenants? [link] [comments] |
| How to find multi-family unit in SF Bay Area Posted: 06 Mar 2021 09:22 PM PST Hello everyone I am sorry if this a novice question but I am new to this. I look to purchase a multi-family home SF Bay area and beside zillow, RIE, and MSL where can find a multi-family unit? I have a spoke to several real estate agents and they don't really have any lead beside what is already posted on the web. Thank in advance. [link] [comments] |
| I need HELP! Refi on 2 houses (one rental) and don't know who to ask questions like this to... Posted: 06 Mar 2021 09:41 AM PST Ok, so My wife and I grew up poor, but somehow have made some good moves and been incredibly lucky over the last 10 years but we're at a point that we aren't sure what the best next step is. We don't have anyone else to really ask about this stuff. We are looking to refinance and take advantage of lower interest rates for the two homes we own. Here's info on our two homes:
We have great credit and were considering paying off the rental fully (cash out) and rolling the $53k into a single refi mortgage. We got approved for 3.125% rates with $5 or $6k down. We thought this was a genius idea until we started considering if we pay off the rental, then all of that money would be considered "profit" and we'd be taxed more on it. Right? We are at a loss. Should we instead pay off our current residence, then refi on the rental property? If so, we'll still have to own it another 5 or 6 years before selling to make it worth it. The issue with this is, that house will soon need a new AC unit and housing prices in that area are exploding lately, so we may consider selling it sooner. We are unsure, so want to make a smart move in the event we sell in a couple of years. We could also refinance each house separately. WHAT WOULD YOU DO? Also, general question. We have an Edward Jones guy... Is this a type of thing he could help us decide? I'm not sure exactly who to look for regarding these types of question. I want someone legally required to put *my* best interests first and I don't know the difference or how to get started with them. Who can I sit down with ALL my finances and lay it out on the table and get advice without getting taken advantage of? My bank? [link] [comments] |
| How does one find property in Mexico? (Specifically Puerto Vallarta) Posted: 06 Mar 2021 09:01 AM PST I recently visited Puerto Vallarta and I love it. I think it's a great place to invest in a vacation home + airbnb pad. The only problem is that I don't really know how to find decent homes. I want to find a single or multi family home but craigslist is rather sparse, zillow is non existent, and all the real estate agencies seem like they're only interested in selling massive upscale resort like homes and condos (I would too if I were them, unfortunately I'm trying to see if I can find a place in a more affordable range of ~200k). Everyone seems to recommend going there and talking to people. So I'm doing my best to learn spanish in order to do so, but it's certainly going to take me a while before I'm proficient enough. So I'm looking for alternatives until then. Anyone know how to best go about this (outside of saying "you really just gotta talk to people")? [link] [comments] |
| Can I Still Qualify for a 3% down mortgage? Posted: 06 Mar 2021 12:29 PM PST If I am part owner of an LLC that owns rental properties, can I still qualify for first time homebuyer mortgages? [link] [comments] |
| Build to sell - investment opportunity Posted: 06 Mar 2021 11:20 AM PST TL;DR - approached to invest in a build to sell project. Anything non-obvious I should be thinking about during my due diligence of this investment? Hi, I recently worked with a builder to get some work done in my house. The builder did a nice job - mainly hardwood floor work. We were chatting one day and he approached me about a potential investment opportunity. His company works with investors who want passive exposure by building and selling new construction. Here is how the opportunity was explained to me: I'd be responsible for the capital, including buying the lot and financing for the construction. He says he has a network of lenders he works with, and I'd need 10% of lot+construction costs up front on a 12 month hard money loan. From there - his company takes care of everything from permits, design, build, to sale through a realtor. At the end of the process, I'd keep 80% of total profits, and he'd keep 20% as his "management fee". He of course makes money on the construction too, but the extra fee is what makes this passive for me. He essentially makes it sound like he comes to me with a deal that he thinks can be profitable based on his experience. I put the money in and 12 months later I get 80% of the profit from it. The numbers that were thrown around on an intro call I had were: 100k land + 200k build, sell for 400k. Subtract ~50k closing and realtor fees. My share of profits would be about 40k, on a 30k investment (10% down). I am not sure how it's possible to make that much profit on a deal like this, so I am trying to figure out my next steps for due diligence. This strategy isn't talked about as much online, so hoping for some input from this community. Market is South Jersey / Philadelphia area. Here's what I plan to ask him for: - 3 prior projects with full financials broken out by lot, drawings, build, realtor, closing costs, etc.) showing net income for his investors - Sample contracts (he claims schedule and cost overruns are on him and built into his contracts - which I thought would be one of the bigger risks here) - Active project site walkthrough and financials overview - Reference calls with some of his current investors (he says there are ~12) Assuming schedule and cost overruns are on him, the main risk I see is the house doesn't sell and I have to flip the hard money loan into a traditional mortgage and make that payment until it sells. I'd be able to bear that or potentially rent it out in the meantime. Anything I am missing here? Does anyone have experience with this they'd like to share? What I've found online is that new builds are often not profitable unless you can GC the project yourself and are actively involved. Let me know if there are any other questions I should be thinking about or asking during this due diligence phase. If things seem like they'd actually make sense, I'll end up working with a CPA and lawyer before making the investment, so this is still early stage. Thanks everyone! [link] [comments] |
| Can you shop for HELOCs? Run credits 2-3 times and count it as one like a mortgage? Posted: 06 Mar 2021 04:09 PM PST I've been chatting with three different banks/credit unions and they have comparable rates but I'm curious about how much their software appraisal will come back with. One bank will loan 90% LTV vs. 80% LTV... so I can't decide between the two lenders. I was thinking of applying for both and seeing the rates they offer at the soft-ware generated appraised value but this will be a hard credit hit, which no one is a fan for. I'll need to confirm how I can cancel without any fees if I apply for multiple HELOCs at a time... (If I cancel a helco before 24 months, I gotta repay the closing costs) Any tips? Thoughts? Should I just stick with one heloc? [link] [comments] |
| Posted: 06 Mar 2021 09:59 PM PST I've been reading through CA laws on legal entity ownership. I know a reassessment of property held by the entity will be triggered if cumulatively more than 50% of original co-owner's interest has been transferred (from BOE site here) This is the example the Property Tax Rules give: Example 8: A and B, hold equal interests as tenants in common in Greenacre, a parcel of real property. A and B transfer Greenacre to Corporation Y and in exchange A and B each receive 50 percent of the corporate stock. No change in ownership pursuant to Section 62(a)(2). Pursuant to Section 64(d), A and B become original coowners. A transfers 30 percent of Corporation Y's stock to C (A's child), and B then transfers 25 percent of Corporation Y's stock to D (B's grandchild). Change in ownership of Greenacre upon B's transfer to D. Parent/child and grandparent/grandchild exclusions are not applicable to transfers of interests in legal entities. What I can't figure out from the examples given is does it still count as 50% cumulative transfer if the % interest is being given to another original co owner rather than a "new owner"? Specifically: 10 people have equal interest in an LLC that acquires a property. All 10 people become original co-owners at 10% stake. One year later, Person #1 buys out Person #8, Person #9, and Person #10, so now P#1 owns 40%. Ten years later Person #2 then buys out Person #5, Person #6, and Person #7, so now P#2 also owns 40%. Now the LLC owners are Person #1: 40%, Person #2: 40%, Person #3: 10%, Person #4: 10%. Technically, 60% of the original co-owners transferred their stake (Persons #5, 6, 7, 8, 9, 10) but only to other original co-owners not "new owners". Would this instance still trigger a reassessment of the property? No original co-owner has transferred more than 50% of their interest to a new owner and no single original co-owner has more than 50% stake in the LLC. Thanks for the insight! [link] [comments] |
| Parcel Assessed Valuation Property Value Question Posted: 06 Mar 2021 03:18 PM PST Hello I recently purchased a multiunit property (duplex) that was newly built in 2020. I recently got a mail from the County's assessor that my property value is worth 155K, and 10% assessed value is like 15.5K or something like that. Can anyone explain what this means and what the purpose of it is ? Is it beneficial to have a higher value? I bought it at around 285K and the appraisal was 285K as well. Should I dispute the value to make it higher, or leave it as is ? Also, tax wise and depreciation wise, what value is used for depreciation on tax returns ? Is it this value here, so it might be beneficial to appeal and get the real market value set on here ? Thank you [link] [comments] |
| Resource for weekly or browsable market reports specific to an area? (Usa) Posted: 06 Mar 2021 02:33 PM PST I'm getting weekly basic market reports from my agent i bought my current home with. Its just average list price, average days on market, quantity of new listings per week, quantity of sold listings per week. Its particular to 1.5 miles from my address but i'd like to find a resource i can sign up for to get weekly averages like this, or alerts on sale prices of every home sold in a particular county, etc as i get closer and closer to buying a 2nd property start my REI journey. Anything easier or aggregated more than my current method of literally looking up every new property for sale and viewing its taxes and previous sales prices. Super time consuming and harder to build a bigger picture of "what are average prices in this county? Are the home prices going up rapidly? How quickly do homes sell?" Don't mind paying a little if its not extortion. A weekly email or app is great! Specifically Lake County IL but i'm pretty any resource i'm referencing can be used anywhere. Edit: As an aside, what is the easiest way to tell if an area's home are selling over market price? Same thing as i wrotr above, currently i'm looking at listings asking price and after it sells and updates i'm just manually going back to the listing to see what it sold for. I watched my neighbors house closely for example as we have similar homes, they listed for 290k a few months ago and in 3 days the sign out front said pending. Only today however, i realized they sold for 312. [link] [comments] |
| Posted: 06 Mar 2021 03:51 PM PST I am planning on going back to university next year. My plan is to buy a 3 unit multifamily property that I can live in and rent out while going to school. I am looking at homes in the 100k-120k price range. I have enough saved up for a downpayment of 20% closing costs, plus 10k emergency funds. My question is what type of mortgage should I be thinking of? Conventional? FHA? 30 year or 15 year if its conventional? My credit is "good" a little higher then 650. My plan is to use this property to help supplement my income while I'm in school. So I plan on treating this rental as my part time job while in school. [link] [comments] |
| Buying a condo - what items to look out for? Posted: 06 Mar 2021 01:27 PM PST I am new to real estate, and was looking around for a condo. Wanted to see what items to watch out for? I am looking at HOA fees, age of the building, elevator / no elevator but are there any other issues I must check for? Do I need to ask for electric vs gas heating, anything else that might be important from a living perspective or when i think of selling? [link] [comments] |
| [NYC]- Lien on a investment property but not in my name. Posted: 06 Mar 2021 02:09 PM PST In NYC, they have an online system where you can check your property records. I was on there to get a copy of my title and I saw there was a Lien that was filed for someone with a totally different name back in 2015. It has the same address as my property but it has it listed as a single family home whereas my property is a 3 family. The lien was for about 10k. It was filed in the US Attorney's Office for the Middle District of Pennsylvania. What do I do about this? [link] [comments] |
| Starting Real estate with 650k Posted: 06 Mar 2021 05:18 PM PST Hello all, Right off the bat , I'm not looking for any investment opportunities or partners. That aside, I recently came into a 650k inheritance and am looking to jumpstart my property investing goals. I have 2 years experience with Airbnb rentals company manager, we would purchase a property, do tear down and value add, and rent on Airbnb. Occupancy was we had done about 40 units when I parted with the company to start my own goals, as I felt I had gained enough experience to do so. My goal was to finish nursing school to get an income of 60-80k, so I would qualify for FHA loans on multifamily via FHA. My credit score is 700. My income for 2019-2020 was aprrox 50k, but this year I will make less than 20k for the next 2 years, as I go all out in finishing my schooling. My fiance makes 35k a year. I own one townhome paid in full, valued at 350-400k. Currently renting it for $2200 a month. I plan to fully manage and renovate any properties with my own crew to minimize expenses. Worst case scenario I will tuck the funds away until I finish college and my income qualifies me. However I an highly motivated to do a short term rental oriented multi family purchase now, while the occupancy rates are high and Covid seems to be coming to an end. Thank you all. [link] [comments] |
| Neighbor wants to buy wooded part of my rental property. Ideas? Posted: 06 Mar 2021 12:43 PM PST Hey all! I have a SFH, and my tenant informed me today that one of the connecting neighbors wants to buy part of my property for some reason. The land is currently wooded and unused. I'm going to inquire about what they want to do with it (it's not a whole lot of land. 1/4 acre total, can't imagine the wooded part is more than 1500 sq ft), but has anyone else been approached like this? What did you do? If it matters, the lot is fairly typical 150' frontage and the rest just goes straight back in a rectangle-ish thing. [link] [comments] |
| Posted: 06 Mar 2021 03:31 PM PST Tl;dr is in the title. My next property is going to be a househack type of investment because i can get a sweet VA loan if i'm occupying. It will be in IL where property tax is a huge 2%, but, i will qualify for $0 yearly homestead tax exemption. Pure fire because homes i'm looking at in my prequal range of $250k have yearly taxes between 6000 and 8000 or as high as ~650/mo. So i wanted to know, if they're figuring that 650 as part of my maximum monthly payment for mortgage? And I qualify for $0 taxes, so would a lender calculate that and offer a larger loan? Specifically as an example, i prequal for $250k at the moment but thats not 'including' my potentially $0 taxes - so would i be able to get a letter from the tax office stating my eligibility and a lender will say "okay sure you can have a $300-350k loan"? Because the way i see it, as a borrower i'm looked at as someone who can 'afford' the mortgage of ~1,650 monthly, but i will end up actually paying more like 1,000 monthly. Or maybe i'm way off base and lenders don't even look at your state/county property tax averages at all? [link] [comments] |
| Opinion: Stay away from purchasing rental properties on big college campuses Posted: 06 Mar 2021 08:11 PM PST Recently, I've come to the conclusion that rental properties on big college campuses are not worth purchasing for this singular reason: Apartment complexes like these. There seems to countless giant real estate developers moving into the large college campus market in the last 5 years. These apartments that they build are luxury. They come with security guards, security cameras, a free gym, a pool, hot tubs in their living rooms, giant home theaters, you name it. College students these days can The luxury won't stop there, mind you. Businesses are moving in to provide all sorts of new luxury amenities to these complexes. I've seen stuff like concierge service (literally planning their spring breaks for them), complimentary transportation services, etc. Meanwhile, as I go through my calculations to check out potential single family homes or duplexes to rent out to these college students, I'm seeing previous rents in that same range, and I don't see a way to make it work for much cheaper. What college student is going to pick some dingy house or some subpar 8-plex built in the 70s over a brand new luxury resort built last year? For students who prefer to live alone, a lot of these resorts are single bed. I am only talking about larger college campuses ( >30k enrolled), not small college campuses; I haven't seen many of these giant real estate developers moving into those markets (for now). Am I onto something? Am I pointing out something completely obvious? Am I off my rocker? Anyone have experience in these markets? P.S. I am no expert. This is all subjective opinion and observations. [link] [comments] |
| Posted: 06 Mar 2021 07:31 AM PST Are many of you guys restricting sales to cash and/or conventional financing due to fha appraiser being a massive pain in the rear? They are killing me with paper cuts out in the Midwest. I just had a closing extended due to some missing mesh window screens. [link] [comments] |
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