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Depends on where you are in the country.With the current market slowing down and lenders getting cold feet (that'll kill a market), you have to get creative to sell property now.So, lenders are tightening lending rules. That means fewer can buy. That means more have to rent (or buy on terms / lease option / owner financing). This increased demand in rentals will drive rental rates (and demand for rentals in general) up.
Run the numbers between what you want to do and getting a Equity product behind your current first. You have a very good fixed rate that I would try to keep rather than pay closing costs on re-fi to pull money out. Like I said before, a mortgage broker is less likely to give you this option because they do not like messing with (or some do not do at all) Equity Loans or Lines of Credit. Like I said, run the numbers but here are a few thoughts....1) Do you really want to lose that 4.85% fixed rate and pay closing costs to have an interest only option payment on the whole amount? An Equity Line of Credit will give you an interest only option on the balance of what you are using for the rental property. 2) Do you really want to raise your rate on 150K first to get a lower rate on 90K and pay closing costs? An equity could keep your first as is, meet your needs that you want with the rental, and with no closing costs (usually- depends on lender of course) 3) What are your plans at the end of the 5 year? Are you selling both your primary and rental properties and paying that off or do you plan on re-fi then or do you plan on rolling the dice on the interest rate fluctuation? I would find it odd if you were planning on selling both properties within five years so I am assuming you are going to re-fi at the 5 years. Which means more closing costs and possibly a higher rate (remember, even current rates are historically LOW) Not saying either way is better or worst but I do think you want to revisit your plans and make sure what you are doing is actually best for you.My current rate is 4.85%, 15 year loan, which is about $1,634 a month, including tax and insurance. I'm only doing the loan to increase my monthly cash flow, cash out for the purchase of a couple of properties, and liquidity. The interest only mortgage is THE way to finance rental real estate property, that I understand, I'm just trying to figure out how much risk I want to take on, while I'm just getting my feet wet. I have a six month nest egg for emergencies, etc, etc.What is your original rate on your mortgage? There is plenty of times that even though an equity rate may be higher it does not make sense to pay for closing costs and potentially increase your rate on the balance of your current 1st. Typically mortgage brokers do not deal in Equities unless they are doing an 80/20 purchase etc and hence it is not an option they will bring up- they want the bigger 1st mortgage re-fi. Just something to bring up that since you did not address it in your post. It could very well be that doing the re-fi will make sense but you want to make sure you look at all your options.Self servingbump
You looking all the way to Asheville? I've heard good things about Asheville, but I wouldn't know personally.I'm actually warming to Mobile Home Parks in that area.
I'm about to put my 4 unit on the market at about 7.5% here in Maryland.
All depends on where you are.Californians would kill for 5% last I heard.
Somehow I knew a "vacation home in the Carolinas" post would be covered quickly here. 
Breathe.Two houses correct? One will give you what you need (10K for the new kitchen) in August - but really, is that the best move?Go to Home Depot or a contractor and get a budget / estimate to do the kitchen. Work out a payment plan to get that done. Don't refi the house for 10K - you'll lose $ on the refi. You don't necessarily have to wait 12 months anymore to refi by the way, and the reason I just contradicted myself is I see an interest only (I/O) loan. Those are going belly up fast anymore, so I know why Countrywide contacted you. You may want to consider that option through them as it is (A) cheaper and (B) can get you in a fixed rate.As for the kitchen - finance it another way. Credit card would be cheaper (if you paid it in a year or two) - seriously. You'd need discipline if you did that, but you'd be richer than a full blown refi.Talk to Countrywide, tell them what you want, they likely will listen. They'll re-appraise and may waive all costs to move you to a fixed rate (which benefits them).Now, the second house. He wants it, you want him to buy it. Is this correct?Contact a real estate attorney and tell them that you want to give him the full rights to the property in exchange for your equity. Likely you'll deed the property over to him (quit claim) and the attorney will either ask them to pay you a lump sum (which they don't have) - or you can take it as a second mortgage and they will make payments to you.I'd take the 2nd and make it as short as possible. They basically would owe you 10K, so take a 10K note and have them give you $500 a month for 24 months and you're done. If that's too much, work out an 8-10% note for 3-4 years. (10% should be attainable as you're in a higher risk position with a 2nd mortgage) - but at least you have $ coming to you and the property is theirs.The benefits to them are HUGE - no refi, loan stays in place, and you get paid.Now, if the original loan is in your name, talk to the attorney about getting you off of that and protecting your credit.Good luck.
Asheville is too pricey for my tastes. I don't like chasing the crowds, prefer to be the guy trying to set the market. I guess I sucked at musical chairs as a kid.
This doesn't make any sense.How is it not on the market but an agent is involved?
I don't see how you have any bargaining power until the market sets the demand. Basically the only way you make out now is if they don't know what they have.
Maybe one option here but it''s not much. Offered to buy both at a discount. Offer the agent comission on the one you want and agree to list the second with the same agent if they take no commission on the second deal when you buy it. Basically you get a nice discount, the orginal seller gets out immediately, the agent gets one commission immediately and the second down the road. You get the property you want cheaper and the the second cheap enough that you can move it immediately at a push.
Jeff...HoCo yearly tax sale goes this Thursday, May 24...10AM @Geo Howard BldgIf I would get one of these properties, how do I collect the 18% we speak of here?
You have to bid on the tax certificates, and that bid is usually>>> than the property value. The bid, IIRC, is what you'd have to pay if / when you bought the property. Since most go over Fair Market Value (FMV) it is really stupid bidding. I think there's now a cap in place (people used to bid like billions on one house - one guy bid a googol - seriously) to stop stupid bids, but they still happen.Jeff...HoCo yearly tax sale goes this Thursday, May 24...10AM @Geo Howard BldgIf I would get one of these properties, how do I collect the 18% we speak of here?
From the auction web site:
"The successful bidder will earn interest at a rate of 18%/yr from the day of the tax sale until the property is redeemed"
This implies the owner, who could not meet the tax burden in a timely fashion, now has to pony up the back taxes, interest of 18%, any new taxes due, plus accumulated fees... "If the property is redeemed after 4 months of the sale, bidder may charge legal fees and expences to the property owner"
Seems to me there would be a decent number of folks not able to pull this off, given the current market
Like Jeff said, depends on the area. Here in the Mecca, you can almost expect that you will own the property in question after a year. There is always a strong chance. The Tax sales here are unlike anything else I have researched out there. I actually thought everywhere worked like the Fort before I heard one of the Tax lein guys speak at one of the Trump Expo weekends. I would much prefer the good rate of return over the property.
I believe it is completely appropriate for ProNinja to post this here, and would invite him to do it more often. This is not an endorsement from FBGs.com. It is based on the fact that PN has been posting in this thread for what seems like years nowproninja said:
and provides valuable information regularly. This very same thought would carry out to others who can help professionally that have been contributing to this thread forever now. I will personally delete any promotions posted in this thread where we haven't seen you before, you don't provide insight, help, etc. Jeff is free to set policy if that conflicts with his thoughts.Might not be fair, but that's the way it is, and I'm comfortable with that. None of this post represents FBGs.com in any way.PN, thank you for your post. It gets people thinking and asking questions. If nothing else, it helps people know how to talk to their local Mortgage person.
What does that mean in layman's terms?proninja said:
totally agree. ninja is good peoples and knows the mortgage game inside out. It's great having a resource aboard who can actually let us know what he could do in real $ terms so that folks can compare his rates to what they can get locally. I've learned quite a bit from the regulars in this thread. Keep up the great work fellas.I believe it is completely appropriate for ProNinja to post this here, and would invite him to do it more often. This is not an endorsement from FBGs.com. It is based on the fact that PN has been posting in this thread for what seems like years nowproninja said:and provides valuable information regularly. This very same thought would carry out to others who can help professionally that have been contributing to this thread forever now. I will personally delete any promotions posted in this thread where we haven't seen you before, you don't provide insight, help, etc. Jeff is free to set policy if that conflicts with his thoughts.Might not be fair, but that's the way it is, and I'm comfortable with that. None of this post represents FBGs.com in any way.PN, thank you for your post. It gets people thinking and asking questions. If nothing else, it helps people know how to talk to their local Mortgage person.
:REthreadlurker:
If your looking at these hybred neg am ARM's get all the facts from the loan officer. With my dealings in the mortgage industry I have seen my share of horror stories with these neg am's. First off the loans usually have 3 payment types first option is the super low rate such as let's say 3.99%, second option is the interest only payment and third option is the fully amortized such as a 30 year payment. Now the kicker is the interest only payment is what this program is geared for, so if you elect to make that super low payment option then the difference betwen that payment and the interest only payment heads to your principle balance. So let's say for example the difference in the two payments is $500 and you elect the low payment option over 24 months you will owe 12k more or let's say on a 200K loan amount it now becomes a 212k balance after the 24 months. I have had a number of people trying to refinance from these but were unable due to the prepayment and owing more the the appraised value. While these Hybred Arm's are ok in some situations, most consumers are never warned about these things from the loan officers thus a problem. Not to step on this posters toes, but just giving my 2 cents. Most important thing anyone buying or refinancing is to get educated and get more then one estimate. HTHI believe it is completely appropriate for ProNinja to post this here, and would invite him to do it more often. This is not an endorsement from FBGs.com. It is based on the fact that PN has been posting in this thread for what seems like years nowproninja said:
Might not be fair, but that's the way it is, and I'm comfortable with that. None of this post represents FBGs.com in any way.
PN, thank you for your post. It gets people thinking and asking questions. If nothing else, it helps people know how to talk to their local Mortgage person.
Both sound like reasonable plans.I'd still get a go-between for the rent / phone calls though as a new LL. (Even as an experienced one, I don't want the phone calls).wow, 2500 posts and when I search for "Kentucky" I get nothing.
Sounds like a Land Contract.
Sorry, but the term is "cloud". It was a "clouded title".
All depends on the deal structure.This could be "rent to own", or a "land contract", or a "wrap" (a new mortgage which pays an underlying mortgage), or "owner financing". All depends.Deal structure is VERY important. VERY.Where is this property, by the way?
Total investment was 100,190.83. Actual cash invested was 13,517.02. Everything else was on credit. In the next year our goal is to do two houses. How does the private lending thing work?
Other than that, good post.
As for making $17,500 in a year - well, how much money did you invest??
Private lending may be a better alternative for that level of return (and less stressful).
It's Cloud, your Title was "Cloudy"Most Excellent! $17.5K anyway you can get it, certainly when someone else does all the heavy lifting, is fantastic! Do that 10 times a year, and quit the day job.
10 would be awesome, we're going for two in the next 12 months.It's Cloud, your Title was "Cloudy"Most Excellent! $17.5K anyway you can get it, certainly when someone else does all the heavy lifting, is fantastic! Do that 10 times a year, and quit the day job.
Just for a starting point you could look at the advanced search on realtor.com.http://homes.realtor.com/options/advanceds...?ml=3&typ=7
Private lending is when / where you agree (legally, all documented) to loan either a business or an investor money for a defined price and timeframe.For example, an investor may be happy with 10% interest if he doesn't have to do anything but write a check. The investor wins by having access to funds to use to put together deals.The lender wins by getting his money to work for him with no hassle.This is how many Hard Money Lenders (HMLs) get started.Are there risks? Sure. You have to trust the person(s)/business you're investing in and make sure that you are covered legally for your money. But believe me, investors with private money access get a lot more deals done that way, and getting $10k on $100k without ever having to do any real work is a nice feeling.Each case is specific, and I don't want to speak in particulars (STAFF DISCLAIMER - post 1), but if you want to know more just email me and I can fill you in.Random said:
JaxBill said:
I'd also post in Craigslist as a "houses wanted" spot.
Closing on three Properties this month in June. Scouting another 5 tomorrow. Seriously, RE is a Disease.Random said:10 would be awesome, we're going for two in the next 12 months.Mike Anderson said:It's Cloud, your Title was "Cloudy"Most Excellent! $17.5K anyway you can get it, certainly when someone else does all the heavy lifting, is fantastic! Do that 10 times a year, and quit the day job.
I typed out a big response to this, and just lost it to the computer gods. I'm exhausted and going to sleep. I'll be back to this question.What anyone who might answer this question is going to need to know is this:What's your Game plan? If it is buy $300K houses and rent them for $1,200 a month, then no, it won't be easy.Your Market will dictate what you can do. As an example, it would not be possible to do Volume flipping in my Market. One would not do well just buying and flipping here. I don't know Philly. I know that the guy that wrote one of the greatest RE books EVAH! operated out of Philly. ( "The Section 8 Bible" ) I wouldn't have operated in the Markets he did, but he made a FORTUNE in Philly. I don't do SUCKTION 8, but the ideas you can pull out of that book work everywhere. I am a better LL for reading it.Where you want to locate/operate in your market will dictate what you can do. You can't rent in high end areas very successfully. Low end areas are wastes for flipping, however, Gentrification is the RE investors very best friend. Be ahead of the curve.Coupled with the question above, what do you want to do? Flipping, Renting, Mortgage fraud, whatever.stevegamer said:Mike
Seriously though, what's your game plan? Every area in the country has lower end rentals, higher end rentals, repos, rehabs, various areas of any city perform differently. If you will provide more thoughts on your game plan, a number of RE professionals in this thread would most likely answer.Every RE professional out there at least a few times a month hears the comment "I want to make money in RE, how do I start" If you are going to do this, you need to give some thought to the game plan so better advice can be given.Random is my Favorite of the "Newer" RE guys as he has laid out his battle plan at almost every new step of the way as he thinks it should run, and asks for comments. It's easy to help someone like that, they give you something to work with.Outside of that, you seem well positioned. I would advise that you go and secure as much standing untouched credit as you can before you leave steady employment. That was one of my Mistakes. I should have gone after every lending intuition I could for available funds while I had a Job. Even a Shyster like HSBC or whatever it is that charges 20% interest. You don't have to use it, it can sit there for the time if you are ever desperate. I should have built up a few Signature (Unsecured) $15K lines of credit while I could have. I learned this lesson the hard way.
HMLs <> Private Lenders Mike.
but I only had 12-13k of my own money invested. I paid almost 9% on the rest of it.
Well that's different......I thought you had $100K of your own $ in the deal.Random said:but I only had 12-13k of my own money invested. I paid almost 9% on the rest of it.
