Where can I get creditable information about my house?

Question

Hello BP fam,

With a growing family, my wife and I need a bigger place to live. Before my kids were born and before my wife and I were married, she (her name is the only name on the deed) and I bought a house with a FHA loan through Wells Fargo.

I'm as new as can be to the RE world but would like to start making the right moves going forward as REI. Being in my early 30's I would like to start educating myself and learning how to become a successful REI and starting with my own property seems like the best place to start.

Based off the details below, what are my options and where should I go to start getting adequate information to take full advantage of my current home situation, considering the circumstances at hand? Should I move out and rent it out or flip or refinance? Help please!

Thank you BP!

Details:

Location: Tulare, Ca (Central Valley in CA)

Single family home

3 beds (Loft/4th bedroom optional), 2.5 baths, 2 car garage, 2,400 sqft

Lot: 8,282 sqft

built in 2008 (model home)

we purchased late 2008 from builder/owner

brand new schools K-12th in walking distance

Finance details:

Wells Fargo lender - FHA Loan

purchased for $225,506, Fixed rate 4.25% 30 yr

monthly mortgage $1605. (insurance included)

Zillow.com listed house for $257K

JDee Moore · Answer

@Ottie Mendez I'm getting some feedback that some mortgages will not let me do a lease-option on my house. Where would I find out if so or not? From my lender? In my FHA loan agreement documents? Lastly without spending too much money, how would I find potential buyers who would like or agree on a lease-option? Wouldn't it be like finding a needle in a haystack? I'm ok with that, I just would like to scale the task at hand before diving in.

JDee Moore · Answer

@Elizabeth C. great and will do, thanks!

Ottie Mendez · Answer

Any local Realtor will give you a CMA that will show a probable value of your home in today's market. Many investors that want to hold onto the property will do a lease-option with someone who cannot get a loan at the present time. These programs ask for $3,900 down and 20% to 30% per month above the average rent. The lease-option contract spells out that the property is being maintained by the person leasing. The option period can be two years on up. Many times the person leasing do not exercise their option and end up leaving. The $3,900 is non-refundable. So this program is somewhat better than renting out the home as the person that is "purchasing" generally keeps the home in better repair.

Elizabeth Colegrove · Answer

jerry,I am at work so I cannot connect you to the exact article. If you go to www.reluctantlandlord.net go to all blogs article at the top. You will find it under there. Let me know if you have trouble finding them. There are about 10-15 on those 2 subject alone. I am working on a free ebook all about self-management. If you interested in being notified of the launch then I recommend you sign up for the free newsletter.

JDee Moore · Answer

@Elizabeth C. can you send me a link to your blog post about rentals and self-management, please. Thank you!

JDee Moore · Answer

@Elizabeth C. Thank you for that information and yes BP is a great platform to connect RE investors locally and abroad. I love that I can connect with BP members, especially those who understands my geographical areas. Long story short, I need to know my options pertaining to my current primary place of residence. My goal is to move out of my current place within no more then 2-3 years from now, but at the same time not get too anxious and make a bad decision financially and can't recover.Yes, I am willing to self-manage. Yes, I would need the equity for my next primary place of residence. How do I find out how much equity I have in my current house?@Ottie Mendez thank you, really appreciate the feedback. Would love to here what options, you believe would be the most beneficial to my current situation.

Elizabeth Colegrove · Answer

@Jerry Moore It is nice to meet another central Valley investor. I invest in Hanford/Lemoore area. I would NOT do a lease option as you don't own the house mortgage free. Most mortgages do not allow you to do a lease option so you would be voiding your lease. We have done very well renting our houses out once we are transferred. The question is what will you have rent for. How much did you put down on the house. Do you need the equity out of the house to buy your next house? Are you willing to self manage? While our houses do not had huge margins, or meet the 1%, 2%, or 50% rules. By keeping our personal properties and turning them into rentals when we have been transferred. It has given us additional baskets for our retirement. We plan on retiring from the military on our pension and cash flow. Personally as our model is buy and hold. I would keep the house. You have a great rate, house values will go up in this area. It is newer so you shouldn't have alot of maintenance and you can get into the real estate world without a 20% require downpayment. My blog is all about self-management and creating an investment model out personal turned rentals with pure rentals too. Also zillow is NOT accurate.

Ottie Mendez · Answer

You have a great rate so hang on to that. Maybe a lease option would be a way to go. I live in Tulare and could help you with that. I am an investor.

JDee Moore · Answer

@Jean, Thank you and yes a CMA is what I need to look into next. Is refinancing something I should wait to do? Is refinancing a good or bad idea if I'm going to rent out vs. sell?Thanks again.JM

Jean Bolger · Answer

Don't trust Zillow estimates, they are notoriously bad. To make any decision you need a realistic market value for the current house. You should talk to a few real estate agents and get them to do a CMA (comparable property analysis) for you -- they look at recent solds in your neighborhood and make adjustments for size, age, amenities and use the info to come up with a fair evaluation of what your house would sell for in the current market. They shouldn't charge for this, they'll do it to encourage you to list your house for sale with them if you do decide to sell. You also need to get an idea of what houses are renting for in your area. You can call a property management company or you can just go on craigslist and look at what is currently for rent and at what price.Then you'll have some solid info to make a decision