All Forum Posts by: Adam Anderson

Although an increase in rate will slightly decrease the affordability of homes and reduce the potential cash flow of levered investment properties it will be positive for the overall economy and especially the banks.  If the banks can earn a greater spread on their assets they will be able to loosen their lending standards which would be positive for home prices.

There is no talk of rates rising buy 1% in the short term but .25% is highly likely.  This increase of .25% on the short term rates will likely push up mortgage rates but it doesn't necessarily mean mortgage rates will be .25% higher the next day.  Most mortgage rates are more heavily influenced by their own market forces rather than the Federal Funds Rate.  Generally a good indication of mortgage rates is the 10 Year Treasury rate.  Most of the time when stocks go down cash flees into Treasuries diving bond prices up and yields  down.  That's why its usually a good time to lock a mortgage rate in when stock are selling off. 

At the end of the day the anticipated .25% rise in the Fed Funds Rate probably wont be detrimental to real estate but a 1% hike probably would be.

I've been struggling with this myself.  I think a card is a definite for the holidays but I'm considering including a small gift card to a local cafe or restaurant 

Personally, I would sell it while you can get the tax free gain.  I had in a similar situation with my first home that I quickly out grew.  I had the opportunity to sell it but rented it instead even though it had hardly any cash flow....didn't know much better at the time. The market turned south and now its under water.  I was able to refi and it now has a little better cash flow but its still years away from a break even.

Interesting, Im surprised to see it that high!

Hi Christopher,

Id be interested in hearing about what you are offering and your terms. I'm using a hard money lender now for a flip in Northern NJ and they are lending 90% of the purchase, 100% of improvements up to 70% ARV.

Adam

Hunter,

I think filing for bankruptcy in your situation would be like killing ants with a nuke!  you can easily pay off the amount of debt you have with 1-2 flips or by dedicating a few hundred bucks a  month for a few years after you start working again.

Adam

Thanks for all your input on this! I might have my title person run the search for me so I know its clean but use their agent for the insurance and closing.  Anyone see an issue with that approach?

I'm buying my first true foreclosure and the bank is offering to pay all the title fees if I use their title company.  I already confirmed with the town that the Taxes and Utilities are paid in full and there are no code or building violations.  In NJ its customary to close with an attorney but I don't see a need for one since we are not negotiating anything. I do want to make sure there is clean title and the contact states that only title issues discovered prior to closing will be remedied by the seller.

Should I use my own title company at my expence or is title insurance the same through anyone?

what a great post!  Congratulations on your success! I got my first taste of real estate investing in student housing at FSU (still have 1) and loved it!  If I was near a decent school ID defiantly be in that game. It was not only profitable but also fun. Do you get parental garontors on the leases?  What kind of net income are these properties generating?

Adam

 Jack, sounds like a viable strategy, how long have you been at it? I'm sure you'll get better with every call!

Adam