All Forum Posts by: Adam Moyer

Hi Nick, I'm looking at selling my rental duplex and wanted to see strategies to avoid paying capital gains taxes. I used to live one side of the duplex for a majority of 2015 and 2016, then moved and have been renting each side out since.

Would that scenario qualify as the two years out of five living in a property as a primary residence and not needing to pay capital gains?

All,

As of April 1st, I would have bought my first investment property!  i purchased a duplex and will be living in one side and renting out the other. My question is, what kind of repair team do I need to make sure I have a list of people to call if things break that I'm unable to fix?  I was thinking the following:

-Plumber (24 hour one)

-General Handyman

I'm sure there's a lot more that I should have on my to call list.  What advince can you all provide about what I need and how best to figure out which ones to go with?

All,

I'd like some advice as I'm deciding between 2 lenders.  Purchasing a $250k owner occupied duplex, 15% down, offer accepted today.  I have two lenders that have offered some good rates, but this will be my first purchase and I'm new to what closing costs are typical.  Below are the offers:

Option A

3.875 interest rate

Closing Costs:  Total $1076 net closing costs  (could you tell me if they are missing anything?)

-Appraisal Fee $540

-Credit Report $24

Tax Service Fee $53

Flood Zone Determin. Fee $9

Processing Fee: $420

Settlement Agents Fee $200

Lenders Title Insurance Premium and Endosements $250

Recording Charges: $60

Discount from work: $500

Net closing costs $1076

Option B

3.6 rate, but with 1.25% in points

Origination fee                  $475.00

Appraisal                             $450.00 or 600 depending on the property.  450 if normal built house inland or 600 if unusual property or on the water

Credit Rpt                            $21.00

Tax Service Fee                 $56.00

Flood Determination      $10.50

Est. Closing Fee                 $300.00 ** (see below)

Est. Title Fee                      $325.00 ** (see below)

Est. Owners Title              $850.00 **** (see below)

Recording Fee                  $60.00 

                                                $3,087.50

You will also have 1.25% in points. 1.00% because this is a duplex and 0.25% because of credit score/LTV (Loan To Value = loan amount vs purchase price)

The way this works is you take your loan amount x points and that equals a dollar amount, this then get’s added on top of your closing costs and you keep the low rate you lock in at.  212,500 x 1.25% = $2,656.25

If you don’t want/cannot pay that fee, you can roll some or all of it into the rate.  If you locked the rate right now on a 30 year, it would be 3.60% the rate increase for 1.25% in points is 0.35%.  So your new rate would be 3.95% and the $2,656.25 would go away.

Please remember my application fee, any earnest money you added to the offer and if you are getting any credit’s from seller would go towards the fee’s above.

** different title companies have different fee’s so these could be a little different, but close

**** this is a fee that is paid by the seller, however on a GFE we must disclose it to you in the state of WI

Which do you think is the better deal?

sounds good, I'll keep looking!  Any suggestions for lenders to look for (credit unions or other ones)?

My wife and I want our first home that we purchase to be a duplex. We are looking for that so that we can rent one side out and therefore have a very low mortgage payment. Eventually we will purchase another property and rent both sides out. We were going to do this and put in an offer this week, but we ran into a financing snag.

The duplex will sell for $250k and is exactly where we'd want for location, and it is updated. We have a $25k down payment and we're going to finance the rest. Unfortunately, according to several mortgage companies, a15% down payment is required for traditional financing (MI companies would not insure owner occupied duplexes with less than a 15% down payment). That leaves FHA financing. I wanted to see what you all thought of the deal.

Cost: $250k Down Payment $25k

Interest rate: 3.75% (30 year fixed), 5.239% apr (includes fha funding fee of $3938)

Monthly Payment: $1766 ($1060 PI, $70 HI, $394 taxes, $241 pmi)

Rent: $1200 (currently rented, tenets are great and probably will stay)

Net monthly out-of-pocket: $566

We aren't too fond of the high pmi, or the additional fha fees, but doing a higher down payment is not really an option at the moment.  I was thinking that we would not find to many other properties this nice where our out-of-pocket would be so little.

Long term we would rent out both sides and have monthly cash flow of $634.

What do you all think of this deal?

Thanks, I'll run the numbers once I figure the all out.

Great, thanks!

I am looking at purchasing my first duplex and was in the process of getting pre-approved for a loan.  It is listed for $250k, and I was planning on putting 10% down on it.

In getting pre-approved, a potential (reputable) lender told me "The Secondary Fixed Rate requirements as well as Fannie Mae’s requirements are that Owner Occupied Duplex’s require 15% down so I had to pre approve you that way."

I am new at this, would this be unique to this specific lender or would every lender require a 15% down payment instead of a 10% down payment?

In case anyone was wondering we ran some numbers and determined that it was worth everyone's time after repairs. However, another investor beat us to it about 6 hours before our meeting. Would have been my first property under contract, but at least it confirms that I would have been correct in moving forward with the property. It was sold to a fix-and-flip guy for $35k.

I appreciate the quick replies. Thanks!