All Forum Posts by: Andrew Freed

Hey BP. Any good tales about successful post inspection negotiations? How much did you save? Did you get a deal? Heck, I'm even interested in post inspection fails, which I sure have my fair share of. 

@Ryan Copeland I ran into this situation with my last house hack. I was offered a 0.5 % lower rate via a FHA loan from another lender early in the process. The previous lender I worked with was providing support for months so I did not want to ditch him without giving him an opportunity to match. I presented my original lender with the quote from the new lender and they matched the offer at no cost. If this lender has been great to work with and has provided excellent service, I would at least give them the opportunity to match the rate. Just make sure you provide the detailed quote so you are comparing "apples to apples".

@Joe Lijoi Before investing any money long distance, please make sure to read David Greene's "Long Distance Investing" book. He has had a long career of success in this realm so I would take his advice before you put your hard earned money into a deal. The knowledge in that book is guaranteed to save you thousands in mistakes avoided.

Also, if you are interested in turnkey providers, I have heard great things about RenttoRetirement. I am sure @Zach Lemaster can elaborate. Best of luck! 

@Justin Kwan Everyone here makes solid points, but one of the really cool benefits of a LLC is that you can open up business accounts with some of the large suppliers and get HUGE discounts. For instance, I pay about 40% compared to the cost of retail shipping for UPS. I also am able to leverage Pro accounts from Lowes and Home Depot. Lastly, I can open up business credit cards which increase my access to capital if I need it. I get it, LLC's are a lot of work and do not make sense sometimes, but there are some really cool perks too if you're creative enough.

I would ensure that the purchase and sale agreement indicates that the property must be clear of the previous owner and broom swept clean prior to closing. Also, this is why it is always important to do background research on the seller. If they have shown to make questionable decisions in the past, you may want to make the terms more strict to reduce your risk. 

@Paul Garcia - I have seen laundry rooms in the basement as well but from my experience, those tend to be lower tier units that rent for below market value. It might be worth it though if the machines are coin operated and you can create another stream of revenue. 

@Howard Gorman - This is a tough scenario. Given the issues caused by COVID, I can empathize. I too own a condo in an expensive market (Boston) and my rents have decreased significantly since COVID. I thankfully am still cash flowing but dropped my rents by 20% to get a good tenant. Have you considered renting it out via an Airbnb? There are tons of property managers these days that specialize in this strategy. Even with higher management fees, it could totally be worth it since it'll be mostly hands off and cash flow higher than a traditional rental. I would explore this option to see if you can have this property cash flow while you ride out the COVID effect. I am sure once everyone is vaccinated and things go back to normal, these expensive markets will appreciate once more. 

@Justin Hoggatt - Super great points. You seem like you've done your fair share of big deals. Congrats on your success!

@Tom Horn - Apologies if my advice was not too clear. I meant use the HELOC for the downpayment on a traditional fixed rate loan and refinance out of that amount if you are not comfortable paying a variable rate. I personally used a HELOC as the downpayment on two investment property (one @ 5% and the other @ 25%) and got the rest covered via a traditional loan. I also did not pay for any of the purchase in cash so I would have very good reserves in case anything unexpected happened. I would recommend that you talk to a few more loan officers and have a clear understanding of DTI before moving forward. The HELOC is a great tool but it does add to your DTI calculation hence reducing your loan capabilities. You may want to watch a few youtube videos on DTI and how loan officers determine eligibility so you have clear understanding of the implications.

@Tom Horn As long as you have the equity and the desire to find the right loan officer, this is absolutely possible. I am not sure if I would get the HELOC and the refinance from the same organization though. At the end of the day, it is your equity. You can use it as you like if you are creative enough and don't take the first no you hear at face value.

@Tom Horn I personally like the HELOC option. It is truly challenging to get a home under contract these days so having the funds still in your home while you look for a property is better than having it sit in your bank account as cash via a refinance. Honestly, you don't want to be rushed into a bad purchase as a result of your cash just losing value. It should be more of a calculated purchase, which sometimes takes patience. If you are concerned about the variable interest rate, you could always refinance the balance from the HELOC onto your primary residence at a fixed rate once things are settled. The fantastic thing about a HELOC is you have access to a large amount of capital in seconds, no questions asked, but do not have to access it unless you want to.