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All Forum Posts by: Andrew Freed

Andrew Freed has started 61 posts and replied 1230 times.

Post: Worcester Simplified REI Meetup

Andrew Freed
Agent
Pro Member
Posted
  • Investor
  • Worcester, MA
  • Posts 1,266
  • Votes 1,387

Awesome, looking forward to it! 

Post: What are closing closing cost?

Andrew Freed
Agent
Pro Member
Posted
  • Investor
  • Worcester, MA
  • Posts 1,266
  • Votes 1,387

Both the seller and buyer pay for closing costs, but they are different depending each side. For instance, buyers normally have to pay for origination fees from the lender, insurance, appraisal, attorney/title fees etc. Seller's also have to pay an attorney/title company to close, complete a smoke cert, recording costs etc. Normally closing costs amount to 1-2% of the purchase price for each side. One strategy I like to do is build in seller credits into my offers so the loan covers the closing costs, e.g. if you wanted to offer $500K for a property, offer $510K with $10K towards closing costs and that $10K is supported by the loan and can be used on the costs I mentioned above. I hope this helps! 

Post: buyer wants to go straight to escrow

Andrew Freed
Agent
Pro Member
Posted
  • Investor
  • Worcester, MA
  • Posts 1,266
  • Votes 1,387

@Lesley Stoll - Agreed, if you are doing a 1031, the only downside is the timeframe. You want as much time as possible to find the property you are transition the funds into. If you can extend it while you look for your replacement property, that is preferred. More or less, the buyer just wants to move quickly to close which is really all it means. 

Post: Would like to get into wholesaling

Andrew Freed
Agent
Pro Member
Posted
  • Investor
  • Worcester, MA
  • Posts 1,266
  • Votes 1,387

@Jonathan Greene - I appreciate the introduction. @Robert Adams is actually one of my tenants. He is doing a STR arbitrage in one of my 3 beds. Small world.

Post: Tenant Screening question

Andrew Freed
Agent
Pro Member
Posted
  • Investor
  • Worcester, MA
  • Posts 1,266
  • Votes 1,387

@Gabe N. - I usually like to see that gross income is 3x the rent, no prior evictions, 650+ credit. Additionally, you can always ask for a bank statement showing that they have decent reserves. If they have $20K in the bank, that would offer additional reassurances of their financial stability. Lastly, prior landlord references is key, you want to chat with the last two or three landlords, not just the last one since they are incentivized to get rid of bad tenants. I hope this helps! 

Post: How to reward a good GC?

Andrew Freed
Agent
Pro Member
Posted
  • Investor
  • Worcester, MA
  • Posts 1,266
  • Votes 1,387

@Lionel Quiambao - Are you able to cover some of the balance while waiting for draws. I'm assuming this is a FHA 203k which is known for being administratively burdonsome. Not saying this is right, however I've known other investors who pay the draw to the GC while HUD processes the paperwork which takes a very long time. Paying contractors quickly is instrumental to them being on your side. Delayed payments to contractors will only sour the relationship. Many contractors are not good at budgeting hence need quick and timely payments. Nothing will ruin a relationship with a contractor quicker than untimely payments.

Post: Appraisal came back with 10% different SQFT than listing

Andrew Freed
Agent
Pro Member
Posted
  • Investor
  • Worcester, MA
  • Posts 1,266
  • Votes 1,387

@Account Closed - You can fight the appraisal and indicate that the appraisal has a material error and should be revised. I've fought appraisals on this front, the appraiser misclassifying the number of bedrooms in each unit, the square footage, etc. You can always push back on appraisals, which is always smart in my mind. I've successful overturned most appraisals that I pushed back on. Work with your lender on going back to the appraiser, noting material defects with the report, and also pushing back on the comparables that they used. Preferably the one or two properties with the lowest values so you can increase the overall average for the value of the property. I hope this helps! 

Post: Rentals and new builds

Andrew Freed
Agent
Pro Member
Posted
  • Investor
  • Worcester, MA
  • Posts 1,266
  • Votes 1,387

That is awesome, I am also a local investor in Massachusetts. I host one of the largest real estate meetups in Worcester MA. If you're looking for more connections, I would highly recommend attending some local real estate meetups in the cape cod area. I meet some of my most influential connections at these meetups including fellow investors, mentors, lenders, contractors etc. I would definitely start there and make it a goal to attend 1 to 2 meetups a week. 

If you have any MA questions, always feel free to reach out. Best of luck on building your portfolio! 

Post: High Yielding STR w/ Tons of Equity and Tons of Renos/Repairs - KEEP OR SELL?

Andrew Freed
Agent
Pro Member
Posted
  • Investor
  • Worcester, MA
  • Posts 1,266
  • Votes 1,387

@Courtney Mercier - That's amazing, congrats on your success! What is your return of equity? How much profit (and this is true profit, not gross revenue) do you receive each year vs. the equity your have in the opportunity? If your return of equity is below a 5%, I say redeploy the money into an asset that can provide you 8+ % cash on cash returns. It's all about putting your money to the best use possible. Nonetheless, if your return of equity is much higher, I say keep the cash flowing asset. 

P.S. You can always complete a line of credit or cash out refinance and repurpose that equity while keeping the asset (all tax free money). That is always an option as well. Personally,  I hate selling unless I am 1031ing beacause who likes paying taxes? Am I right lol. 

Post: Refinancing Investment Properties

Andrew Freed
Agent
Pro Member
Posted
  • Investor
  • Worcester, MA
  • Posts 1,266
  • Votes 1,387

@Amanda Ferguson - Your interest rates are not normal. I would find local credit unions or small banks, essentially portfolio lenders who hold the loans in house. They offer super competitive commercial products, which I'm seeing landing around a 6.5 - 7.5% interest rate. For commercial, you can also negotiate the amortization schedule (the longer the better), interest rate, pre payment penalty etc. I think you can easily refinance these properties with commercial debt that meets your neds. Given that you've owned them for almost 5 years, there is also a good opportunity to do a cash out refinance and obtain tax free money that you can use to expand your portfolio even further.