All Forum Posts by: Account Closed

You should be able to get a no closing cost loan in the 3.3-3.5% range. 30 year fixed. Roughly on a 100K house, each point in interest is worth $1000/year. So a 2 point total drop should save you abut $2000/year in interest. The more important question is how long have you had the loan? If you are in the first 5 years or so, no brainer go and refi. If you are in the last 10 years , you probably dont want to reset to another 30 year term.

Depends how old the units are. As a buy and hold investor I look for newer AC and furnaces because along with the roof they are the largest potential deferred expense down the road. I look for at least 5 year life on furnace, water heater and AC unit.

@kevin yoo

Actually its the opposite. You want to be a net borrower in inflationary environments. That way you pay back your principal in cheaper dollars. In a deflationary environment you save now and spend later because things are getting cheaper.

This whole inflation/deflation debate is puzzling. Theoretically increasing money supply at the rate the Fed is doing should be inflationary. I think it is , but the inflation is in bubble assets like the stock market. The money is circulating amongst banks and brokers but little is getting out into the real world. Therefore unemployment is high, wages are low, and demand for goods is not increasing. If and when the money hits the street, we should see inflation. However if the 1% keep all of the stimulus as it is now happening, inflation is held at bay. I think thats the game the criminal bankers and wall street are playing with full support of the government they bought and paid for. Okay, I'll get off the lecture podium now...:-)

I am closing some loans now and havent filed taxes yet. Lender still wanted W2 for income. So cant get away if you had low income.

I dont invest in the Bay Area for the rental homes. My rentals typically have 11-14% cap rates.

You live in Santa Cruz and with property prices in the Bay Area, you will never see much better than 5% Cap rates. Cash on Cash can be lower than cap rate when you are paying down a large loan depending on interest rates and principal repayments. As a stand alone rental this is not a good deal. However, if you want to buy a home in the area primarily to live in and can get renters to help pay the mortgage, then its a good way to do it.

Depends where you live. If you live in a place where you can get good deals, go for that first. I live in a very expensive part of the country so no choice but to go out of state. The other thing to consider is what your objectives are. If you are just going to buy 1 or 2 properties, its hard to do out of state. The key to out of state investing is to have a great team to support you. It takes time and effort to develop that team and once they are in place you can leverage them over multiple properties. ]

Some would say good deals are to be found everywhere if you look hard enough. Maybe thats true but I dont have that kind of time. If you do, then maybe local may work for you as well.

Curtis N.

Having funds to invest is great. It puts you ahead of 90% of the folks starting out. But you could just as well deploy your 160K over 5-10 smaller properties that would be easy to finance, easier to exit from and spread your risk (diversify). Just a thought. Unless the $160K represents a very small fraction of your liquid net worth (like 10%), its still risky to put it all in a single asset.

As a first time investor this seems like a risky proposition. You seem to have no experience with commercial real estate, you are buying an out of state property and you did not know typical lending terms. Why not look at simple duplex to 4-plex type properties which are lower risk, easier to finance and a better starting point for a beginner?

Welcome to a fellow Bay Area investor.