All Forum Posts by: Deyano M.

kitchens and baths are where buyers look. Adding a bath will most definitely add value. Especially when there previously was only one- add another and your investment is in a whole new category- it will attract new buyers that only are looking for homes with 2 or more baths etc.

The best bet is to think as you would if you were buying the home to live in- what would you want with the space given...

true, but very minimally. Appraisers do not use emotion as a buyer would and only certain permanent upgrades will count: granite, permanent lighting. Any track lighting or ceiling fans- stuff like that usually will not sway an appraiser...

appraisals and comps are very rough estimates. Although comps have an actual exchange of money to back them up...

From my understanding and very recent interaction with an appraiser for a large national lender- Appraisals are just comparing apples to apples: sq. footage, property specs- baths/beds, basic features.

So- I'm going to actually disagree slightly and say that appraisals can also be on the lower end of what you'll see with comps. And if you're talking about taxing offices, then the appraisals would come in on the higher end most likely as that would benefit the city or town.

Comps tend to be much more realistic as to what is going on in the market currently. In the case that my Mother's neighbor sold their very similar home for a certain amount, you get an idea of what actually sells- not a speculation of the value based on statistics.

With that said, comps can be emotion driven as buyers can fall in love and must have a property- potentially driving the price higher.

I usually look at the appraisal and comps and come to a range and estimate on my own.

I'd be interested to hear from those who have actually done what I am describing......

Good to know...

I had asked the loan officer many specific questions (in a subtle manner) about paying off early and she gave no indication or even the slightest inquiry into my reasoning. That leads me to believe she doesn't have anything at stake, but I could be wrong...

She even went so far as to look into ARMs that would benefit early repayment.

Hi Ben-

Thank you for the detailed information. We are working directly with 2 large national banks- not individual mortgage brokers at this point. Would that same situation apply to what you are describing- eventually they would treat us as dealers requiring commercial loans?

We aren't incorporated, so there wouldn't be any symptoms of a business beyond the quick turnover of the loans. We are looking to flip 2-3 homes/year at first. It is safe to say, in 2007 we'll flip 2 homes.

Is this something they would look at by volume or immediately raise a red flag when we flip the first home?

I follow the market in my area very closely and have seen home sales dropping steadily, but not drastically- people are still buying! And I have also seen average sold home prices increasing steadily from last year- not as huge of a percentage as in recent years, but still increasing.

I think alot of regular home owners list their home too high and have seen it start to sit on the market. New construction developers have also been hit hard because their shiny cookie-cutter homes have been overpriced for a long while and this is the first time in a few years that they aren't selling. Buyers are definitely shopping around more now, so that increases risk for investors like me. With that said, I still see nice homes with favorable pricing sell pretty quick. The area I invest in has seen alot of economic growth and new jobs, so there are definitely alot of buyers still.

I think alot of pessimists think that the market has busted and that means there are suddenly no buyers and no sales- NOT TRUE! It's just about being smart and not getting greedy!

Even with the slowdown, house are still selling. The average home sale in my area of investing is around $255K- up from $240K last year. If you put a quality product on the market, it will sell- even with picky buyers and a slower market. As my realtor tells me, "people still need a place to live".

If anything, I have seen a major slowdown with new construction developers. Rehabbing is unique because it takes what already exists and transforms it into a new option on the market.

Good luck!

Hi Bonnie,

I am not as experienced as some of the people on here, but I'll give a response based on my situation.

Alot depends on your location/region of the country as far as trends. The area I am investing in is an area by the water with alot of big developer money going into the community. Despite the market, it is a hot area no matter what. That said, it is still leaning towards a buyers market. So I can also make out well on buying my rehab property, but must be conservative when pricing it as buyers are more picky. Even with that said, it is easy for people to get mortgages these days- there are so many loan products and the job market is very strong. What does that equal? People buy houses!

We are rehabbing and flipping, so this is still a possibility, but you must be smart. I suggest allocating alot of time to budgeting and coming up with a strict timeline and a team that will help you get to your goal.

Good luck!

Current: No prepayment penalties on a 2nd home mortgage through two lenders we have spoken to at length.

Scenario: If we successfully flip 2-3 months after closing- pay the loan off completely and contact the same lender again for the same or similar loan for another property (to flip), how will they react? As far as I can tell, there is no policy against doing that.

I'm not going to come out and tell the bank the loan is to invest in real estate for a flip project. I asked the rep I spoke to specifically- are there any penalties for repaying early- she said no...

I welcome any advice or experience from all...