All Forum Posts by: Steve Smithy

I found out some more information, since this is new there are conflicting opinions as to what happens.

This negatively affects your credit score, because it shows up as a modified loan, as if you weren't making full payments! One person I read about claimed it brought down their credit score 150 points! I think I'll pass!

Has anyone done a refinance with the Home Affordable program by Fannie/Freddie?
http://www.makinghomeaffordable.gov

I was going to refinance my home, and found out about this program. I thought it was only for people with low credit scores or something, but apparently I might qualify! Basically if you have a 2nd mortgage (so that you don't have to have PMI) and you refinance, they exempt you from PMI! In my case its $300+/mo savings! My only concern is how this might affect me later for a mortgage for a investment property or vacation home or something.

I also wanted to ask, does anyone know of a good lender that lets you put down less than 20% for a 2nd home? I found a site that I'd never heard of before that gave me a GFE and claims to only want 10% down, but I'd rather use a bank I've heard of!

I must be crazy, I'm considering a vacation home near a ski area! I was looking at the numbers, see what I *could* rent it for when I'm not using it. Aside from the headaches of dealing with tenants, do you think this is a bad idea? Any "rules of thumb" like the 2% rule for normal rentals? Someone told me 17 weeks, meaning the amount I could get for renting for 17 weeks must exceed the yearly mortgage (which this place clearly does)! To top it off, its a Log Cabin, so all the potential headaches of dealing with logs and stress points in the building and such.

Aside from asking a RE agent, I don't know of a way. Maybe zillow will show it?

I was about to reply to this, but Jon said everything there is, especially that this is a BAD DEAL. I run into this all the time, especially around major cities. Why people settle for single-digit cap rates when there is SO MUCH inventory right now I don't know! If you aren't finding them near Seattle then look elsewhere and find a good PM to take care of it! If you really want this building, offer what is worth it. Don't just buy it because you want an apt building! Go find that great deal!

Just to provide an update, I agreed and the tenant somehow failed Section 8, and didn't get the voucher after all, and is paying the rent themselves now. I didn't ask the property manager what they meant by failing to pass section 8.

So no Section 8 in this building, however I might have one going into another one of my buildings in another state this month, so I'll see how that one goes.

Create a business, and have a separate bank account for that business. Create a business! Create a business! Create a business!

Did I say that enough? I chose a LLC myself for my rental properties. Getting sued isn't worth it. You should also get liability insurance.

I 2nd the business part. I'd pay 30% of my net profit for new sales for my primary business! But for RE, not so much.

I'm also in MA, and before I decided to invest out of state I looked at lots of triplexes that were 1/3 the "book value". After looking at them I could see why! From having all the copper ripped out of the walls to a bio-hazard in dog feces to major structural problems (previous fire, then water damage, and foundation damage) there were tons of them that I wouldn't take no matter how cheap they were.

There was one triplex in Worcester that the owner was asking $300k for (valued at $400k on zillow at the time), and I remember I wasn't interested at the time. Then my agent said the sellers were desperate, and would consider ALL offers. So I said $100k, contingent upon my reviewing the building again since I didn't remember it. They accepted, so I went to look at it again. Boy was I glad I did, even at $1k it wasn't worth it! I passed on that deal.

There was another deal in Pittsburgh that I passed on that I got the seller (wholesaler) down to $2k for, but I couldn't get a contractor to give me a bid because they were scared of the neighborhood (I tried 5 different contractors)!