All Forum Posts by: Brianna H.

 This is a 203k loan. The contractor is under the impression that a CO is not needed, but I have never had any experience with this type of loan/ using a contractor. 

The bank AND the construction loan company (hired by the bank) had an inspector go out to look at the work. 

BTW...I was born in Wheat Ridge! :-)

 That's what I was thinking...I'm sure somewhere along the lines, the contractor signed some forms that required insurance/licenses/permits. Thanks for the input as a contractor! That really helps! 

 I will look more in detail at the contract that was signed between me, the contractor, and the bank. I remember there were at least 15 pages that I needed to sign just for the deal regarding the contractor! Thanks!

Howdy!

Does anyone have any experience with a renovation loan? My contractor completed the work, but the bank is stalling the final payment. They want to see a certificate of occupancy, which I am told only applies for commercial property. They want to see license and workers comp records and remodeling permits. They also want to see a detailed invoice for the work. 

They have already gotten 2 inspectors out there to look at the finished work, so I don't understand why they are dragging their feet? The contractor wants to get his lawyer involved, which I hope wouldn't affect me because they signed the contract with the bank, but this is definitely not good for me in the future. 

I'm just wondering if anyone else has dealt with this. Is there anything I can do or should I just tell my contractor to suck it up and get these documents together?

 I'm not seasoned yet, as I only have one rental as well, but I would be willing to share my experiences with you and vice versa. :-) I am looking for good contractors, repairmen, CPA's in the area if you have any recommendations. I think I am done with my contractor...he told me the work would take 10 days, when it really took him 2 months! :-/ He told me he would reimburse me one month's rent, but I haven't received it yet and I am not holding my breath.

 Refinancing is bad for a typical homeowner. Most people will refinance into a new 30 year loan with lower payments and not make extra payments on the loan. Before I got into the investor mindset, I refinanced from a 30 year 5.25% loan into a 15 year 2.9% loan. This was still a great deal for us, but I wish I would have refinanced into a lower interest 30 year loan and applied the difference monthly to the loan. 

If you are an investor, you are looking for the lowest payment possible. That's why you see investors taking out 30 year loans when they could easily afford a 15 year loan - they want the most cash flow out of the deal. 

With $800 in fees, you will recoup the costs in a little over 6 months! That's great! The only way this would not pay off is if you were to sell before those 6 months were up. 

 I can't wrap my mind around taxes on a $160k house being $600/year. That's 0.4%. I am assuming that since this is a new house, taxes are just on the land and you are in for a rude awakening next year. Just my two cents. This doesn't seem like a good deal at all.

Just FYI...taxes in Texas, from my experience, are typically around 2.5%. This would be about $350/month.

When I saw that you mentioned MLS, I realized you must be in the Houston area! :-P Between MLS and HAR, we have some great resources at our fingertips. However, I have heard that in other cities they do not utilize MLS as much for rentals.

Look at comparable properties in the area to see what average price/sqft is. Also look at comparable rentals in the area to see what average price/sqft is. Guesstimate what your expenses will be (mortgage, taxes, insurance, vacancies, etc) to find your monthly profit. 

My mortgage broker is under the impression that rental income can be counted immediately..you just need to provide the signed lease to verify the income. You can also use tax return after that is completed. I haven't tested this theory yet, but we are also looking for another property.