All Forum Posts by: Brit F.

@Morgan Granger, look for the builder surplus shops in your area.  You might be able to find cut & polished, aka prefinished, granite slabs for kitchens & bathrooms, which can be cheaper than some laminates.  One shop near us regularly stocks 7-9 foot long slabs for $300-$500.  We almost always use these in bathrooms.  Kitchens can be trickier, depending on the layout.  Simple galley kitchens are good candidates, but the more complex the layout, the less sense it makes.  An installer will still need to cut & fit the prefinished granite in place, but if you're handy with an angle grinder, it's easy peasy.

@Ben Clark, if the agent said it exactly like that, notice what words weren't included to describe the competing offer: solid, strong, or above asking, for example.  And, the agent didn't say the seller was likely to accept and that yours could be a backup offer.  If the offer is real, it may be very weak.  If the offer isn't real, you're not competing against anything.  

Stick to your own strategy because that's all you can control - unless you find out the specifics from the potentially competing offer, which your agent can help with depending on how forthcoming the seller's agent wants to be.

I'm with you, @Steve Chan.  It infuriates me that I have money tied up in a 401k; my one and only financial regret is my 20 yr old self listening to the 'smart' people telling me to max out my 401k.  I now only do enough to get the employer match.  I have every intention of being in a higher tax bracket when I retire, which calls into question the value of the 401k.

All that said, the silver lining of this pandemic is the relaxed rules on 401k loans, which I'm using to fund remaining rehab on a project instead of taking a draw against a LOC.

@Jeffrey A DeAngelis

If you're selling to the independent middle person/entity solely to skirt the IRS's SDIRA rules, then yes, it violates the spirit of the rules, and yes, the IRS has seen this tactic before.  Don't do it.

Find another property to buy with the SDIRA, either wholly, or partially through an equity partnership with your personal funds.

@David Y M.,

What are her concerns?  ...other than her budget for a primary residence is different than yours.

Coming from LA, does she understand the real estate market here? And unless she's already familiar with your target area (plus you mentioned your lack of background in BRRRR), you're asking her to take a huge leap of faith that this is a good idea for both of you.

Compounding that, if you were implying your House Hack would be in a class C neighborhood, I can understand her reluctance...you and she would have to be obsessed with real estate to house hack in a class C.

It sounds like you should dial back your plan a bit...For example (and not saying this is what you should do), you could try an approach where she gets her nice house in a good area with appreciation, then move after a 1-2 years and show her the equity upside.  In the meantime, you can do projects around your house and apprentice to a rehabber/flipper/wholesaler/whatever to gain experience.  At any point, if you force the rental idea issue, you've lost the battle.  It's a long game, so yes, you'll have to be patient.

Ultimately, you have to find a way to show that real-estate will meet her goals and address her concerns.  How you do that is more art than science...you might even try reading some negotiating books, such as Never Split the Difference.

Hypothetically, if documents can't be recorded electronically or physically for whatever reason, it shouldn't be a roadblock in a legal sense because non-recorded Deeds and Deeds of Trust are still binding in TX.

However, if the lender requires the documents to be filed before they fund the loan, that's a lender-specific policy and any exceptions would be at their discretion.

@Eric W., presuming closing the investment property purchase can be completed remotely as the companies are claiming, the odds are in your favor.  I wouldn't expect a state or city mandate to derail it.  The risk is that one of the critical groups inside the lender or title co ends up unable to conduct business because too many people are out sick, which is difficult to predict or influence. 

For both your buy & sell transactions, it comes down to how buyers & sellers behave when one party is in breach of contract.  If one party is in breach and the other terminates the contract during this crisis, showings, inspections, and appraisals probably won't be considered 'essential services' during shelter-in-place orders. Meaning, both buyers & sellers will have a difficult time starting over after terminating.  Knowing that, both parties should be motivated to stick with a transaction, even if one party is in breach.  TX doesn't yet have a shelter-in-place order, but it's probably coming.

As the saying goes, focus on what you can control.

I wouldn't sweat the potential rate lock expiration; rates are going to stay low for a while.

@Seth Knopp,

The most straightforward way is to start asking private investors what would make a deal attractive for them at that time.  Ask them what returns they are getting now and if they are happy.  Just have a casual conversation, but start with people you already have a relationship with who trust you, and build your network from there. 

With the recent (and likely worsening) stock market volatility, lots of investors will be looking for alternatives.  Ultimately, we're all interested in the same thing: equity upside and cashflow.  You just have to find the right combination of terms to solve mutual problems for you and the investor(s).  Consider yourself a problem solver, not 'a guy with a deal'.

To go more in depth, listen to the BP podcasts about private money, and look into the book 'Raising Private Capital' or similar.

Get contract language from a real-estate lawyer.  Paperwork is the easy part.

@Shawn Burns, yes the contractor should have pulled a permit originally for that type of change.  At this point, you might as well wait.  If there's an issue with the plumbing that requires repair, pull a permit then.  If that happens and if you want the original plumber to come back, invite them to do the permit + repair for free.  If they refuse, let them know you plan to file a complaint with the appropriate state agency.  If you have to pay another plumber to fix it, depending on how much trouble you want to go through, you could go to small claims court to recover the repair cost from the original plumber.  Or, just call it a learning moment and move on.

When it's time to sell (I'm not sure if this approach could work in CT), but you might be able to disclose that it was repaired without permits, and let the buyer choose to take the risk or not.  Then again, if the plumbing is working well, and if the inspection doesn't turn up anything, the buyer may not ask about it.  It really depends what the disclosure requirements are when you go to sell.

@Eddie Gonnella,

My understanding is that Gary is weighing the difference between using a CO-Refi/HML vs HELOC from a currently owned property, in order to appear as a cash buyer to acquire a new property. Following the BRRRR model, if Gary wants a conforming loan as permanent financing on the subject property, the lender must comply with the rules.

The rules for conforming loans come from Fannie/Freddy.  Here's a link to Fannie's section B2-1.3-03, which covers CO-Refi's and the Exception.  To summarize:

• If purchase money is secured by the subject property, you have to wait 6 mo's before a CO-Refi.  There's no way around it with a conforming loan.
• The Exception that removes the 6-mo waiting period becomes an option when purchase money is documented cash, unsecured loan, or, in Gary's case, a loan secured by a property other than the subject property.
• In either situation, if any existing loan is used as purchase money, then the CO-Refi proceeds of the new loan must be used to repay the existing loan.  This requirement is clearly specified by Fannie.

If Gary wanted different rules for the permanent financing on the subject property, he'd have to find a lender who offers non-conforming loans (portfolio, private) with more underwriting flexibility, which will be higher priced to offset the risk.