All Forum Posts by: Byron Kim

Hi, looking for home warranty recommendations if anyone has had a good experience with any companies. 

I've dealt with First American and Homeshield in the past and both experiences have been absolutely awful. I've been recommended Achosa from my realtor, but would like to see what others are available. 

Thank you in advance. 

Forgot to add: property is in Las Vegas, NV

Good morning, BP community. 

I am currently shopping mortgage products that are offering the lowest rates on an investment property. I currently have an offer out on a property we are expecting to close around $330k. I have a pre-approval letter for the loan amount needed. I have a credit score of 790-800+. 

If anyone is interested or can help, please reply to this post or DM me directly. More financials can be provided as needed. 

Thank you ahead of time. 

Best,

Byron KIm

@Andrew Postell

I appreciate your taking the time to crunch the numbers. The effort to help is awesome.

I’m not sure if the numbers you are crunching are entirely correct. We bought the property like new at what we felt was under market. $349888. At 25% down, the mortgage was around $260000 at 30yr fixed.

Yes, we essentially break even or profit maybe $50/$100 a month (we’re definitely not losing $300).

This has never been our long term goal either. We are playing a hold and appreciation game moreso than immediate cash flow.

We expect an appraisal to come back around $410-420k based on recent sales without having any work to the property.

Thank you to everyone for your input! Much appreciated!

@Andrew Postell hey, sorry I didn’t make it very obvious.

I mentioned mortgage now is $1288, with tax and hoa and insurance, it pushes monthly expenses to $2000.

So roughly $712/month.

Since this would be my first cashout refi, I'm wondering if I'm missing anything here

Property: existing mortgage has 255,000 left on a 30-year fixed at 4.25%, property appraisal estimate 410,000
- current mortgage is $1288/month
- unit rent is $2050 with 1-year lease, market rent is around $2100-2200
- HOA and Taxes push monthly expenses (not factoring other things like vacancy and repairs) to $2000/month

Cash out – can go up to 307,500 loan amount so cashout will be around 51k. Rate will be about 3.5%
- Mortgage payment would be $1381 on a 30 year fixed
- We initially put down 87000 on our current mortgage

No cash out – rate is about 3.25%
- Mortgage payment would be $1110

my thoughts are to take the cashout and take a small loss on the unit until we can raise the rent. 51k would obv be reinvested into the market until we find another property to buy. 

what are your thoughts? It seems pretty straight forward, but since this is my first cash-out refi, am I missing anything here? 

Thanks in advance

Man, this is why this community is awesome. This info is fantastic and will help me moving forward with my rentals. Thanks, everyone.

@Bill B. 

All appliances (fridge included) came with the unit when purchased. It was turnkey. I didn't consider selling it, but I may in the future when I buy more units.

 

@Bill F. 

The unit is Class A/B in Orange County, CA. I appreciate your insight as to considering the type of unit and target tenant. I have another class C unit in the area that also came with a refrigerator, but is older. When that tenant moves out, I will very likely consider selling the refrigerator to avoid this issue in the future. 

Thanks, everyone for the replies. I will be replacing the unit this weekend and not charging the tenant. I'm growing more suspicious of the repair company that came out. I agree; it seemed odd that the unit wasn't unplugged when they were trying to replace the panel. That's been my biggest challenge with my units: Finding good help for maintenance. I'm not experienced to know whether or not I'm being upcharged for costs. 

The unit when purchased came with all appliances (refrigerator, washer and dryer). After this replacement, they will both be in good condition. I will factor possible future repairs into the price of the rent moving forward. As is, I may have under-rented my unit, but such is life. 

Long story short, I had a repair guy come out to repair a washing machine. While he was trying to fix it and stepped away, apparently my tenant touched a few things and shorted washer AND dryer, making both nonfunctional. I was not present at the time (maybe my mistake was not overseeing the repair myself) so this is just my best version of retelling the story as I've heard it from both sides. Anyways, we've decided to replace it. 

Based on the verbiage in our rental agreement, all repairs for attached appliances are the landlord's responsibility, and unattached appliances are shared responsibility of tenant and landlord, though how much isn't specified. He is a good tenant, paid on time (even during COVID), and hasn't bothered me once in 1 year. We just signed a new 1 year lease a month ago and I didn't raise the rent due to timely payments during COVID.

How would you guys handle this situation? My thought is to replace the unit, take the loss this year, then raise rent next year to recoup my losses. If he moves out, then I should be able to get more rent from the next tenant anyways. 

Thoughts?

Just for closure since I got a lot of good advice here, I'll share what happened. 

Tenant became agitated with the issue, claimed it was affecting her emotional well being. I offered to purchase a portable unit for her to use and reduce rent to help pay for the cost of electricity for the summer months (~$50 a month), which she initially agreed to. However, she later claimed it was a safety hazard after bringing her own A/C repair guy to evaluate the unit (which it wasn't). She then demanded some pretty bold concessions (20% reduced rent for the remainder of the 1 year lease, pay for A/C repair, etc). After a brief back and forth with her and her mother and some advice from my attorney friends and other experienced landlords, I offered to terminate the lease at no penalty, as I did not want to continue to deal with this issue all summer. 

I ended up removing the central unit from the closet (it worked, but not efficiently) and installed a mini-split A/C for $2300. Figured the money was worth the security of a functioning unit for the next 10 years. Unit was rented within a month and haven't had much trouble since.

Thanks everyone for the advice. Much appreciated.