All Forum Posts by: Cary Forrest

I challenged the fees wanting line item accounting with explanations and POOF gone.  Back to the old estimate and reasonable fees.  No Lien or Abstract fees anymore.  As I thought in  PA, Abstract is included with owner's Title insurance.  Lien letter fees were somewhat inflated as they mistakenly added a commercial item to a residential property but most importantly - all the lien letter cost go to seller!  I'm the buyer.    They attempted to have me prepay these seller costs so settlement co. wouldn't be out any money in case the deal falls thru!   My guess,  most people don't push back or question anything.  Closing will be sporty if 11th hour fees pop up again.....so if anything funky happens I'll update.

Thanks to all!

In contract to buy a duplex. Really 2 side by side semi-attached SFRs and got a 65% surprise in closing agency fees over estimate - the day after I drop off contracts and escrow check to settlement agent.  The title insurance rate is fixed by state, no question there.  The town certification fees, taxes, recording fee and transfer taxes etc no questions.  The other agency  fees previously disclosed in their fee structure are reasonable regarding doc prep and settlement.

However the settlement co. after the fact wants additional amounts.  Especially annoying because its a cash deal from long term owner and seemingly not at all complex. I even gave them his paid tax receipts and have 20 years of paid water bills!

Abstract search fee of $200- isn't this already part of normal title insurance process thus a garbage fee?  

Lien Letter fee of $850- isn't this already part title insurance process thus a garbage fee?

Plus they want their closing $1050 up front before processing!

Thanks

I've analyzed a bunch of properties for sale as close to nuts and bolts as possible. I've done the same for recently sold similar condition and configured properties to get idea of cash on cash returns in neighborhoods I'm interested in.

Mostly between $200-400K. Mostly north or south of the rivers within 20 min no traffic drive time to downtown. Not looking at distressed nor prime locales. Everything from near gut rehab to turn key. Most claimed turn keys are rentable but mainly on borrowed time with mechanicals, kitchens etc all aged and due for replacement.

Using actual owner expenses where available and if not, estimate 50% of gross income towards annual operating expense. Detailed annual expenses include: vacancy rates, specific tax rate, 10% for property management, liability insurance, sewer, electric and gas, snow and lawn care. I leave out mortgage interest etc due to cash buyer. After adding brokerage, transfer tax, title insurance as well as accounting for any capital expense to replace 20+ year old mechanicals/roofs etc. I typically end up with 3-4% cash on cash.

I know people are irrational and enamored with home ownership but there's got to be something I'm missing.

Who would bother when you can certainly do better in a REIT and in many cases equivalent in a risk free CD @ 3.3% with click of a mouse?

What are others in the area actually getting/seeing cash on cash for recent purchases without kidding themselves ?

I've analyzed a bunch of properties for sale as close to nuts and bolts as possible. I've done the same for recently sold similar condition and configured properties to get idea of cash on cash returns in neighborhoods I'm interested in.  

Mostly between $200-400K. Mostly north or south of the rivers within 20 min no traffic drive time to downtown.  Not looking at distressed nor prime locales.  Everything from near gut rehab to turn key. Most claimed turn keys are rentable but mainly on borrowed time with mechanicals, kitchens etc all aged and due for replacement.

 Using actual owner expenses where available and if not, estimate 50% of gross income towards annual operating expense.  Detailed annual expenses include:  vacancy rates, specific tax rate, 10% for property management, liability insurance, sewer, electric and gas, snow and lawn care.   I leave out mortgage interest etc due to cash buyer.  After adding brokerage, transfer tax, title insurance as well as accounting for any capital expense to replace 20+ year old mechanicals/roofs etc.  I typically end up with 3-4% cash on cash.

I know people are irrational and enamored with home ownership but there's got to be something I'm missing.

Who would bother when you can certainly do better in a REIT and in many cases equivalent in a risk free CD @ 3.3% with click of a mouse?

What are others in the area actually getting/seeing cash on cash for recent purchases without kidding themselves ?