All Forum Posts by: Lynn Z

My buy was low in the 160's which was lower in value than my 1031 reliquished property creating "boot". I've increased the value with high end remodeling to exceed the sales price to $212000 and equal the debt (just to be on the safe side; much controversy over whether debt must be equal). In order to really get the money out I'd have to rent it for 21/2 years remaining and move in it for two. That meets the government requirement for 5 year hold to achieve tax free gain.

By working though the 1031 though I save around $27000 capital gains. That' s equal to paying for my auto I bought this year and seemed worth it at the time.

The option of rolling the replacement property into a more expensive deal is so unappealing when bargins are always hard to find in our area.

There are no experts in 1031 exchanges. Please post if anyone has 1031 experiences or expertise. It's such a grey area.

Bought a house as an investment that sat for 11/2 years with two top real estate brokers marketing it. Bought it low because the owners were tired. I toyed with rehabbing it completely as a 3/1 and reselling it but after talking to people who didn't buy it because it only had 1 bathroom I am adding a bath
reluctantly.

No one wants a 3/1 in our market and all of the county assessor comps in the area are 3/2's. If your husband is able to frame, plumb and wire (and move ducts) in record time I'd say it's a good bet it'll improve your odds of selling your house. A small mid level bath is going to cost 6-10k however. That's a alot of money to maybe improve marketability. See if you can't get another opinion.

The appraisals on refis of investment property I've seen lately are definitely conservative with respect to prior months. If you are financing your investment (or refinancing) I suggest:

1) Meet the appraiser vs. having someone let them in. Ask if they are a "junior appraiser" or a fully licensed appraiser who can do investment appraisals.

2) Gingerly offer them comparables you personally have knowledge of. They may glance at them but they all take the input. Sometimes lenders are going down a list and the appraiser is someone out of the area and very unfamiliar with recent comps especially FSBO's.

3) Give them previous layouts from other appraisals conducted -- They're always grateful. If they're new, give them anything that will help.

4) Make sure they are not doing an investment property as an understudy. I don't know of a lender/underwriter that won't require the property be assessed by a fully certified appraiser.

5) If you're trying to get rid of PMI, a STATE certified licensed appraiser is required and there are hardly any of those in our state. And you are required to have 70% LTV to even apply for release of PMI on most investor loans.

I find with 1031 exchanges that it's like being on a merry go round. Unless you take equity out of the replacement properties and increase your debt you're continuously having to find properties to protect a greater and greater investment or several smaller properties in the aggregate. That's not always easy to do in 45 days the government gives you. My real estate attorney simply dreads doing them.

Agents call about a "new listing" and when you check it out it's been for sale last year by another agent. Listing agents pull their listings off of MLS all of the time and relist. I don't think the days are cumulative for interrupted listings. It's a trick they use to freshen the listing like relisting a house on Craig's list. No one looks past the first page.

zillow's chart shows the value of the house I"m renovating to have fallen $6,000 LAST MONTH. Where do they get this stuff?

most real estate companies have contracts that do stipulate that the seller pays for the heating and air inspection and termite inspection and the buyer selects companies to use. This is negotiable of course. Sometimes a seller's agent doesn't like the one company the buyer selected and will agree to any other names except the one named. This is worked out.

If the contract falls through, however, whoever called the termite company and the heating and air company winds up paying the bill regardless of the language of the contract. You don't want your vendor thinking you're a deadbeat and throw them in an argument with a stranger/broker over $150-$200. Smart listing agents know this and will manipulate the call so that you as the buyer or your agent makes the appointment.

This contract change in our area clearly favors the seller. Lowers his closing costs at the same time. More frightening is the requirement that the lender/underwriter produce a committment letter 5 days before closing or suffer the consequence. The last 4 closings I was involved with the loan package was late and the underwriters slow with lots of last minute changes. Both of these items should be changed in your favor as a buyer by scratching through what is reasonable and negotiating it out on your own terms. Hate to see brokers/chains change the way business has been conducted for years.

Be careful with brokers. I applied for a refi on a townhome with a local attorney's office who had a good reputation. The the actual loan was processed in Florida and up the line I found out the company only had 3 vendors they used and wound up shopping my loan on an open call system.
I got 3 inquiries on my credit and a loan officer that couldn't read investor tax returns. Tried to get them to take those inquiries off of my credit bureaus and they wouldn't budge. I've never had a problem with bankers or anyone else locally. Just tracking a referral from a friend. Also, had a salaried job.

I know a young investor that offers $260 referral fee to like aged students who refer groups to him. He says he's turning people away. He's renting 3-4 bedroom houses for parties of 3 or 4 students.

Craigslist and the local university website has been dead in these winter months. VERY SEASONAL.

I think you should read a current contract at a leading real estate brokers office and ask them to explain their standard language. My realtor this week who is a member of a large chain real estate office was excited that their standard contract language has changed to require that the buyer's lender give a commiittment letter within 5 days of closing or possibly be sued for contract performance.

As we all know, closings many times depend on bizarre requests by "underwriters" and the loan officer waits like everyone else for the package to be delivered to the closing attorney. I believe realtors will take a harder road with buyers to avoid so many of them canceling contracts because of the market. Closing attorneys are not familiar with the changes in these contracts. Brokers are. You need to have one go over that contract and then change anything you can't live with such as the above (something out of your control). Also, this contract places the payment of termite and heating and air letters at the buyer's feet even though it's always been written that the seller will pay (buyer's selects company) in our state.