All Forum Posts by: Lynn Z

If you say cookie cutter, does that mean those prices are comps within the past 6 months? Make sure you check on this. Why is this house so much less? Is the price per square foot there?

I'm doing some FSBO sales right now. The state does require seller disclosure (form on the agency website) at the time the contract is signed and a lead disclosure also. Make sure the contract reflects what realtors are using to cover your rights. Brief contracts are great but leave so much out. Give yourself plenty of time to close also even though your lender sounds ready. Even a cash deal can take 30 days in my opinion. Get a survey.

In our state, you have 10 (business) days to have a home inspection and summarize to the seller what you want fixed or what money you'll take for the repairs listed. It allows you to back out of your contract if you're not satisfied. Time for submission and response is tight so know what the standard real estate contract says about this. Add it to the brief one if it's not there. Get the name of a good home inspector although most miss alot. This is important here in case there's problems you're not aware of.

Have yourself a good real estate attorney to check over everything. They are invaluable in my experience. Don't use their contracts though. They leave alot out.

my credit union will not do any investment loans--at all...and they do alot of business. my daughter's first purchase was a brick bungalow in a great neighborhood. She moved in a lawyer as a roommate, he paid 1/2 of everything and she did the cleaning. Bought at $110; sold it a year later at $135. It was only 1350 sq. ft. and needed no work. She put the money from that home into a triplex in the same neighborhood and bought up. She dumped alot of cash into improvements over a six year period. It's now worth alot of money. I did finance the early deals until she could qualify for a mortgage. If you have someone you could partner with and live in the house (rent a room) you'd be surprised how fast the numbers work.

Rehab money can come from a commercial type banker where you borrow and finance on a 15 or 20 year am basis and balloon in five years. The closing costs aren't much and you can go to a bigger bank or mortgage company to refinance the short term money to include your improvements. That works every day in our city for alot of investors. There aren't many sources but enough to make it work. Also, if you see a house you can call the banker and they'll approve it verbally or ride by and say "yes" or "no" quickly and you can make a cash offer and save money on the buy. You need speed when you buy at a good price in my opinion.

This sounds tough for starting out. I bought two triplexes within six months and worked full time. It's a killer. A nice single family home with a steady renter would be much better especially in an appreciating neighborhood. Multifamily can be hard without alot of cash. Don't forget PMI costs for those 100% loans unless your piggybacking and that get's stickey I think. Remember on investment loans of less than 80% ltv the pmi sticks with you until you make SIGNIFICANT improvements and furnish a state certified appraiser ($$$ if you can find one) to provide increased value to remove the PMI. One of mine required 70% LTV value just to apply for the removal of PMI because it was an investment property even though my daughter lived in one of the three apartments. If you could get your personal debt in check you would save alot of headaches on this.

Isn't anyone from South Carolina? We have wonderful real estate located throughout our state and it gets pricey on the coast. Investors and homeowners are still spending money here although most think it's a buyers market.

we have old properties and new properties. The greater number of properties you have the more you have to look for an umbrella policy that will provide some insurance coverage. Not necessarily the highest coverage. Tack on cars/personal home to bundle the service. I don't have so many properties but have relied on State Farm to give me the highest "replacement value" insurance for my properties, and I throw in my home and car. Before I make an offer, I call my agent to view the property--if he won't write it , I don't buy it. My daughter's an agent and she had several people close on houses with an insurance binder only to have them cancel on them due to some problem and she had to scramble to find another agent to write the policy on their homes. Also, they'll only two claims (even if the payoff was zero) to write you. Used to be three. That's scarey. These days you really have to pay for good insurance and not make minor claims. Getting them down a few dollars isn't worth it to me. Good Luck (I'm a newbie too)

I have read now that you can subtract selling costs (commission, etc.) from the sales amount which doesn't boost my borrowing from my lender to make up the difference. Although I must read more on the replacement end, exchange costs are deductible there also. The problem is everyone knows a little about 1031 exchanges but there don't seem to be common knowledge when discussing the implications. Each one of the little suckers seems different each time. Discussion on this forum will help. Thanks for the input so far.

In this 1031 exchange the replacement property price plus improvements will equal the original investment property (spent by 180 day exchange period). The problem is, when the improvement monies are wrapped in the new mortgage the transaction thats higher (sales price boosted to include closing costs) causes me to borrow and improve more than the original offer would have been originally without agreement to include closing costs. That hardly seems fair that there would be a "penalty" for just allowing that transaction. Is there a way to show it on the HUD as a consession with the actual sales price not including the closing cost boost.

Also, does the debt of the replacement property really have to be equal tto the debt of the original investment property? My accountant says yes. Internet says no such thing as long as the 1031 exchange involves trading "equal or higher" for the replacement property. What's the truth of the matter? If I didn't have to pay $30,000 taxes I wouldn't mess with another 1031 exchange. Does anyone have alot of experience with these transactions?

This is simple but here goes: We use a private mail box company located central to the rental property for the mail and pick up daily. In the leases, we give tenants the option of dropping their rent off at the desk and it is then slotted for general mail pick up. The staff is small and will accept rents except for cash. Tenants love dropping their rent off and when running late getting it in fast. When we travel, they are willing to keep key box (for those locked out) and deposit rents as well for a nominal sum. Then the money can be moved around long distance with a laptop and an aircard. We're going for 2-3 months soon. I'll report back how it works.

I've met with alot of young graduates looking to buy investment property (already rented with/without leases) in great areas. They set up appointment, walk through quickly, get together to crunch numbers and have a mortgage broker that will work with them. They indicate a 10 year hold approach which is good. Willingness to kick in a little to get started and not run off the current tenants. They just don't want to use realtors and you don't really need them if everything is thought out. Need to remember to be sure any multifamily is zoned for #of apartments in the property and that the lender willl loan money on multifamily. Have a major insurance company look at the property before you offer and say they'll carry it or contact the sellers guy (they're getting so pickey) and make sure those taxes/insurance are calculated to the month (don't accept old records) to know exactly what costs are going to be. These investors are just buying word of mouth/street talk "Want to sell" "We're buying" basically. Some of this cautionary talk goes with the territory by those of us that have been burnt over the years.
Good Luck

if buyer and seller agree to an increased sales price to assist the buyer with his closing costs, doesn't the seller wind up paying more capital gains on the increase? Is this something that benefits only the buyer? How common is this?