All Forum Posts by: Daniel A.

Hi all, 

I am wondering what your experiences have been regarding a float-down option or having lender match current rates on mortgages after locking in a rate.

In my current experience, I have a rate locked in at 3.625% and now that rates have fallen to 3.5%, my lender (credit union) says that they do not have a float down option and that they cannot lower my rate in any scenario. My closing is mid Feb. They say that my rate wouldnt go up if rates had increased and therefore they cannot lower it either. Disappointing because its thousands of dollars when thinking 30 year term. I had heard mixed things about float downs. Is this normal? 

@Eric Thomson

I’d be more concerned in the outskirts of Conroe 

@Cody L.

Any inner loopers want to do a meet up later this week or next week?

@Meir Greenblatt

From my understanding, if you are buying a home with the intent to rent out or AirBnB, you need to get an investment loan. Notwithstanding certain circumstances like moving for a job, etc. If you purchase a SFH with the intent to rent but tell the mortgage company you will be primary homeowner, you are running the risk of the lender calling the note due. It's also mortgage fraud, which can be criminally prosecuted.

the reason is that the lender inherently incurs more risk when it is deemed an investment property ,therefore they command a higher investment rate. 

Does your lender(s) tell you otherwise? 

@Meir Greenblatt

Interesting perspective Meir. I am hesitant to fully release to AirBnB because I don’t think they would treat the property with the standard of care id like. 

To your point, about not having to live in it a year because I am putting 20% I am unfamiliar. I am getting a primary homeownership interest rate which requires I habit the home for 1 year before I rent out. Let me know if you know of something otherwise 

@Brian Nel yeah I agree that it’s a different analysis. I was looking at it from an opportunity cost perspective in order to compare in anticipation of renting out in the future. However, the primary intent was to house hack, live nicely ITL and secure something close to the areas I enjoy, especially in this low interest rate environment and stock market highs (memorial park, Washington ave, heights, Walking distance to upcoming MKT development). Cottage grove gets a bad rap due to narrow roads and outdated drainage. However the city of houston is improving this currently. Project dedicated to solely Cottage Grove East is $18MM currently ongoing. Then they will do cottage grove central and then west. 

I also agree with your point regarding roommates, I personally prefer it at this age (under 30) and I have one committed at immediate move in, other mid year 2020. @Tushar P. to your point, I will be attempting to AirBnB short or long term until 2nd roommate ready to move in. We’ll see how that goes. 

@James Polk I agree, well put. I was acting under a timeline as I had an expiring apartment lease. There are definitely deals to be had in the area when sellers are motivated. Some of the solds within 12 months are ridiculous and could easily get 10%+ coc. However, there were not any deals in the 2 months i was actively looking. On this purchase I prioritized more on what I liked, paying a premium with the intention of potentially living here in the future with no roommates. 

The reason I say I dont think there will be much appreciation is because the sellers bought the home new @ 350k. After comm and cc the sellers lost money on the sale 7 years later

Hi all, 

Pulled the trigger on my 2nd property: I bought a free-standing no driveway townhouse near cottage grove/washington corridor area for 365k-375k. late 2012 build around 2250, 3bed/3.5 bath. Used conv financing 30 year fixed 20% down. 

I plan on house hacking to where ill have one person paying ~$875/month and the other ~$900/month = ~$1775. P&I+insurance = $2285/month so ill technically only be paying $510/month for the master. 

I believe I paid a slight premium for townhouse as I saw prices in rice military/cottage grove go as low as ~$145/sq ft where I paid in the mid 160s range. However, home is newer construction, excellent condition, and has some custom features.

What do you guys think of this purchase? I mainly did it because i wanted to lock up something nice inside the loop and plan on holding. I dont think i would make my money back selling in 5-10 years as I do not foresee much appreciation in this area, especially for townhomes. However, It can rent for $2650/month, no HOA, $1250 insurance, 2.42% taxes so I would be looking at around 4% cash on cash and around 10% if i add in the principal

Thoughts?

@Chris Hopper Title issues are more complex than that, for example if its a special warranty deed, that only clears title/no liens/claims for that owner, not for previous. Quit claim deed is even worse. 

Yes I bought a townhouse in cypress/copperfield that cash flows well but that is the only investment property I have currently. I have been looking for a 2nd for about 2 months now. I have cash ready & pre-approval ready just waiting for something i like. 

@Chris Hopper yeah but that's a foreclosure so not as clear cut. i haven't looked into it but could have a special warranty deed or some other issues. Im not against rehab but do not feel comfortable taking on major rehab projects when there are deals out there to be had with no or minimal rehab. Thank for the input