All Forum Posts by: Account Closed

For any potential home buyer, a general inspection is of course a must. But upon doing some research, I see that some recommend doing more detailed inspections before closing such as: termite, radon, plumbing, roof etc.. For someone who really wants to do their due diligence to make sure there won't be any hidden surprises/costs once the house is in their hands, I'm wondering if any investors would recommend additional inspections to cover all bases even after a general inspection? And if so, which ones?

Great. Thanks for the feedback everyone. Non-furnished it is !

I'm looking at vacant multi-family rental properties to invest in. I plan to do a little refurb and then get the tenants in. Is it better to have the places furnished or not? I'm afraid that if I don't furnish them, the newly painted walls/floors could get damaged when new tenants move their own big furniture items in ! Thus, was wondering if it might be better to offer fully furnished units where I furnish them nicely but cheaply ! Any thoughts? Or do any landlords even include something in the lease that says the tenant most use licensed movers to move their big furniture items so that there's less of a chance of damage during move in/out?

From what I've read online, it covers 'minor kitchen and bath remodels' but not 'major remodeling'. That's pretty broad. Does anyone have any experience or knowledge with more specific details?

Example: let's say I want to gut a kitchen and put in a new cabinets, new appliances, and new flooring (but with the same layout)? Is that OK? And let's say I want to gut the bathroom and put in new tiles, a new tub, a new sink, a new medicine cabinet etc.... Is that OK?

OK, so say I get an FHA 203K streamlined or Home Path Renovation Loan with seller's assistance for closing costs. Am I missing any potential upfront costs that I need cash for? And are there are any other must have inspections I should get?

1) down payment of 3.5% with FHA or 5% with HomePath

2) 2 appraisals if it's an FHA (one prior to renovations and one after renovations) ($1000)

*0 appraisals if it's a HomePath as they don't require them

3) general inspection $500

3) pest inspection $200

4) contractor bids if they charge for that

5) moving costs up to $1000

6) furniture etc... up to $2000

7) landscaping renovations (not covered with loans) $1000

Ed, I'm curious as to if FHA will allow you to apply rents as income to qualify if it's a single family with a mother-in law suite or if it's a single family (say 3bdrms) and you plan to live in one bedroom and rent out the other two?

Thanks for the input Jon. A cash out refi sounds like a good game plan if I need the cash for the next down payment; especially because I plan to do refurb on the 1st rental property I purchase. My goal would be to get a $2 increase in value of the property for each $1 worth of refurb. So if I put 20K into refurb and increase the value of the property by 40K then the additional closing costs for the refi wouldn't be such a big deal.

For a new investor with good credit but limited cash to start out with, what's the best path for building wealth and being able to finance multiple properties (say 1 property a year)? I don't want to get myself stuck in a situation where I invest in my 1st property and then can't do it again for a few years. If I start out with a buy, refurb, and hold as a rental property, would I be able to use the equity in that home 1 year later to do a home equity loan to fund my 2nd property down payment on a 2nd property? And could I continue to do that somehow? Or would it be smarter to fix & flip so I can get some more cash in my pocket for my 2nd deal. Or are there any other ways of financing multiple rental properties that I haven't thought of yet? I just want to be smart and plan ahead before I make my 1st leap !

Thank you for the info Ed. Based on my on-line research, I was under the impression that Home Path required 5% down for OI and 10% for NOI. Is that not the case?

New investor here learning as I go along !

RE: FHA 203K Streamlined & Home Path Renovation Loans:

1) Can a loan origination fee be rolled into mortgage payments? Or will this be an upfront cost in addition to the down payment?

2) What about the appraisal and inspections? Will these be upfront costs in addition to the down payment or can they be rolled into mortgage payments?

3) I know that Home Path does not require PMI. Outside of that, are there are any reasons to choose one type of loan over the other?