All Forum Posts by: Matt Kautz

@Caroline Gerardo That makes a lot of sense, I didn’t think it would fly to ask the seller to carry at 3%, I know I wouldn’t want to. What’s the best way for me to explore the non-QM options?

@Caroline Gerardo Dumb question, but what does non QM loan mean? And, I don’t know about whether he has wholesalers but I’d be happy to discuss options. Thanks!

@Ryan Whitcher right on! Is it normal for sellers to match market mortgage rates? It is there no standard?

I recently (within the last 3 months) bought a house that was established as my primary residence, and locked in a 2.75% 30 year fixed on it. I’ve found another, significantly more expensive, property that I’d like to also buy as a primary residence that’s in the same area. I qualify for financing, but in speaking with my mortgage broker he worried that in order to make the new home my primary residence, the underwriter could require that the home I’ve already purchased be refinanced as an investment property, which would raise the interest rate to over 4%, plus closing costs. This seems like a waste.

The seller on the new house I want to buy has indicated that they may be willing to carry paper. My thought is that this could solve the problem, provided that it’s typical for interest rates on seller financing to match market mortgage rates. Is that the case?

To summarize, I want to have two houses financed as primary residences so that I can get the lowest possible interest rates, and am wondering whether seller financing could be the solution.

Thanks!

Hi All, My architect is telling me that the new title 24 laws being enforced in California require that any remodel triggers an energy review of the entire home, regardless of whether living space is being expanded. Is that true? Does anybody know what triggers an energy review? It's an older cinder block house so getting it fully up to code would be expensive. Thanks! -matt

@Christian Mkpado thank you, these are all great metrics I hadn't considered before. Also, great advice on the rental comps front, I realize I need to do a lot more research.  

@David Eiges That's a great point, I hadn't factored the tax savings into my calculations at all.  Just so I'm clear, is the $200k you were including in your back-of-the-napkin calc based on the down payment? I didn't realize that was tax deductible.  

Hi @Christian Mkpado, thank you so much for the very detailed response. The zip code is 90039, and this is listed on the MLS. I agree with you the sales price is too high. Looking at sales comps in the area I'd estimate it to be worth closer to $780k. I'm using places like http://www.zillow.com/homedetails/2201-India-St-Lo... and http://www.zillow.com/homedetails/2665-Benedict-St.... 

That's great feedback about the rent comps being too low, but what I'm posting as aggressive is significantly above where they are now, and I'm not sure how far the $25k per unit will go... They need kitchen/bathroom work which tends to be expensive. But, the neighborhood couldn't be hotter, so let me know if this feels low. Square footage is 1,731/AS sqft 4,796/VN lot size. 

Thanks!!

-matt

Just getting started looking at investment properties in the very competitive Los Angeles area and found a duplex today with a highly motivated seller who needs to unload quickly.  It's a great area, units will be delivered vacant, and with some work unit rents can be increased significantly to market rates.  So, in theory it seems like it should be a great opportunity since there's plenty of room for negotiation on purchase price.

 Since this is my first property analyzed, I'm working for the first time with my cost assumptions worksheet, and no matter how much lower I go on price and higher on rent, I just can't make the numbers work.  In all likelihood it's not that great a deal (nobody hits a homer their first time at bat), but I'd love your opinion on my calculations to be sure I'm not over- or under- estimating anything.  

Screenshot below of the cash flow calculations I'm making... left side is what the offering price is, right side is with aggressive assumptions on increased rent/lowered purchase price.  As you can see, even if the purchase price were 17% lower and rents were 45% higher, cash flow is only breakeven. 

Feedback welcomed/appreciated.  Thank you!!!