All Forum Posts by: Joe Delia

@Joe Delia

Just a thought: What if every other investor refused to pay the extra commission except @Joseph Montes. Next time that agent gets a hot deal, who do you think she is going to call first?

I remember the biggest fee I made as a wholesaler. My buyer did not blink an eyelash at my fee. He just wrote the check because the deal I was selling him was HOT! He made money, I made money and now he is the first person I call when I get a good deal.

Steve Foth & Dawn Anastasi thanks for the encouragement.
Sekelle O. & Joe Delia I see wisdom in what both of you are saying. On one hand, it's a significant fee. Still, she taught me a lot and helped me find a good deal. Perhaps, now that I've shown follow-through, I could bargain for a significantly lower fee on the next deal?

@Aaron Montague & @Patrick L. that was pretty much the situation. i live in chicago and invest in lansing, mi. i found the agent of zillow and she was very well reviewed. she said she'd need to charge me that in order to make it worth her while to work with me.

generally, i found her to be a great person to work with. she gave up a lot of personal time to slog through a ton of decrepit houses with an unknown commodity from out of town (me) on the chance we might find a deal. she taught me a lot about the process, answered questions, provided me contacts for electricians and inspectors, copies a lease and rental application she used for her own properties, local information, etc...

in general, as a newbie, I found her service invaluable and even if i was unaware that that fee isn't common, i don't feel cheated. i certainly gained something for my money. in the future deals, however, this is something i'll consider avoiding or minimizing. thanks for the advice!

@Joseph Montes An agent charging you a commission on the buyer side is very rare. Now that you have a better understanding of the process and hopefully the market you will be able to know what is & is not a good deal. So you wont need as much experience & advice from your agent. I'd work with a different agent the next time. Newer agents are always available & would be happy to get paid the seller provided commission (guessing it was around 1k on your deal)

In June, I bought a 3 bedroom/1 bath SFH in Lansing, MI on short sale for $20,000 that I am now renting. I was able to find conventional financing from a bank, getting a 30-year loan at 4.79%. I'm currently gearing up to start looking for my next property and I am in the process of evaluating everything I spent on the first deal to see if there's any room for improvement.
One of the things that's very frustrating is, especially considering that I only put $4,000 down, is the amount I paid in closing costs, which exceeded the money down at : $4,540.64. To be honest, I kind of got pulled through my first mortgage experience as the constant stream of paperwork/charges/concepts-new-to-me was pretty overwhelming. Now I've gone back and read up on and evaluated everything I was charged:
-Agent commission: $750.00
-Origination charge: $606.50 (cost to create the loan)
-Appraisal fee: $515.00
-Credit report: $6.68
-Daily interest charges from 6/25-7/1: $12.84 (prorated loan interest)
-1 Year of homeowners insurance: $262.00
-Initial escrow deposit: $125.83 (Start escrow for insurance/taxes)
-Title services: $527.80 (Check for liens on the property)
-Title insurance: $349.75 (Insurance in case there are liens)
-Gov. recording charge: $80.00 (Register property at city/county/state level)
-Gov. transfer taxes: $172.00 (Costs of taxes/stamps/deeds to register)
-Tax service fee: $85.00 (Makes sure I'm paying taxes on my loan)
-Flood certification fee: $19.50
-2013 City summer taxes: $1,027.74

My question is do you see anywhere I could have saved money? The last fee is pretty large and seemingly unavoidable given how the city assesses taxes, but what about the others? Also, let me know if any of my descriptions/understandings of what the charges are seem incorrect.

Thanks for your help!

Joseph

We also have more than 10 loans, but we were able to refinance the ones owned by Fannie Mae through DU Refi Plus. This was strictly a rate-and-term refi - no cash out - but the terms were comparable to what you're looking for. Several of our loans were not owned by Fannie Mae, and we were not able to refinance those.

After that, we went with option #3 and found a local portfolio lender. The terms aren't as favorable, but at least we can get new loans. This lender is offering 15-year fixed at 5.875% for up to 80% LTV. The 15-year amortization is tough on cash flow, but equity will build quickly. The rate is high in today's market, but it's fixed - and a few years in, it may look like a real bargain. Cash out is no problem, small loans are fine, and seasoning isn't an issue. We are working with this lender to acquire new properties, not to refinance existing ones.

When we started investing in the early 2000s, there was no 10-loan limit. I'm hoping those days will come again, and we can refinance more properties then.