All Forum Posts by: Dustin Little

Thank you for the information, it was exactly what I was looking for.

I have been receiving letters in the mail to refinance my current VA loan. After about the fifth letter I caved and called the lender, Low VA Rates. I called assuming I would catch them right away in a gimmick. But, it seemed to be pretty legit. However, after filling out the preliminary paperwork I watched all the fees add up. Now I know there is a 2% VA fee, but now I am being told there is additional fee associated to the VA loan of .5%. My $121,500 current balance is subject to raise to $127,000 with a promise that my current lender will be mailing a check for $1500 to $2000 for escrow. Does this sound right? $5500 seems like a lot.

Thanks for any advice.

I now have more details on the loan. It is a VA 5/1, 2.5%, after the first five years it can't not raise more than 1% each year and has a 5% cap. I will be able to pocket an extra $400 month since since I've been negative $200. I am pretty certain this is the route I am going to take, thank you again everyone for helping me find a resolution.

So, I have looked into refinancing the property.  An option is to do a 3/1 at 2.25%, I have requested information on a 5/1 and the rate.  I would feel much more comfortable with a 5/1 a 3/1, however the whole concept is new to me.  If I were to do the 3/1 I would be up $200 rather then down $200 a month.  So, that is actually an extra $400 in my pocket a month. I am still trying to get my head around this because yes, over the next 24 months at $400/mo that is $9600. But with my current loan in 24 months $10000 more in equity then with the refinanced 3/1 loan. I guess I am only just now realizing I must calculate in the $200/mo it cost me to keep the current loan, total $4800.  If we subtract that from the $10000, ouch when comparing it to the 3/1. 

So it is clear, positive cash flow is KING. So, now what?  Is it okay to refinance with only six months since my last refinance?  Should I plan now to sell near the end of the 3 or 5 year fixed rate or maybe look into another refinance option at that time and compare apples?  I am beginning to realize as I type this I am walking myself through it.  But, how safe are 3/1 and 5/1 ARMs? 

Is there anything I am overlooking, overthinking?

P/S I hope others are getting something out of this post than just me, thanks again BP community.

Thanks, I kind of thought it would be hard to get a call back. It is a bank from out of town.

I am just getting in the game with little knowledge and almost zero experience with REI. I have one property I have a PM renting for me in another state and that is the extent of my REI experiences.

So, after reading a recent success story, I decided I would drive around town during some free time I had to see if there were any homes that appeared to be vacant.  I was surprised to find a home only 3 miles from me in a nice neighborhood that appeared vacant.  I called the county records office and found out it was a foreclosure and a bank trust owned it.  I called a few numbers until I was able to talk to a human being, who then took my name and number and told be the office that handles this sort of business will contact me in 24-48 hours. 

I was pretty proud of myself for first finding the house and second hunting down the owner/bank.

So, I am coming to BP for any advise on where to go or what to expect from here.

I should mention I plan to sell my current home soon which I used my VA loan to purchase. If I were to be able to purchase the foreclosed home, I would move my family into it (if hospitable) and pursue selling my current home (by means of FSBO). I have about 13,000 in cash, the foreclosure I am expecting to be worth around $200,000 once in good condition, hopefully normal maintenance is all that is needed (i.e. cleaning moss of roof, landscape cleanup, paint, etc.). The foreclosure shows it was purchased by the back for $158,000 less than a year ago. I don't know if this is useful info as far as knowing what to expect to spend or if the comps are a better indicator.

Once again thanks for any advice. 

Insurance $53

Tax $37

Principle $542

Interest $344 (3.375%)

Total Payment  $975

Maturity Date 10/2029

Balance (I was a little off) $121,690

Comps in the area are for sale for about the same price and are rent at or below my current tenants, who are possibly PCSing (moving) in July.  The home is only 6 years old, very little maintenance is required, tenants pay utilities and maintain yard. The PM cost 10% which is lower then most for the area, and the rent is $850/mo.

unfortunately, even though I purchased in 2009 the house is only even with what I owe. So, if I verse to sell I would lose in closing cost. As of now I think I need to look at it as I originally did, a long term retirement investment.

Thank all of you for so many great responses. To sum up some of the questions, I am active duty military as well as my wife. We are not in need of positive cash flow which is why I refin to the 15 yr streamline. However, my goals have changed since o began my research in becoming an REI and positive cash flow seems to be the goal. The house does help bring down my taxable income and after reading everyone's responses I am now thinking I maybe breaking close to even when considering the taxes. Repairs are my only expense for the property the pm fees is included in the dollar amounts previously mentioned. Utilities are paid by the tenants and the yard is their responsibility as well. I think I will stick out the current situation after looking into the taxes and insurance possibilities. Everyone is very professional and helpful in BP and I want to thank you all for being so welcoming.

Currently I have a home in Alabama on a streamline va loan that I recently refinanced. It is a 15yr loan at 3.25% and the balance is 119k. The nearby comps indicate that I'm about even. I collect $765 a month after pm fees and my mortgage is just under $1000. Any ideas to bring it to positive cash flow? Or at least break even? Every six month I'm knocking $3500 off the mortgage and in about five years I could sell for a profit but I rather not continue paying $200 a month in the mean time. The option to do away with the pm is not practical I live in Washington. I thought I had a good idea by doing the 15 yr refin and save $60k in interest over the life of the loan. But that proves to be wrong for cash flow and I wasn't looking into actually become an rei till recently. Thank you all in advance for advice and for being welcoming to a newbie.