All Forum Posts by: Edward Howell, V

Appt should be lender appraisal.

1316 W Pratt is under contract for 80K. I am under contract on 1320.

When I made my initial post the bank hadn’t signed off. I now have a ratified contract. It’s taken three weeks and they still haven’t signed the second home inspection extension, but they finally turned on the water and the home inspection is Tuesday at 9:00am (water wasn’t on the first time). My lender can’t do the appt until after the inspection, and contract states all utilities (water) must be on. Is it worth the extra money for the infrared/thermal, or are they charging me for something I can do on my iPhone?

https://www.century21.com/property/1320-w-pratt-st-baltimore-md-21223-C2180355185

To me it doesn’t look that bad. Initially I was *** u meing based off of bro science 20K in repairs. Obviously, that’s assuming all the major systems/structures are intact. Now I’m starting to think I need to plan for the worst and double that. Bro science!

I’m thinking I need to bring in a structural engineer. I’m thinking I might be looking at a rewire, or at least some sort of electrical upgrade. Probably a new roof. Definitely a new furnace (at some point, if it ain’t broke don’t fix it?). 

I literally called like 20 banks before it dawned on me to call the people I bank with (PNC holds their own paper). The current purchase price is 41K. 20% down 30 years @5.38%. P&I are going to be somewhere around $185 and current taxes are upwards of $300 a month. The upside of this hold up is that hopefully, this will push closing into next year. I’ve read that if you purchase a home between 1/1 and 6/30 of any year you can immediately appeal the tax assessment. Current assessment is 158,000 taxes are $3800. The land is valued at 60k. Will that change based upon lender appraisal/purchase price? I’m paying 41K. 1320 is under contract and I hope they got the whole 80K! 

The listing says it’s a 3/2.5, but in actuality it’s a 2/2.5. Am I unreasonable in asking for a 5K reduction? No never killed anyone. I’m still aiming for $1100-$1250 a month, but losing a bedroom is huge. Worst case scenario I make it a live in flip, and rent out my primary residence. I’d have to stay in my PR until 5/11 to hit the two year mark, but refinancing my car will cover P&I on the Bmore house. I also look at appealing the tax assessment as a cash flow increase without really doing anything.

This is my first one, so, I ‘m basically going in accepting that absolute worst case scenario... Exhaust my contingencies and see what the lender appraisal comes back at? I’m thinking I should be somewhere around 1% (pending HI and rerunning the numbers down a bedroom), and I see room for appreciation (gravy). I like the Union Squre Hollins Market area. I’m pretty sure you can see the Raves stadium from the roof, and it’s a stones throw from downtown Baltimore/ the inner harbor.

Any and all input is appreciated. Thanks!

? Sorry

@Edward Schenkel

I'm currently under contract on a REO in Baltimore. I have a (10) day home inspection contingency starting at date of ratification. The contract also states that the utilities must be on for the time of home inspection.

They signed 11/16/17 and sent it at night. I didn’t receive it from realtor until 5:38am 11/17/17. The dewint didn’t occur until 11/20/17. 11/20/17 I submitted an addendum for an extension because of the time they took to do the dewint and Thanksgiving was Thursday. I still haven’t heard back in regards to the extension. 

That being the case I scheduled an inspection for 9:00am this morning. The gas and electric are on, but no water. I want the house, but not if I can’t verify that there isn’t some massive leak they are trying to hide.

My EMD is $1000. Enough that I want it back, but not enough that I'm not willing to throw good money after it if I can't work something out with the bank. Hopefully, I have provided enough information. Where do you think I stand in terms of my contingency and EMD.

Thanks!

Eddie

@Joseph Abad I’m hoping mainly cosmetic. The windows look good. I don’t know about the roof. It needs new carpet in the living room. The stairs need to be sanded and refinished. Some new appliances and paint. No A/C. I still have the home inspection and the sum total of my estimating knowledge is bro science and I’m reading J. Scott’s book on estimating rehab cost.

@Ned Carey

Thanks for your response. I was told to think of it like a pizza. Union Square is the cheese. I’m buying in the crust, but I think I might be where the sauce meets the cheese. The house two doors down is for sale and they just dropped the price to 80K. I doubt they’ll get that. I think my unit is in overall better shape. The listing says Pratt-Monroe, but it’s technically in Union Square historic district for chap purposes. 

I think I might run into issues with financing. I’m pre qualified @70K based on income and OT, but I don’t think I have formal preapproval. My lender says the property needs to be move in ready, but I’m rolling the dice. I’m currently looking into homestyle loans. I think this is what replaced homepath loans?

@Shawn Clark

Thanks for your response. I have budgeted for property management and have been reading the treads. I sent a prequalification letter. Maybe that's why the bank is taking so long to sign the contract, because I don't have a formal preapproval? I'm not sure it's really a done deal yet. They asked for a picture of my EMD, but I'm not mailing the check until they sign the contract. Fingers crossed!

So, maybe I know enough to think I'm right, but not enough to realize I'm wrong. In all fairness I have listened to every episode of the podcast, many of them multiple times (even the boring ones). You pair that with my PhD in bro science, and I know just enough to be dangerous. My name is Eddie. I live in East Manassas Park, VA. I purchased my primary residence with the intention of house hopping and renting it out, before i discovered BP. To the point: Basically, I make a pretty good W2 income, and get paid to listen to BP all day. I plan on moving forward with my house hopping strategy. However, I live in NOVA DMV. There isn't anywhere for me to move. I digress and I'm long winded. Back to the point: Coworker lives in Baltimore (union Square), has a house warming. I realize he paid like 60K less and got way more (previous owner way overspent, wolf stove, spiral staircase the whole nine). My jealousy and envy compel me to start scouting the area. I like the Union Square Hollins Market area. I spot a doll house, view it, think about airbnb... I could make it work, but I'd be making it work. At the same time , not only does the 90 day challenge put a battery in my back, but a mentor falls out of the sky. I zero in on a REO right around the corner from my friend. I know what he paid for his. I know his income. I know hes bought in for at least the next 5 years. The demographics are working in my favor. The place doesn't look that bad. The bank wanted 44,900. I initially offered 39,500, they countered at 43K, I countered at 41K, they accepted. I wanted to offer less, but I let the realtor talk me out of it. The listing says pending, but they haven't sent back the signed contract. Hopefully, they will tomorrow. I'm estimating 20K in repairs, ARV of 75K, $1250 rent, $162 monthly P+I@ 5.38% over 30 years (called like 50 banks to no avail, decided to call the bank i keep my money in and found out they hold their own paper). Currently it's assessed @ 157K, 60K in the land alone. I'm looking at it like between it being a REO and appealing the tax assessment. I can force equity/cashflow without actually doing too much. I'm looking at it as a long term rental. Still waiting on the contract, but I have Michael D. Pachino tentatively scheduled for the inspection. I have financing and inspection contingencies. What am i missing? Please feel free to rain on my parade. Any and all input is welcomed. I close 12/27/17. Help!