All Forum Posts by: Eric Bette

Hi All-

I'm preparing to buy my second SFH in the next 6 months or so, provided the right deal is there. I really need some help regarding the best way to posture my finances in the meantime so I'm ready to take advantage of a deal when I find one.
I want to be able to fire off cash offers, and, since most sellers won't accept brokerage investment account statements as proof of funds (and because I've gotten burned using stock to buy a house with cash before!), I want to start holding a modest cash reserve in order to buy real estate with, when the time comes. 

SFHs in my market generally go between $85k and $125k. My goal is to hold $50,000 as a cash reserve, and rely on a 401(k) loan to cover the rest. 

Is this too much to just be "sitting there"?

I'm strung up right now because most of the (non REI) guidance I've found is to only hold 3-6 months of living expenses as a cash reserve. In my case that'd be ~$10,000, not nearly enough to actually using up front on a real estate purchase. Not to mention, I'm not planning on having this as a "rainy day fund", which is how most traditional financial advice will see a cash reserve.

How would you hold this cash? 

I've seen conflicting advice regarding putting this money in a high yield savings account vs. a money management account, but I'm leaning towards the savings account because of the higher APY, and I won't be affected by transaction limits or ATM accessibility. Are there any better options for holding cash? 

Part of the reason that I'm confused here is that I've competed with investors for higher price point properties (>$200k) and have been outbid by cash offers. Do some individuals really just have $200k cash sitting in an account somewhere waiting to be spent? Or do they have some other highly liquid financial instrument they can use in these situations? 

Thanks for any and all insight here. Looking forward to the discussion. 

Eric

Hey BP community!

I'm working on getting my first North FL SFH appraised/rented and need to get the lawn cleaned up and some furniture installed before the appraisal gets done.

Does anyone here have a great person they're working with to get lawn care or odd jobs done? I'd love to hire the same person here to do both, if possible. 

Thanks, everyone!

Hey BP Community-

I am in possession of my first SFH in the Jacksonville/Murray Hill neighborhood, and am now working on getting the property refinanced as well as finding a great PM to take the wheel.

So far, I've narrowed my options down to 2: 

• Lighthouse PM and Realty
  • Comes highly recommended from 2 sources
• HomeRiver Group
  • Has substantially more competitive rates

Right now, I'm leaning more towards Lighthouse, since I'm more than happy to pay a bit more per month (the property should cash flow positively with either company) to work with a company that comes highly recommended from sources that I trust. 

But, I do want to check here and see if anyone has any experience working with HomeRiver before? The rates are appealing, but I'm a bit concerned that this could turn into a "you get what you pay for" type situation. If you've worked with them, what was your experience like? 

Thanks all, I appreciate your help ahead of time. 

Eric

Thanks for the tip, Shaun!

Property isn't currently rented and the appraisal is scheduled but hasn't been done yet, so no rent roll. 

I put in the minimum of what I expect, which will still easily cover 1.5x of the monthly debt for the loan. Will adjust based on how the appraisal comes back. 

Have a great day too. 

@Justin R. @Enrique H.

Thanks both for excellent advice, this is extremely helpful. 

The lender asked that the letter was signed and dated, so I quickly wrote up a business doc stating my intended monthly rent income, signed, dated, and scanned it over to them. Also told the loan officer that if I was missing something to let me know and I would get it taken care of. 

Thanks again for the help here. 

Hello all-

I'm in the process of getting a mortgage into underwriting as I'm negotiating the final details of a property I have under contract (closing on 2/15). 

The lender is requesting "letter stating the amount of rent you anticipate collecting for this property."

Could this be as simple as, "I, Eric Bette, anticipate rental income totalling $XX,XXX dollars per year from the property at 123 ABC St" ? Or is there a template I should be working from. 

Thanks for any input here. 

Eric

@Jay Hinrichs

Cool, thanks for the info, Jay. I've reached out to the loan officer for clarification. 

Eric

Hi Everyone-

I'm working on securing financing for a deal set to close on 2/1. It's an $80K deal, and I'm moving forward with conventional financing with 20%, for a total loan amount of $64K. I've decided to buy down the rate for 1 point, as discussed with my loan officer. 

The loan package came across from the bank today, and the pre-paid interest is listed at $800, whereas my understanding is that the point should be only charged on the mortgage balance/loan amount of $64K (for a $640 total). 

Was my understanding incorrect of was there a mistake on the bank's part? 

Thanks all.

Eric

@Ryan Robbins thanks for the referral. Much appreciated. 

@Matthew Miller I've got your info in my messages. We'll be in touch soon!

Hi Everyone-

Long story short: earlier this month, I began making offers on single-family homes to rent around the Jacksonville metro area. It's a short matter of time until I buy and I'd like to have a good relationship with a great Property Manager so I can hit the ground running.

I'm going to be buying at least 3 doors in the area this year.

Do any investors in the North Florida (Jax, Orlando) area have any referrals or recommendations for good management companies. I'd love to hear your experiences.

Thanks all.

Eric