All Forum Posts by: Eric O.

Good things to think about. We'd get HELOCs on all the properties and continue to grow our portfolio. Does a HELOC show as the property is fully mortgaged even with no balance on HELOC? I believe it does, correct me if I'm wrong.

We couldn’t take the value of the condos and get anything better for the returns they’re giving us right now. I’ll have to run some models on what it’d look like to break the proceeds down into down payments on more rentals. I just have never gotten the numbers to look attractive on SF.

One reason we did condos is all the numbers involved are a lot smaller. Easier to qualify for. Not as scary to start out with. 

Condos are frowned upon on this site but it’s given my wife and I a huge leg up in life in owning just five (flipped two) since beginning investing in 2016. They might not be the best but they are an alternative to growing your pockets and can be a good starting point into real estate investing (for those reading this that are new to investing).

We sold our former primary residence with the proceeds being tax free. I want to make sure I’m making the right investment with the proceeds. We own three condo rentals which are all financed on 10-yr loans. Very small cash flow per month on them when financed. Goal was to start living on the rental income when the mortgages were paid off. I am 40 years old.

With the proceeds I was going to pay off all three mortgages on the condos. The annual net return would be 15% a year. That’s the best decision I can do with the money, correct? The cap rates are at 6%. I wanted to bounce the idea off of someone else. 

One credit union I use is America First. It’s quoting me 3.125 for 10 year loan on investment property. Has points. I just closed on a conventional 6 months ago on one of their 10 yr loans on another condo that I rent out. I got 4.0%. I’d include financing in the purchase so I could get the 3.125 but seller wants to move quick. 

It’s a 3/2 condo in Glendale, AZ. We’ll be looking to get 90-100k loan on it. 

So we pay cash for rentals using a HELOC from our primary residence and then obtain financing on the property after the fact. Proceeds from loan pay off HELOC. How do we get competitive 1st mortgage finance rates? I have used a couple of credit unions who lend on investment properties and they will only allow me to get equity loan on paid off properties with loan rates around 6%. If I were to buy property using their financing, instead of paying cash, it'd be a conventional mortgage with rates around 3.25%. We buy with cash so we can act fast and to make it attractive to seller. But then can only get a 6% loan? This doesn't make sense to me. If my offer included traditional financing I could get 3.25%. What do I do? Finance to 6% equity loan to put a loan on the property and then refinance to 3.25% conventional financing? Seems like a pain. Am I using wrong lender? Thanks for responses.

Hi all. Forced sale went through in January. Buyer’s appraisal was 72k. I got my own which came in at 82k. I held firm and buyer raised asking price to 82k. I didn’t have time to do 1031 exchange. I was satisfied with the results.

I will be needing financing for a new primary residence in AZ. Past lenders I've used had overlays in which they would not allow rental income unless it was on tax returns for two years. Several of my properties I've had less than a year. I'm looking for recommendations of lenders who will allow this rental income in DTI ratio during qualifying. Thank you.

@Sean Mcintire

Buyer purchased 130+ condos in the complex on 10/23/18 for $9.49 million. I believe it averages out $70k per unit.

My wife and I received a copy of the condo termination agreement just today. It lists appraised value of the the 40+ condos that will be acquired from buyer. It also has an appraisal report for a condo that has the same floor plan as ours, but not our exact condo. The termination agreement lists that all 2 bed 2 bath, including ours, will be sold for $72k. Then it goes on to include language about how we can get our own appraisal and if buyer does not agree to the 2nd appraisal price then an arbitrator decides value that it will be sold at.

Buyer made us on offer about 6 weeks ago for $77k. We turned it down.

What's interesting, in reading the appraisal, the appraiser used the 10/23 transaction as the GREATEST WEIGHT to determine market value of the condo. This smells awfully fishy. Appraiser then lists two condos that are over 2.5 miles away as the 2nd and 3rd comp. He goes on to state that since they are so far away they are not an accurate gauge of value.

In looking at comps online myself, it show two condos in the same complex selling over the summer at 89k each.

Googling the appraisers name it shows that he had a AZ Board of Appraisal disciplinary action against him in 2013 that included 6 months probation with required mentorship and education. Language in the disciplinary hearing included one board member stating "the verbiage in the respondent's report made him think that it was biased toward investors, instead of reporting the market." Sounds like that might be the case again. 

I'll look into filing a complaint against appraiser with AZ Board of Appraisal. I might be overreacting.

I hate that the other 40+ condo owners might use the value in his appraisal at the price they decide to sell at. It's as if the owners should be contacted to make sure they get their own appraisal done. I'll order and appraisal myself and let you know what happens.

Thanks @Stanley Bronstein.

The buyer made one offer of 77k. This was before the large bulk sale. Now that they have 80% ownership of the complex it'll be interesting to see what appraisals come in at. Luckily we're not talking large dollar amounts here. Worst case scenario we might end up getting 10-15k less than we thought. My wife, who is a realtor, thought it'd be best to hold out. Plus we never knew if they would indeed obtain 80% ownership or if it was a scam.

@Chris Mason

So it looks like I should find a mortgage broker that works with different lenders. That way I can find a lender that doesn't have overlays that would reject my loan application.