All Forum Posts by: Garrett Christensen

2-4% is not a bad estimate for closing costs in most cases. There are a lot of variables that can change that though. There's also a difference between the total Cash to Close and Closing Costs. Typically the largest dollar amounts for your cash to close are the following: Downpayment, Lender Fees (points) this can include rate buydowns, Title Insurance, and Appraisals. There are many many other ones, but they are typically smaller ($50-$300). Those can add up though. 

Next time I would recommend going over a preliminary settlement statement with your agent and/or lender. They can explain each line item and tell you where you could potentially save some money.

Here are my thoughts on all of this.

-0% Interest is not easy to find so that's a big plus for #1. 

-I'd say both markets are strong rental markets so that's a wash in my opinion. 

-Neither of these options cash flow which isn't ideal. But #1 would be cash flowing after 5 years so as long as you can make the payments for those 5 years that one is a better option in my opinion. 

-Putting the lowest amount down isn't always the better option especially when there is no cash flow. Run your numbers and check your CoC Return (Cash on Cash). There's a good chance that it's actually higher at a higher down payment.

Feel free to message me if you have specific questions about any of this.

I believe it's possible, I've always done it through Zillow, Rentler, or my property management software. It is possible to get it directly from one of the credit agencies (Equifax, Experian, TransUnion). You'll need written permission from the potential tenant and there may be some fees.

Analysis paralysis and then you finally accept an applicant, but they've found another property.

I think every market is going to react differently in this downturn. Some will, and are, already being hit harder than others. So the first thing is to make sure you look at your local market stats. Ask your Realtor for that data. Second, I personally wouldn't give up a good interest rate right now. I'm not sure how low yours is, but we likely won't get back to the sub 3 levels for a very long time.

If I were in your shoes, I'd do everything I can to just save up for the next property without selling the first. You may want to consider a small HELOC in order to get into your next property quicker. Just make sure all the numbers work. Hope this helps.

Typically the purchase contract will spell out what your obligations are for keeping the existing tenant. Likely you'll need to honor the existing lease if there is one. If not, then there are also going to be other laws surrounding how long of notice you'll need to give them if you want them to move.

What I would suggest, if you even have the option of replacing them, is just to have them apply as if they weren't living there. Have them fill out an application, run background, etc. Just communicate well with them why you're doing this. If they qualify, it's much better to keep them than to have a turnover. It's also probably best to not charge them any application fees and give them as much notice as possible with all of this.

If you treat your tenants right, they'll usually treat your property right.

My biggest regret is that I didn't start while in college. That is an excellent goal. My advice would be to make sure you have a good idea of what the maintenance and cap ex expenses will be. From my experience, most investors aren't setting aside enough. Also, find a good agent, one who invests in real estate themselves. They will be such a great resource to you.

The other thing I'd say is to make sure you're comparing the alternative of renting while in college. Yes, it's good to get into a property, but don't jump into anything. Do a very in-depth analysis and make sure it's truly a better plan.

Finding a contractor who will stick to your budget can be super tough, especially if your budget is unreasonable, but here are some tips to help you:

1. Get recommendations: Reach out to friends, family, or colleagues who have done similar projects and ask for recommendations for reliable contractors. You can also check online review platforms such as Yelp, Angie's List, or Houzz for reviews and ratings.
2. Talk to Supply Houses: Many supply houses for parts and materials can make recommendations for contractors they work with. These ones tend to be ones that are consistently doing jobs and are big enough to get discounted materials vs a small handyman just going to Home Depot.
3. Ask for references: Ask the contractor to provide references of clients they have worked with in the past. Reach out to these references and ask them about their experience working with the contractor and if they stayed within budget.
4. Get multiple bids: Obtain bids from at least three contractors for the same scope of work. This will help you compare pricing and ensure that you are not being overcharged.
5. Communicate clearly: Throughout the project, communicate clearly with the contractor about your budget and timeline expectations. This will help ensure that they stay on track and within your budget.

Remember, the cheapest contractor may not always be the best option. It's important to balance cost with quality and reliability to ensure that your project is completed to your satisfaction.

Yeah for that reason I use Zillow and Rentler over other products. The one-time fee is much more reasonable for tenants. Honestly, sometimes I don't even do the credit checks and whatnot. I think what's most important is what their past landlords say about them and their income compared to the rent. (3x income for example). 

If you want for sure want the checks then I would suggest using Rentler or Zillow, or both. You could also do a prescreening questionnaire that is free and then only have your top applicants pay for the background check. I just feel bad when people rack up hundreds of dollars in application fees alone. Filling properties is like a marketing funnel, so you don't want to turn away people at the top level because of application fees.

Most people don't take out the principle. The mortgage payment as a whole is seen as an expense. Principle paydown is seen as just a bonus and is fully realized and accounted for when calculating equity, selling, or when doing a cashout refinance.