All Forum Posts by: Grace Fukuda

Hello!

My 4th rental property is finally closing this week!

This a duplex, 1600sq, one unit is located 1st level, and the other unit is located 2nd level. The utility work has not been separated yet which I am going to do first thing.

Purchase price: 161,500
Down payment: 40,375 (25% down, 3.5% for 30 year)
Closing cost: about 7,000 (I have more exact number but it went somewhere – I paid 1.5pt for lowering the interest rate by .5%)
Expected rent: 1200 lower unit 800 upper unit(because 1) the meter is not separated and 2) harder access to go to laundry, located in the basement.

I like this property a lot just because this place is located very close to me! – it takes less than 5 minutes of driving from my house.

Now I have concern:

#1

I submitted an offer early in May but there was some delay closing the deal due to appraisal result. Because of that, I had to find another lender to move forward.

This property has some appraisal issue at the first time due to duplex issue. What I was told at that time was “This unit was grandfathered to be converted to a duplex but once the house is burnt down, the property cannot go back to duplex. It can only be a single unit once it is rebuilt.”

The second appraisal also approved its value in condition of “removing the front door (there are two doors at the entrance to show duplex) and kitchen on the second floor.”

Before closing, I was going to call building department of city to confirm it should be built for single unit. I wonder if that would be a red flag for the future maintenance issue.

Do you guys have any experience similar to me? If so, what could be the best way to prepare in case of any issues?

#2

I would like to increase the upper unit’s rent. Currently they are all vacant, so I have some time to work around before listing for rent. All appliances are stainless steel, and this unit has good lighting. One little touch up I was considering was to install a separate electrical so that the tenant does not have any issues.

Also the inspector pointed that the shower of upper unit is not waterproof. I am going to touch up that for the first thing. I wonder what would be other possible rental increase way to maximize the profit. Any suggestions..?

Hi Theresa,

I never started making a will yet, how do I start off the investment property in this case? Do you have any recommendations?

I may have said it confusingly. If my husband only is in the loan, all the money has to come from his account. But the money I deposited to my shared account a week ago, originally designated to my name. 

Hi Wayne,

Yes I would like to keep me out of the purchase although the title is under my name too for the future purchases. I am just wondering if there is any possible options available.

I and my husband are buying our 3rd property(a quad-plex); its closing date was targeted on 9/27. We wanted to process the financing as primary residence due to its extensive rehab.

The title will be both of my name as well as my husband’s. Loan will be processed under his name.

However the underwriting company declined our loan application. Therefore, the only option we have was to proceed it as an investment property as the loan broker person advised. During the process, we were told there no gift money option – all money came from my husband’s account.

I have about 60% of down payment under our shared account, and my contribution of 60% is not acceptable. In order to do so my name also needs to be in the loan with my husband’s. My credit score is around 100pts lower than my husband’s.

For the 168,750 loan amount(purchasing price 225k, 25% down), here are what my options to proceed.

• #1 both, 4.625%, 30 year Closing cost: $67k, payment 1357.66
  #2 both, 5.625% , 30 year closing cost: $65k, payment 1461
  #3 both, rate 4.5%, 15 year Closing cost: $65k, payment 1781
  #4 Husband only, 4.625%, 30 year Closing cost: $65k, payment 1357.66, but all account needs to come from his name. no gift money from me

I would like to go opt 4. The condition for opt#4 is to wait another 60 days. My husband has 401k acct covering my portion; I do not want to pay any surcharges or fees from withdrawing. I am willing to proceed getting a loan. We already used and have an outstanding loan used for purchasing our first property.

All covering down payment is in our shared account. Some checks in shared account but written to me were not acceptable according to the mortgage company. In order for me to proceed the loan to process here are what I think I have as options:

Opt 1: wait another 60 days and close the property
Opt 2: pay the outstanding loan (around 17k) and get another loan
Opt 3: to transfer the money from shared account to my husband’s account? Is there any way to proceed opt 4?

I have been paying 15 year because it shows better interest rate as well as more equity it will generate. I would definitely do 30 year option for my investments though.

Hello,

I am in a contract a quad-flex property D priced 225k - inspection is completed, and in the middle of finding a lender. I've already spoken with my local lender but I realized I am short in down payment of 25%(around 20-30k to be safe). I wanted to get some cash out (around 100k, a month ago) as a BRRRR from my two investment properties, and used them as a down payment. However, that plan did not work out. The appraiser valued those properties for around my purchase price (which was 27k and 33k.).

My loan officer advised me to cash out refinance my current house A to purchase quad-flex D. Since I have around 140k equity, that should be enough to cover my down payment and others can be used my future property purchase.

My initial intention was to purchase D using refi money from B and C. However, I think I need to focus on repairing those two before submitting another loan application. Partially roof repairing is done. I need to do more flooring and other little minor work.

At this time, my local lender advised me to refi current house A to cash out 75% with 3.2% 15 year loan. That would cover to pay my current loan (3% 15 year, 5.5% HELOC, and etc.). Before proceeding, I want to confirm with you guys if my thinking strategy sounds ok.

Any advice on this matter is greatly appreciated!!

Thanks,

G

I'm in three, please let me know when and where.

I think having a job related to real estate for you would broaden your idea of where to start off. good luck with your future rentals!!