All Forum Posts by: Greg R.

@Dan H. thanks for sharing your experience about the trials you experienced. Not at all fun having to rely on other people's eyeballs and vain promises. However, sounds like you have some amazing beachfront properties. 

The way I evaluate deals, I'm not seeing the appeal here. Assuming purchase at 2.4m, P&I will be roughly $8,500 per/mo. Once you layer in property tax and insurance, you're going to be over 10k per month. According to the listing, gross annual income is 141k. 141k-120k = 21k gross annual revenue. 21k gross annual revenue for 480k down is about 4.3% cash on cash. That's assuming there is no vacancy, repairs, or other unforeseen expenses. For an investment of almost 500k I'd be looking for a much better return than 20k a year. 

And I agree w/ Tom, as rates increase values are likely to decrease. 

What is your strategy here? long term rentals, STR? Are you planning on occupying one of the units? Looking to hold and sell in a year or two, or hold for the long term? How much are you putting down? What will COC be? Would need to better understand your intentions to offer an opinion.

Hey @Alex Sabio, in regard to So Cal are you referring to home prices, regulations, or something else? Mine in San Diego is knocking it out of the park. Barrier to entry is certainly tough in this market. 

I have one long distance STR and it's undoubtedly more difficult to manage than my local one. I'd disagree with the statement that STR management from a distance is "so easy." Definitely not impossible, but there is a clear advantage in being local. I'm not discouraging long distance STR management, as I plan to do more. But for someone starting out, I would strongly recommend learning the ropes with something easily accessible.

I don't know a lot about the FHA product, but I think they carry PMI. For that reason I would explore a conventional OO loan, maybe you can get away with 5-10% down and also do a PMI buy out to avoid monthly PMI payments.

I would recommend going on Airbnb and using "flexible dates" and try to find the units that are most occupied. No need to reinvent the wheel, see what's working in your area.

Greg

Hi Corby,

Thanks for the time & response. Unfortunately this deal will eat up all of my VA entitlement. Being in San Deigo CA, prices are very inflated. Even with the low appraisal, this deal will result in a 975k loan amount.

I'm considering moving later in the year. If that plan comes to fruition, I was going to buy conventional at my new destination. However, I'm thinking that if I take this deal (975) loan amount, if I could refi in a few months into conventional that would allow me to purchase my next property with the VA loan rather than conventional.

Greg

Hello all,

I am currently working on a VA cash out (100%). Unfortunately, I got a really bad appraisal, probably about 15% low. I was considering going with another bank and trying my luck on another appraisal. However, I got to thinking and was wondering if I should maybe just run with the current appraisal, pull out the cash as intended, then refi into a conventional loan to free up my VA eligibility for another purchase down the road. In this scenario I'll have a lot of equity which should allow me to refinance into a conventional loan (and hopefully not need PMI).

In this scenario, how long would I have to keep the VA loan before refinancing into a conventional? I think I've heard 6 months in the past, but not sure if that's still applicable.

Any input would be helpful.

Greg

That's the thing... there's not a lot in the back yard of OC/ So Cal that can be bought up for 600k. You could snag a condo, but you would be at the mercy of the association if they decided to ban/ limit STRs. I know prices are up everywhere, but coastal California is a different beast. 

Regardless, I totally agree with your sentiment about staying close to home. Perhaps Nevada or AZ (Yuma?) might not be a bad idea. Although there are some cheaper places in Joshua Tree. 

Hey John,

Great topic. I used to deduct as much as possible to soften the blow. However, this did come back to haunt me on a deal that I closed a couple months ago. I ended up finding a different lender who was able to make my DTI work, but the first lender was convinced that I was negative cash flow on all my properties and couldn't get my DTI where it needed to be.

My understanding is that for any loan, banks are going to be looking at your last 2 tax returns. I suppose if you're not looking to purchase anything it should be open game to write off as much as possible. I talked to my CPA last week and had this convo with him. We agreed that he is going to crunch the numbers, but before filing we're going to run the return by my loan officer to get his advice. If he tells me that I can write off more, I will. However, for qual purposes I want to make sure that I'm showing adequate income. 

Greg