All Forum Posts by: Heath Watson

I found a duplex off market in my area for only 100k, one bed one bath units one side done other needs work. rents are probably only 550-650. Lender said it would be 15% down with a 7.6 interest rate, but she told me points were so high so closing cost would be really expensive.

Quote from @Eliott Elias:

Ask where the points are going. Are they buying down your rate? Or is he just charging crazy points himself 

 I did not ask where they were going, but i will ask though. 7.6 is the lowest
rate they can get me and she said that was with like 4500 points or
something. Im still newer to this so didnt understand points, but she basically told me closing cost would be really expensive around 9k.

She said i would have to pay like 4500 points with that interest rate which i don't really understand points because im newer to this. But she was basically telling me im going to have to pay a lot more in closing cost.

Quote from @Galen Ikonomov:

That is actually not a bad deal for an investment property.

First, it is really hard to get a property intended for investment with only 15% down nowadays.

Second, the interest rate they quoted you is close to the rate on Primary Residence loan right now. Paying 2-3 points for an investment property is not a surprise. The lenders want mitigate the risk of you defaulting on the investment loan by collecting money upfront. 

I agree it usually 20-25% for investment property. The interest rate is about normal atm i agree also. Just worried the up front cost isn't going to be worth the headache of still having to renovate a unit or isnt going to be a good ROI. It will cost me 15K down. Which at that point i mise well put 20% to not pay pmi. So then your looking at 20k not including closing cost and repairs that need done to other side. With only renting for 550-650 per unit.

Quote from @Matthew Gaddis:

Are you buying it as an owner occupant or is it a conventional investment loan?

I would have to buy it as conventional investment loan. I already have primary residence, but i thought if I could live in while renovating that would be best option but i don't think ill be able to do that.

I recently had a real estate agent bring me a deal on a duplex that is

off market. 2 bed 2 bath brand new hvac, blown in insulation, new

windows, new siding. One side interior not completed other is ready to

go. He does have a lot of materials for the other incomplete side. 100k

they want for it. My lender called me this morning and with 15% down

said it would be a 7.6 interest rate but i would have to pay SO many

points to acquire the loan so closing cost will cost me like 9k. What

would my best option? My credit score was 762 and I'm coming up with

15%. The units are only 1 bed 1 bath, so in the area could only rent

from 550-650 most likely.

I recently had a real estate agent bring me a deal on a duplex that is off market. 2 bed 2 bath brand new hvac, blown in insulation, new windows, new siding. One side interior not completed other is ready to go. He does have a lot of materials for the other incomplete side. 100k they want for it. My lender called me this morning and with 15% down said it would be a 7.6 interest rate but i would have to pay SO many points to acquire the loan so closing cost will cost me like 9k. What would my best option? My credit score was 762 and I'm coming up with 15%. The units are only 1 bed 1 bath, so in the area could only rent from 550-650 most likely.

Thank you Dion! I really appreciate the tips. Yeah I need to focus more on getting it under contract. I made and offer just waiting to hear back from the owner. He wanted to “ponder” it last night. I work a paint company so I do know quite a few contractors. The home didn’t have major issues more of just needing a complete update. Thank you again for the tips! 

Quote from @Jim Pellerin:

Quote from @Heath Watson:

Im located South of St Louis. Ive never done anything like this but decided to do some investigating on a home in my area that has been empty. The owner lives out of state and is ready to sell. Similar homes comp for about 160 completely fixed up. Im hoping to get under contract for 55k and possibly either just wholesale the property or maybe find a partner to flip it with. Just looking for some information since im trying to get my foot in the door of real estate and kind of new to some of this. The home needs updated from roof to hvac but it a nice split level with garage on a corner lot. 

Thanks, Heath

 @Heath Watson In my opinion, wholesaling is the best way to get started in real estate if you are looking for short-term income. Or you can partner with someone to do a flip. So I like both options for you. Kepp doing it for a year or so or until you make about $100K then use your profits to buy a loing-term wealtrh building asset.

Thank you Jim! Really trying to transition from my 9-5 into Real Estate so I’m going to try and start out wholesaling. Maybe get a couple deals under my belt to get confident but I really want to go all in at it and I am in the position too. Just hard transitioning from steady income to making that check yourself.  

Quote from @Chris Davidson:

@Heath Watson to flip it you have bring someone on and take on more risk. I would find what your as-is value is and see if that is enough for you to just wholesale it. Also if you can't wholesale it then bring on a partner and flip it. Look for buyer's and look for partners and go with what your gut tells you feels right.

Best of luck way to go man hope you get it under contract!

Thank you Chris! It’s hard to find people to work with. I was wanting to try and do the deal with some local realtor/flippers I know but they just want to pay me a Bird Dog fee for getting the deal and I don’t want to cut myself short of profits. I appreciate the insight I’m going to try and wholesale it like I planned from the beginning to get a deal under my belt.