All Forum Posts by: Hoi L.

First time investor, hopefully the start to long term financial independence.  

As someone starting out as long term buy-and-hold rental investor, we are looking for relatively good conditioned places in $125-300k/units.

HELOC terms: all fixed with 80% LTV for my primary residence

$160k available to take out from HELOC; also another $150k in current bank accounts

5 yr at 2.25% (~$2900/month in P&I payments)

10 yr at ~2.43%

15 yr at ~2.65%

30 yr at >3.15%

Question:

Which HELOC terms would you recommend?

Lowest APR/length with highest monthly payments or take 15 yr (30yr apr is too high in my opinion) for lowest monthly to maximize monthly cash flow to save for future additional properties?

thanks so much!

Update: sounds like the seller will "try" to have items listed by the local township U&R (use and residency?) repaied by 9/13 for township re-inspection and not my inspector with previously anticipated closing date 9/14:

- furnace repair

- *electric repair

- *basement smoke detectors replaced

- *2nd floor bedroom battery for smoke detector

However, the local U&R requirement is just for safe occupancy and certainly not to the standards of this house at the time of sales agreement (house was agreed to over asking, AND above market value locally due to its great condition prior to the flood), and PA Agreement of Sales specifically states ("home must be in condition when it was agreed to").

I have had numerous emails/info exchanged with my lawyer now.

Any recommendation, pointers, insights?

thanks!

The seller does/did not have flood insurance.  Surprised since it flooded in June 2021, but it seemed like he "learned" by trying to get rid of it ASAP after June and didn't expect another major northeast storm to cause even worse damage before the house closes in 2 weeks.

I too agree with you that the probable good +cash flow will not be worth the headaches/possible loses down the road in the long run.

 Flood took place the evening of 9/1 with cresting on the morning of 9/2.  I asked my agent to contact them ASAP to allow us access to view the place on 9/4 but denied until 9/5.  My agent told me that when she arrived outside on morning of 9/4, he was seen through the basement window cleaning up as much as he can.  However, he never put a sump pump in the basement, and if 8 feet of muddy water was drained within 48 hours without any obvious industrial pumps, I can just speculate that most of the water "seeped" back into the foundation, leaving the sediments.  A few of my wife's pictures taken on 9/5 showed cracks on the cement floors (obvious that I know I didn't notice them when we first saw the house on 8/15), a ~8" chunk of cement missing from the 6" thick foundation pads on which the oil burning furnace sits, with the HVAC 8" inlet metal collar on it rusting already.  Walls were already bulging inward into the basement.

I am a very raw newbie in this and I do not feel comfortable picking up the pieces of this house.  2 major floods in 10 weeks and causes were due to geography (not flood zone, just street sloping), it will flood again.  Probable rent is ~$1300-1500/month (if we are lucky to get tenants now) and flood insurance will eat up at least $100-150 monthly.

Thank you for your advice and insight!

First post and hopefully this site will steer us to a path of successful real estate investors.

A quick few facts about this house: a large house (4+bedrooms/1.5 baths with central air: a perk in this section of neighborhood) located in a small low-middle income town outside a large city in the Northeast that is projected to provide a +cash flow for years to come.  It was nicely updated, priced right, and it received multiple offers within 5 days of listing; we waived mortgage/inspection contingencies with closing date on 9/14/21.  It was affected by Hurricane Ida, and the street was flooded with up to 8 ft of water.  This house's basement was flooded to the ceiling, submerging the oil burning furnace, heating oil tank, security system panel, electrical panel, and water heater.  We took a look at the house yesterday (entire block was closed off from traffic for the clean up and dumpsters, etc), and not only is the electrical panel cover rusted, but I am sure the HVAC ductwork/furnace/water heater were also all submerged, along with the central AC condenser outside the house.  In addition, we also noticed a wall is "bulging" with signs of the foundation behind it pushing on the drywall/cement.  When it was pointed out to the seller during the walkthrough yesterday, he answered that he will "tap it back in", as if he has done it before.

In the seller's disclosure, he marked "No" on any history of walls/foundation shifting, movement, deterioration, past or present.  In addition, when he answer "Yes" to any history of seepage/water to the basement, he stated that "street flood due to clogged street stormwater, June 2021".  From the topography, it is obvious that the storm water flood on the street was due to a heavier than normal thunderstorm and not due to "incidental clogged" storm water drain.  The same street was flooded in 6/2021, as later found out by us this past few days.

With many components to replace/restore back to "agreement of sale" date condition, (electrical panel replaced/inspected; basement windows grouting/pointing washed off; HVAC system; all the wood/drywall, etc), it is likely he won't be able to get everything done by closing date 9/14.  With all that's happened, I am not sure I want to deal with a house that has just been completely flooded in the basement (8 ft high water!).  

Do you think I should back out and get my good faith deposit back and if so (I am 90% wanting out), do I have any legal recourse?  Do I use "Force Majeure Clause"?

Thank you for all and any advice.