All Forum Posts by: Jana Crum

Everyone has given you great advice and I'd love to add another perspective. You are already on the right path by creating a BiggerPockets account. Soak up as much as you can. I'm a huge advocate for education so whether it's listening to podcasts, reading books on various investing strategies, or plugging into the forums & articles on BP, make sure to get a solid educational foundation as you start. I'd also suggest going to a few real estate investing meetups in The Valley & make some connections in the community.

If you are open to building sweat equity, I'd suggest doing a Live-in-Flip. There are always properties around the city priced for a solid Live-in-Flip deal. Plus, many cities in The Valley are exploring allowing ADUs to be built on existing properties that meet specific lot requirements. Just a thought!

1 Vote

Phoenix, Arizona

Quote from @Michael Durante:

Thanks for the input @Jana Crum! Thankfully I have enough savings to cover even the entire downpayment and closing costs if need be, but from what I read, I think I should be able to qualify for at least some DPA, which would free up my savings for other costs, like a minor rehab, etc. I really don't see the negative of the DPA since, as far as I understand, the ones I'm looking at are forgivable after a certain amount of time (~3 years) and have 0% interest and no payments. I'm aware that things that sound too good to be true often are, which is why I'm trying to investigate a bit more about the potential downsides, but have had no luck with lenders. Do you by chance know which lenders the clients you worked with that received DPA were using so I might be able to reach out to them? Thanks again for your input and assistance!

-Mike

@Michael Durante The main downside of DPA programs is that since you have no money/skin in the game you pay more interest. Typically it's either 0.5-1.0% min higher interest rate than the going market rate. That's what tends to get clients. Especially with a market rate of around the 6% area, you could be looking at 7% interest rate easily. If you message me, I can connect you with a local lender I know that does DPA.

1 Vote

Phoenix, Arizona

Quote from @Michael Durante:

Hi, sorry to dig up an old thread, but I was using the search function to see if I could learn anything about downpayment assistance options in Arizona and was saddened by the incompleteness of this topic, so I thought I might try and revitalize it if possible.

Specific programs I'm interested in are:

1. Home in 5

2. Chenoa Fund

3. Home Plus Arizona

Those are the only ones I have come across so far, otherwise I'm happy to explore other options, so any information about these or others would be greatly appreciated. The few lenders I have asked about these programs all seem to be either unfamiliar with them or reluctant to work with me on them, so information has been hard to come by.

Thanks,
Mike

Hi @Michael Durante, its great that you are looking to fill this knowledge gap. I have experience with clients using down payment assistance programs in the Valley. Which program you can use is going to be based on which county you are looking to purchase in. You can use either the Home in 5 or HomePlus programs within Maricopa County. Both programs allow you to get an FHA, VA, or Conventional mortgage. Now, most people don't realize loans with these programs STILL HAVE A DOWN PAYMENT! Essentially, if you get an FHA loan 3.5% down, and qualify for 5% Down Payment Assistance (DPA) that 5% DPA will cover the 3.5% down payment and 1.5% of the closing costs. However, I have seen where clients (due to income, debt-to-income, and other restrictions) only qualify for 3% DPA, have an FHA loan, and have to pay out of pocket the remaining 0.5% down payment and the entire closing cost. I hope that helps! Feel free to reach out!

3 Votes

Phoenix, Arizona

Quote from @Andrew McGuire:

@Jana Crum

By doing it "Live In" you are eliminating a big part of the risk, worst case you keep living in it as a primary? You are forcing appreciation through flipping while you live in so the likelihood that you are under water in 2 years in my opinion is small. Now is a great time to buy, way less competition!!!

Hi Andrew, the slow down in competition is one of the main things motivating us to buy right now! I am seeing sellers offer to buy down my buyer's rates AND offer additional closing cost concessions just to get a deal done! I'm definitely going to take advantage of that to get the best deal possible and do the best I wan to ensure a win by buying right.

1 Vote

Phoenix, Arizona

Quote from @Account Closed:

Hey Janea! From a private lenders perspective that lends on specifically flips, I can tell you that I want to be in and out in the shortest time frame possible right now. The uncertainty of the market has a lot of other lenders like me sharing this kind of thinking. I would not buy if your plan is to sell in two years, since there is a very real possibility of it not making a profit. That being said, if you plan to sell in 10-15, that's a much safer plan. You could always refinance and turn it into a rental if you want to move after a few years.

Hi Zachary, thanks for sharing from a lender's perspective!

0 Votes

Phoenix, Arizona

Quote from @Bob E.:

@Jana Crum If you have not done so Join AZREIA. The have a great market update that they do at their monthly meeting. I was nat able to make this months so I just pulled up the slide deck. It took me over an hour to go through all the slides and really understand what they are representing but the market is CLEARLY slowing. I would not look to start a new fix and flip right now. Days on market is increasing, prices are softening, labor and materials have not dropped to offset either of those.

Join the REIA, review the slides, attend the next meeting, and wait for an better time.

I've heard a ton of people mention the AZREIA but wasn't sure if it was worth it. From what you are saying it seems like a value add. Also, we are only looking for a cosmetic flip as this will be our first one and we don't want to dive in too deep. Since we will be living in the property, we'll be doing most of the cosmetic updates ourselves to save on GC labor costs

0 Votes

Phoenix, Arizona

Quote from @Account Closed:

Quote from @Jana Crum:

Hi everyone!

Any input on this would be greatly appreciated! I am considering buying a live-in flip with my parents and sister before the end of the year in the Phoenix area. The main thing I am nervous about is how the market is shifting in Phoenix. We are starting to see prices decline and sellers are providing concessions again (sidebar, happy to see the market normalizing!). However, my concern is even if we find a great property with a great margin in relation to today's comps, by the time two years comes around and we are ready to sell will the market have stabilized to a level where we can still make a profit? By no means am I asking anyone to predict the future market. I am just trying to understand how best to position myself for a successful exit of a live-in flip in twoish years.

Thanks in advance for your thoughts, Jana

Best sources I've seen expect about a 10% drop in the Phoenix area over the next year. But, the obvious question is "drop from what?".

A lot of people over priced their asking price to start with, to "test the market", in the last few months and half have had to drop their prices to get sold or they simply go "off market" for lack of interest.

So, I am using 90% of 3 current solds for figuring my ARV, that have sold in the neighborhood in the last 6 months. It's a complicated explanation, but just assume that what has sold is what market was at the moment that property sold. It obviously was market price because someone bought it. But now, the market has changed and prices are stabilizing so reducing those sold amounts by 10% gives you a new ARV for what they would sell for in the current market.

Selling in two years usually doesn't work because of cost of sales. Normally about 8% of the sales price goes to real estate fees and closing costs. So, to make a profit you have to subtract 8% for sales, and whatever renovation costs and any carrying costs. For instance a $400,000 sale has about $32,000 in fees just to sell. Keep that in mind as you plan your purchase.

Mike, thanks for sharing especially your breakdown on how you are calculating ARV. That's one of the calculations I was struggling with!

0 Votes

Phoenix, Arizona

Hi everyone!

Thanks in advance for your thoughts, Jana

2 Votes

Phoenix, Arizona

Congratulations @Wyatt Powers! Awesome deal!!

0 Votes

Hi @Jakob Gregory, get a solid business plan & pitch together, and ask your TRUSTED family and/or friends to partner with you in this new business endeavor. The bank of family & friends is always a great place to start lol, that's how I started. I did all my research and put together a solid business plan & proposal to my family and we are now partners in my Airbnb Arbitrage LLC. My family provided the initial capital and as profits come in, I pay them back and I am the managing partner.

3 Votes

All Forum Posts by: Jana Crum

Jana Crum has started 6 posts and replied 111 times.

Post: Introduction to Bigger Pockets

Post: Down Payment Assistance Arizona Program

Post: Down Payment Assistance Arizona Program

Post: Phoenix Live-in Flip

Post: Phoenix Live-in Flip

Post: Phoenix Live-in Flip

Post: Phoenix Live-in Flip

Post: Phoenix Live-in Flip

Post: $37 Out of Pocket 1st STR Deal!!!

Post: Airbnb Arbitrage Loan (10,000 dollars to furnish a house)