All Forum Posts by: Jarod Clayton

Matt you may still be walking into some equity, you never know.  I was a loan officer at countrywide lending for 3 years and as others have said I have never seen an appraisal on a purchase be much higher than the purchase price.  If there is a large difference between purchase price and appraised value it is always that it came in too low.  Appraisers rely on mortgage companies to give them business and the last thing they want is to get singled out by the bank as unreliable.  Banks are not in the business of owning homes, so if an appraiser overvalues a property and the bank forecloses or takes a short sale it could negatively affect that appraisers reputation.  Therefore the appraiser's usually think of appraising purchases like this.....Is this house worth what the buyers are paying?  That is essentially the only thing that matters to the bank as it pertains to value.  There are other things they are looking for as well such as cost to cure etc, but the value's only purpose is to support the value that the bank is lending money on.  Remember this-"The truest valuation of how much a property is worth, is how much someone is willing to buy it for."

So in this case the day you close, your house is worth $253k and their is no disputing that, however on day two it is speculative & based on the comps in the area.  So cheer up and don't worry about the appraised value, it means nothing as far as the tremendous deal I am sure you just got!

I just finished a reno on a home that had laundry in the kitchen.  My debate was smaller and not as nice kitchen or basement Laundry, which everyone seems to hate.  Here is what I decided............. Kitchen is the most important room in the house and you should maximize % of budget in that room.  It will go a long way with renters but even longer way with potential purchaser down the road.  In vegas weather permits laundry in the garage and as long as you can still park a car in the garage you should be fine.  Also what I did to take away from Basement Laundry is I built a craft/gift wrapping station.  It seems to have worked well because buyers have loved the GW station and not commented on the basement laundry(note-basement is finished).  Pictures-Kitchen is pictured below, do you see that stupid huge fridge?  That used to be the laundry room, so for my situation I think it certainly made sense.  you can also see the pictures of the basement laundry and GW station, the room is L shaped so they are both in the same room.  This is just my two cents, I hope it helps and wish you luck. 

UPDATE-

So we listed the house for sale in November and we just went under contract Xmas eve.  You can take a look at the listing here.............

http://www.zillow.com/homes/17-Patriots-Rd,-Stratham,-NH-03885_rb/

We got a lot of traffic the first couple of weeks and the feedback told us we needed to drop price.  We are probably only going to walk away with about 40k on this deal but the amount I have learned is worth more than that alone.  My family and I love the house so much it is very difficult to leave, but that would mean abandoning the plan.  Looking forward to the next one!

I actually disagree a little bit about the roommate.  If you are securing the note on a loan you need to limit income contribution to those that are on the note.  Who is to say that the roommate won't leave 6 months in?  It seems like it is similar to getting Debt to Income ratios for investment properties.  Usually the bank only takes 70% of your investment income. 

I bought and moved into a house a year ago to fix it and sell.  We are about 3 weeks from being finished and putting it on the market.  The property is in a very sought after neighborhood in a nice town.  My next door neighbor heard we were getting ready to sell and said she had friends looking to get into the neighborhood.  She asked if they could see it before we put it on the market.  They have already been looking in the area so I know they have a realtor already.  I have not signed with a realtor yet and if I only have to pay the 3% out to the buyers realtor it will save me about 20K.  So my question is what risks do I run if I do not use a realtor and are they worth it? 

Russell I certainly have entertained that possibility.  2 reasons I am planning to sell now are as follows.......

1.  My wife and I are not really willing to "regress" to the point of having tenants live with/next door to us.  If it were 10 years ago it would be a totally different story.  This is a great strategy but we just don't think we are willing to make that sacrifice. 

2.  I don't like to bring this "noise" up but I don't have a lot of faith in the market right now.  In my area the market is as strong as I have ever seen.  I think that a 10K hit in Long term gains tax is worth it to ensure I move this property at the right time.  I do not believe in trying to time markets because I'm not that smart, but I do not want to risk a 10% drop in the market as that will eat much of my profit. 

Summary-if we are not going to owner occupy the first property there is no tax advantage to waiting.  More importantly my whole long term plan rests on this sale, I just want it done! 

Thanks Mike,

What about setting up an LLC or S Corp. Although I try to research on my own I am not sure what type of structure would better suit my plans. Certainly a CPA would be helpful in advising what type of structure I should set up, but a good attorney can do the paperwork. I Also want to discuss liabilities and how to best shield myself and my family from possible litigation. I want to discuss things like moving title via quit claim at the closing into my business. I assume some of the more savvy investors employ people that are experts in these areas. Please don't be shy with the advice!

that quote seems strong to me. I just paid $1000 for 300sq ft and that was after searching 

I purchased a HUD home and my agent was not registered so could not represent me but they did give him a 1.5% referral fee.

My interest in an attorney is because I would like to set up an LLC or some form of corporation. I would like to understand the ins and outs of taxation based on my particular plan. I feel that an accountant goes hand in hand with the attorney as shielding money from taxes is very high on my priority list initially. I have a plan for investing and I have done much reading on LLC and taxes but I feel a good expert will be worth its weight in gold if they can help me get set up the right way in the beginning.