All Forum Posts by: Jason Switherspoon

Cool thanks for the replies. @Matt M. Are you saying the 15% coc is after the refi stage of your BRRRR?

@Bill S. - Cash on cash in this case. 

Is anyone a fairly new investor (3 or less properties) in the Colorado market? I am wondering if anyone new to the game has been able to land cash flowing properties of 8% or more anywhere near Denver.

My cousin wants to sell me her $275,000 (appraised) home for $235,000 to help me get my first investment property. 

Can I buy the house, get a loan, get tenants, then immediately refinance the house for the full value of $275,000, and effectively pull the $40k of equity back into my bank account? I assume there will be capital gains tax at the very least, but this would still make my first property roughly 20% CoC which would be incredible.

My cousin is selling her townhouse and she knew I was interested in getting into real estate, so she offered me an awesome deal (or so I thought). She would sell me a $275,000 for $235,000 and all I had to do was cover all of the sale documents and closing costs. 

I ran the numbers over and over, but after the $230 HOA, the CoC looked to be realistically at 5.5% or more optimistically 7.5% if rent hit near the top for that area. These returns are with me personally managing the property.

I have watched web presentations on this site and listened to podcasts about how to get started, and that CoC return just doesn't seem to be high enough. Obviously the 40k of free equity here is amazing, but an optimistic CoC of 7.5% ended up feeling so low for dropping 53.5k to get in the door. I ended up NOT going with the deal.

Is there a CoC value that is widely considered to be good for investment properties? Some simple googling says 8% is considered ok, but lower than that is not worth the effort.

PS: Here is a link to the numbers involved in the deal: https://i.imgur.com/f1iEzcv.png

I am buying a property from my cousin. We only need the official documents to be drawn up and signed.

For those that have had a real estate lawyer do your closing paperwork, how much did it end up costing you?

A licensed appraiser wrote up and entire report with the house's value in it. I have heard about "gifts of equity," but I am not sure how that could or should be applied to this purchase. The house purchase is going to be used as a rental. Any advice here would also be appreciated. 

My cousin had her house appraised for $275k. She is going to sell it to me for $235k. Are there tax implications that I will have to face as a result of the discount?

I am about to get my first investment property with my brother and I am shopping for lenders. We both have credit scores above 740 and make a combined income of $230k. We have no other debt besides the house we own and live in together. We are going to buy a $235,000 home and put 20% down on it.

I have heard that investment properties cost on average 1 additional percentage point on what I would normally get. So if I were to qualify for a 3.875% primary residence mortgage, I can expect a 4.875% investment property mortgage. Is this accurate? Do interest rates on investment mortgages vary widely from lender to lender?

I am about to apply for a loan with 5 lenders and don't know what to expect (or how many lenders to contact)

Current list of lenders to apply for:

CMG Financial
Quicken Loans
Chase
Flagstar
Fairway Independent Mortgage Corporation

Thanks!