All Forum Posts by: Jenning Y.

@Simon Obas  Of course you can if the price reflects the worst case scenario.  I once bought a short sale property without inspection,  even the contract allowed me to do so.  Because I figured out even in the worst case  scenario it was still a good deal. And it WAS.  So that really depends...  

 Same thoughts as yours, except I am heavily leveraged. I am in the process of getting rid of some highly appreciated but cash-flow poor properties and hold large enough cash. If everything is ok, I am happy with it.  If things turn ugly, holding enough cash is not a bad thing too,  may find some opportunities...  

@James Hamling

@Kyle J.

As I said before, many cities are still under water. If you look at FHFA's June 2005 Report, the top 20 MSA (which were the bubble most) :

Many are still under water:

Haha, still lots  of  US cities'  home prices are not fully recovered from the height of  the financial crisis.  For example, bunch of cities in Central Valley of California such as Stockton, CA; Los Vegas, NV;  Some Cities in New Jersey; and other midwest cities.  There are no doubt many US cities are still under water. 

I agree with @Edison Reis,  live where you love and invest in places with best possible returns.

I am a investor living in Texas but invested in states of California, Utah, Florida, and Texas. 

If you are a long-term buy-and-hold investor,  stay out of states with high property tax like Texas and Florida, high property tax is THE killer. On paper, cash flow in state like Texas and Florida looks wonderful, but after the high property tax, after the high insurance(including windstorm and hurricane coverage), and increasing high cost caused by hot weather and high humidity, cash flow is becoming worse and worse. That's why I will gradually get rid of properties in these states.  Please be aware of that I am only talking about buy-and-hold, and only for  1~4 unit, not for flipper and apartment buildings. 

My suggestions for selecting investment places are:
1)  Find the places with strong population increase

2)  Property tax should be under 1.5%,  definitely  not above 2%

3) with 75% LTV, after 10% PM fee, after 10% vacancy and repair cost, should at least break even in cash flow

4)  Buy properties a little bit of under median home price in a decent neighborhood 

 States like Utah, Idaho, Colorado, North Carolina are all wonderful states to invest. 

Be prepared for the worst, especially in times of uncertainty like now. If your properties have lots of equity,  pull out of the equity with cashout refinance and hold the cash in your own hand. Then get ride of cash-flow poor properties, and hold the cash flow properties.  If everything is ok, we are happy to see it.  if everything is not okay, holding lots of cash reserve in hand is not a bad idea, either. 

   

Chris is right,  no cost means higher rate.  I  worked with "Lane Aldrich" of "First Colony Mortgage" in Utah , they have no cost option.

I was mostly working with mortgage companies and independent brokers, not a fan dealing directly with banks.

Mortgage companies have some flexibilities, and  brokers are dealing with many lenders and have more choices.

Sorry, my properties are all out of state.   My suggestion is just to ask more lenders.

Retrospectively, one of the biggest mistakes that I have made since my real estate investment is that I did not follow some experts’ advice: trying to use no point, no closing cost loans. Over the past several years, I invested about $100k my own money, but it costed me over $100k for points and closing costs because I pulled out lots of money with numerous cash-out refinances. Very stupid to waste so hugh money on closing costs. We can always refinance to lower rate if rate is down. From now on, if possible, I will only use no point, no closing cost loans.

If possible, try no point, no closing cost loan to save cash, unless you have lots of cash.