All Forum Posts by: Jeremy Brown

I've met with Jeff in Roseville. He had to refer us to someone else for the HELOC, but was helpful for other loan types.

Are you looking for someone to do the most cost-efficient work to make it a rental, or higher-end work for a primary residence?

I’ve found conventional loans to be similar from one institution to another. Occasionally, you’ll find a proprietary product offered by one. But, they vary greatly on lines of credit. Some don’t do rentals at all and many have very low loan limits. 

It helps that they have a branch in the office at my day job. We just completed a HELOC on one of our rentals and it was a piece of cake. No out-of-pocket costs when borrowing up to $250k, no appraisal, and it's interest-only for 10 years, currently 6.5% (for a SFR). It was about 2 weeks from completed application to funding. Their rates on a conventional cash-out refi are good, and they'll do delayed financing.

I’ve had good luck with First Tech, but they have pretty restrictive membership requirements. 

Have you talked to a lender about what you'd be able to borrow, given your other mortgages? I have a couple I work with who have been helpful with making sure all rental income is properly accounted for, and that's important when you have to show you can make all those payments.

How much thought have you given to what kind of place you'd want to move to? Given your current PITI, if you move to Folsom or Roseville to something in the $400-500k range, you'll probably have a smaller house with a much smaller yard. If you want to stick with a great school district, I'd go with one of those areas.

If you rent, you might be able to come out ahead if you're willing to live in something modest. I've tried to build a financial model for buying a house to rent out in Folsom, and the numbers just don't work. It won't cashflow and even when I try to account for appreciation, it looks risky and it's easier to make money somewhere else. This suggests to me that renting is relatively affordable in these areas. Also, buying and selling is very expensive. Until you're certain you'll stay somewhere 4+ years, I recommend renting.

I'm an investor/realtor in the area and follow the buying and renting markets. If you'd like to discuss what's happening locally, let me know. I'm always interested to see what everyone else has going on and like to help where I can.

If you ask renters and potential home buyers in Sacramento, they'll tell you prices are too high and many predict a crash. I think that's just wishful thinking. I don't see any signs pointing to a downturn. 

Instead, I see very tight supply, little new construction (and much of that well above the median home price) and continued influx of people. Competing offers are the norm in many market segments and owner-occupants of the standard 3/2 in a decent neighborhood are routinely outbid by cash buyers (either investors or bay area transplants).

What can cause that situation to change? Supply isn't going to suddenly increase. Demand doesn't seem likely to decrease substantially, unless a sudden, unpredictable event triggers it. Interest rates will climb somewhat, but I don't see that stopping appreciation of single-family or small multi-family.

I predict at least another year or two of people complaining about home prices and rents going up and another couple years of people paying those higher prices anyway.

I’ve known of a couple people living in YC and commuting to Roseville. It’s not for me, but people do it. 

I’ve looked at property in YC a couple times. The rent and purchase-price per square foot is lower than Sacramento, but the rent:purchase-price ratio seems about the same as the Sacramento area, so I haven’t put much effort into finding something there. I stay closer to home, instead. 

I’m always torn on this. All the articles about remodeling RoI get really excited when you can get 80% of your money back on a project. If it’s livable, you may well be better off selling as-is at a lower price. 

On the other hand, I’ve been seeing a lot of freshly-rehabbed houses sell quickly while dates ones sit awhile, so figure out what that might be worth to you. 

Sorry I missed out this time. I had the flu bad all week and am just getting caught up on life.