All Forum Posts by: Jeremy England

Paid cash for my last 3 vehicle purchases.  2 were less than 10k, one was 25k.  The way some vehicles are built today, they will go over 300k before they are ready for the junk yard.  I drive a 2004 Dodge Ram 1500 5.7 hemi that is nice on the inside and runs just fine.  Paid 8200 for it a couple years ago.  

I'll drive it for a couple more years then do the same thing

So I looked into Sofi and got approved for 100k, 7 year personal loan at 8.6 pct.  

This is a better option than the conventional lender referenced above for sure.  I'll have to compare it with some other lenders.  for this particular deal it would decrease buying costs and cash outlays, but nearly double holding costs since the loan payment would be like 1600/mo.  Conventional lender I come out of pocket for 25-30k to get the property.  This would mean I come out of pocket zero and the cost of closing would be equitable to an all cash deal

Assuming I carried the property for 6 months before being sold or refinanced, that's like 10k in debt service, however since you are paying principle, nearly half of that gets deducted from the original 100k  Making the loan payoff approx 97k vs 100k.   

If one is to use this for real estate, the way I view it is it increases your holding costs but decreases your buying costs, and limits the amount of cash you need for a purchase requiring all cash

Ok, so the lender is trying to charge 3550 in origination charges, and then consider the prepaids are 1997 (which most would come back to me when I sell),  so that would put this loan more in line with normal.  The lender is the problem.  

I've never borrowed from a hard money lender, what fees are typically involved?  

Do they do an actual appraisal or is it based on a bpo?  Do they charge the same miscellanous fees that this lender is nickel and diming me for?

 wow, never heard of that, but I'll be looking into it because I think they could be a good option for me.  

so 225 to report the events and 150 to interpret the results of that report?  

Seems like paying a carpenter to hang a door and an additonal fee to measure the opening.  \

How does one make any money on transactions less than 200k if it costs this much just to buy the property?  

It throws my numbers way off and turns a potential deal into not a deal at all.  

The formula that gets promoted alot is estimating 2-3 pct for buyng costs correct?  As it stands this constitutes 11 pct of loan amount, 9 pct of the purchase price.  

not that i'm aware of.  I don't truly understand what half these fees are.  

850 for processing?  

not sure what the difference in a title search and title exam is?

flood determination, flood life of loan, lif of loan tax service?

I'm calculating costs on a potential deal and got a loan estimate from a conventional lender.  It seems the buying costs are way excessive to me.  What do you think?

loan amount: 80000

Origination charges:

3pct points: 2400

processing fee: 850

underwriting: 300

Services you cannot shop for:

appraisal: 510

credit montoring service: 7

credit report: 15

flood determination: 11

flood life of loan: 5

life of loan tax service: 55

tax certification fee: 18

services you can shop for:

title search: 225

lenders title policy: 531

closing fee: 550

title survey: 400

title examination fee: 150

taxes and prepaids: 

recording fee: 207

transfer taxes: 1107

Home owner's insurance: 1740

property tax: 257

Optional:

title owner's policy: 140

total: 10059

So 10000 bucks on an 80000 loan?  wth?

Seems excessive to me.  what can I cut from this by shopping around?  Are these costs what other investors are seeing?  

This is a 20 pct down loan btw.  So I'd be paying 100k for the property.  

I have everything as far as financials too.  Monthly income, excellent credit, plenty of cash reserves.  Work history.  

I could go pull my last hud1 statement from a couple years ago in the same county but that was for a personal residence and much higher loan amount.  

If it were me, I would get a personal loan from my bank to pay off the higher interest debt.