All Forum Posts by: Jeremy Vohwinkle

Nice. Any before pics?

Welcome.

In most cases, yes, you need to have the cash on-hand on the day of the auction. Actual cash, certified funds, wire transfer, etc, depending on the jurisdiction. In many places you may have something like 24 hours to make full payment. But no, you typically can't show up to an auction with a pre-approval letter from the bank and bid with that.

You certainly should shop around because those origination fees seem ridiculous given the information you have provided. I've got a HARP refi on an underwater investment property in underwriting right now, at about 4% and origination fees of around $2,000.

Thanks for all the suggestions, everyone. And a big thanks to Joe Delia. I've been working with his brother all morning and looks like we're good to go. Already have a great rate locked in and just need to push some papers to hopefully wrap things up.

As a Chartered Retirement Planning Counselor, I have to caution against taking the money out early. Even with a Roth 401k, there are some penalties for early distributions. On top of that, if you are still an active employee with the company that offers the 401k, you may not even be able to withdraw the money and have to rely on just taking a loan from it.

That being said, I always tell people it's all about diversification. A 401k, Roth 401k, or IRAs, are just one aspect wealth building. You never want to put all of your eggs in one basket, but if you are investing in real estate as well as tucking money away in a tax-advantaged retirement account, you're simply diversifying, not only in the investments, but with the tax strategy as well. We have no idea what the future holds, so having money invested in various ways will allow you to structure your withdrawals later in life to make the most of it.

If you are unhappy with your Roth 401k performance, change it. It's been the best bull market in decades in recent years, so if you lost money recently, you may need to adjust your holdings. You have a decent amount of control and can park the money in steady income-producing investments, the stock market, or any combination that your plan allows. So I'd look at how your 401k can compliment your total investment portfolio, including real estate, and structure your investments so that it makes sense for your end game scenario. It shouldn't just be seen as a single account/investment and then ditch it without first examining how it plays into your total financial picture. Maybe the answer is to reduce how much you put into the 401k and direct more of it toward real estate, but until you sit down and look at the numbers you'll never know.

Joe Delia Thanks, I will do that. Quicken Loans was one I spoke to, but they had some strict LTV restrictions on investment properties. But this was only a few weeks after HARP 2.0 went into effect, so maybe things have changed.

Dawn A. I've never heard of them, but I will check them out, thanks. I mostly spoke to a few big national lenders and some of the regional banks around here.

I stress really because even though HARP 2.0 is supposed to help with underwater or high LTV ratios, investment properties, and all of that, in my experience every lender has so many in-house restrictions that it's virtually useless. They set their own LTV limits, they say they won't do it for non-owner occupied properties, or won't do it if they don't currently service the loan.

Long story short we bought a primary residence back at the end of 2005, with very little down, in Michigan, which in hindsight was clearly poor timing. That being said, our situation changed about five years later and we had to move, but obviously couldn't sell that house given market conditions and what we still owed. Since we could afford to keep making payments and take on another mortgage, we did that and then started to rent out the other place.

Problem is, it's in an awful location for a rental home and the amount of rent we can get is relatively low. And with a mortgage rate of 7.5% we're losing money. Again, it isn't the end of the world because we can afford it and I want to keep working toward paying it off and weather the market for a few more years, but if we could refi and get the rate even down to 5% it would help the cash flow situation tremendously.

Last year, shortly after HARP 2.0 went into effect I contacted maybe six or seven lenders, including where our mortgage is now, and nobody could help. Our bank didn't want to touch it, and who could blame them when they are milking that interest rate. A few other banks wouldn't do it because the loan wasn't through them. A few others wouldn't do it because it wasn't a primary residence. Even more wouldn't do it because of strict LTV limits.

After wasting a lot of time I got frustrated and gave up. But now that I've got more time and the new HARP program has been around longer, I wanted to begin searching again. But I also don't want to blindly make calls or meet with people only to get nowhere, so I was hoping there were some HARP friendly lenders out there to go to first.

If I had to guess, the property probably has a LTV of around 115%, although it's hard to say because there are no real comps to look at (extremely rural area, unique waterfront/lot size anomalies with our property, etc). To further complicate matters, we've put some decent money into updates over the past year, but from all the lenders I spoke to last year it seems like they pretty much just do drive-by appraisals and look at comps.

So yeah, anybody have a good idea of where to start looking? Just bite the bullet and get a mortgage broker and have them do all the dirty work?

Welcome. And I can't believe somebody is here from Clio. I grew up just down the road in Montrose. A lot of my family still lives in Clio.

There's nothing wrong with buying in Michigan and there are deals in every market. And even if you don't plan on living here forever and may eventually move, I wouldn't let that stop you. Especially when starting out, it's going to be easier to buy a local property in an area you are familiar with rather than trying to deal with something remotely.

And if you make it a good deal from the start, it won't matter if you end up moving out of town. You could continue to have it managed for you, or sell it, and so on, and still make money.

Geof Greeneisen, I actually have one rental home right now. Not a great one (long story) but it's been a learning experience over the past few years. My goal this year is to try my hand at one rehab flip and pick up one more property to hold and rent out. Just want to try a little bit of everything at this point to see what I enjoy the most and what makes the most sense in this area.

In other news, I passed the exam today, so now I can see how that might open up some opportunities. I'm in no rush and have a year to find a broker if I want to go that route, so we'll see what happens.