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All Forum Posts by: Jesse Wolf

Jesse Wolf has started 10 posts and replied 15 times.

Post: 750 hours - W2 Employee, but work for a home builder

Jesse WolfPosted
  • Real Estate Agent
  • Washington
  • Posts 16
  • Votes 2

I've done a lot of searching, but havn't found anyone with a situation quite this niche.

I am a 100% commission sales person for a new home builder. My entire day and time involves learning about, keeping up to speed with, and selling the new homes that are being built. I also sit on my laptop or phone and constantly research the surrounding markets, look for deals, etc. in my downtime.

I am however, not using my personal license. They are all filtered through one license out of another state under the builder umbrella. I am a W-2 employee.

Would this meet the qualifications for the 750 hours for REPS?

Thanks,

Post: What is this vent called?`

Jesse WolfPosted
  • Real Estate Agent
  • Washington
  • Posts 16
  • Votes 2

There's one of these in each bedroom of my fourplex. A couple need to be replaced/are missing. For the life of me, I can't seem to google my way into knowledge on this one.

Does anyone know what these covers are called? They go through to the outside.

Post: PRO MEMBERSHIP DISCOUNT CODE

Jesse WolfPosted
  • Real Estate Agent
  • Washington
  • Posts 16
  • Votes 2

It still rocks!

Post: Fourplex in expensive market

Jesse WolfPosted
  • Real Estate Agent
  • Washington
  • Posts 16
  • Votes 2

Hi all,

I'm currently under contract on a 4 plex. The building was built in 92. Inspection came back pretty clean aside from some organic growth in the attics which is common in my area. A remediation company is coming out Tuesday to give a quote. There are lots of little items/deferred maintenance that I and a buddy or my father could knock out in a day or two and it could use a good deep clean. (Trees overhanging roof, electrical sockets missing covers, moss growing on roof, one square of carpeting needs to be installed on unit 2, etc.)

Electric is all individually metered, panels look good. Water is one meter with individual shutoffs. Water heaters are past their expected life, so I'm assuming I'll be replacing those within 5 years.


Siding, roofing, crawlspace, sewer scope all came back solid. Some cast iron pieces to the sewer pipes, inspector recommended reassessing that section in about 4-7 years.

Purchase Price: $735k with a 10k seller concession toward closing costs. 

I'm putting down 25% and have secured a loan at 5.875% which puts my mortgage right at $3,900/mo with taxes and landlord insurance.

Owner currently pays WSG. $325/mo. Tenants pay all other utilities.


Units are 550 sqft 2BR/1 bath. Street parking (lots available), shared coin op laundry on property. There are also 5 storage units, all 5x7, in a separate building in the middle of the shared lawn area. Currently playing with the idea of renting these individually for an additional $40/mo. They are currently all occupied by the owner's stuff.

Current rents: 

Unit 1 - Owner occupied. Selling because of her health. She's owned it 4 years. Currently has two large dogs (110, 130lbs) and the female is pregnant. She is requesting a rentback for 6 months so that she is able to find a new place after closing. Rentback would be $1400/mo

Unit 2 - Vacant - She was working on renovating it. Has brand new flooring, paint, SS stove. Does not have a fridge (approx 1k cost to match other appliances)

Unit 3 - Rented to tenants. Tenants are smokers ( I would eventually have a non smoking policy) They are 2 months into a 1 year lease

Unit 4 - Owner's boyfriends kids living here. Supposedly paying $1200/mo for rent. No lease in place. Terms of closing are that they would be on a lease at $12-1400/mo and that lease would also be personally guaranteed by the owner.

I am in an expensive market with a housing shortage, so vacancy is virtually non existent. I've been watching Zillow and the closest comp I've seen come available for rent was listed at $1,150 and $1,250, but I feel that manager underpriced the market as they were rented out within 72 hours. I believe I could potentially get $1,400/mo for each unit, but easily $1,300 conservatively.

I could also eventually sub meter the water and flip those charges back to the tenants. Combined with renting the storage there is some opportunity to produce more cashflow than there already is.

Real estate in the area this fourplex is located is up 30% yoy and is (in my opinion) directly in the growth equity wave. I passed on a fourplex for 1m a year and half ago in a city 10 minutes away and that same four plex just sold for 1.8m. Granted, those were larger units, but the fact that this deal cashflows at all from day 1 makes me excited as cash flow is very rare in my market.

Also, I would be self managing this property and that is something I have wanted to learn and experience for awhile now. A huge pro is it is also about 5m from my house. I can get there very quickly and would easily be able to keep an eye on it.


Pros: No major problems aside from the growth in the attic which I'm getting a quote for and will negotiate with the seller.

-Close to home

-Storage units

-Cash flows in a non-cash flow market

-Potential for some huge appreciation over the next 5 years as the town grows

Cons:

No designated parking

3 inherited tenants that I would not be able to screen to my own criteria (large pets, smoking)

Probably 10k in expenses between carpet, paint when those tenants move out.

The unknown 

I'm regurgitating as much info as I can, but I'm sure that I'm forgetting some important aspects or information in this post. Please ask any questions you feel I'm forgetting - I would be thankful for the feedback.

Criticism welcome.


Post: 2 points investment refi, or 0 points?

Jesse WolfPosted
  • Real Estate Agent
  • Washington
  • Posts 16
  • Votes 2

Thank you all for the replies!

I ended up going for 3% with no fees and a 3k credit. The refi will essentially be a wash for what it's actually costing me and I'll be saving $200/mo from where I am currently with my 4.125.


I was originally going to pay the points and roll the refi cost into the loan, but something I didn't consider is that by rolling those in I am increasing not only the monthly payment, but the points paid because the loan is larger. This made the gap in monthly much closer ($67/month) from 2.375 with points vs 3%.

At 11k total for cost (2.375) it would take almost 13 years to break even. Although I don't ever intend to sell the property, you never really know what's coming next and the idea of losing 11k in equity just didn't seem right.

Thanks again for all of the input!

Post: Accept tenant who owed previous landlord for paint?

Jesse WolfPosted
  • Real Estate Agent
  • Washington
  • Posts 16
  • Votes 2

Hi BP,

I'm in the process of renting out my second home. My PM called me today with an option for a tenant. They make well over the required amount of money, ex military, fair credit scores.


They have one glitch. They owed their previous landlord $1,300 for paint.


When my PM brought this up to them they immediately reached out to their prior landlord and paid them, then provided proof via a receipt that they had paid them in full.


I have the very experienced designated broker of the PM company saying that its an absolute dealbreaker and it automatically disqualifies them.


I am somewhat on the fence. Other than this incident they seem like great tenants. 

My thought was to collect 1.5-2x time the normal security deposit to compensate for the risk.

Please share any opinions and insight. I'm very open to criticism and constructive feedback.

Thanks!

Post: 2 points investment refi, or 0 points?

Jesse WolfPosted
  • Real Estate Agent
  • Washington
  • Posts 16
  • Votes 2

I am refinancing my current investment property in Olympia, WA. Current rate is 4.125.

I have two options I've narrowed it down to:

2.375 paying two points ($6,500)

or 3.125 with a $4,100 credit

My logic is it would be smarter to go for the 2.375 as not only will my cashflow then be higher, but I'd be financing that $6,500 at 2.375 by rolling it into the loan. The cash flow money I'd make/reinvest would make more, and my day to day situation better.

The downside I see would be doing a cash out refi to pull money for other projects in the future, and the points being wasted. 

I'm open to all sides of criticism/viewpoints.

Post: Starting out in NY, can't get mortgage but have some cash

Jesse WolfPosted
  • Real Estate Agent
  • Washington
  • Posts 16
  • Votes 2

Big institutions have some of the strictest underwriting guidelines for loans out there. Go to bankrate or nerdwallet and type in your criteria, then call the top 3 for each website. Also reach out to lenders through bigger pockets for second, third, fourth, nineteenth opinions until you find someone willing to loan to you.

I work for a builder and some of the most cake deals for our preferred lender are people that were turned away and told ridiculous entry/UW guidelines from the companies you mentioned.

Post: House Hack vs SFH - Help me analyze

Jesse WolfPosted
  • Real Estate Agent
  • Washington
  • Posts 16
  • Votes 2

Hi BP,

I'm currently relocating for work, and my options are to purchase a SFH from the company I work for (home builder, no discount) or to purchase a duplex and house hack.

Either property I purchase will be turned into a full time rental after the 12 months have elapsed.

SFH - $444,900 - 

4BR/2.5 Bath 2175 sq ft - Current market would rent it from 2300-2600. Mortgage would be $2,300 a month with $21,000 out of pocket

Pros - Brand new (build finishes 12/1), very close to work, 3 minutes from gym (I gym 5 days a week. This'll save me 2 hours a week in travel time). Decent school system, fantastic location. I am personally excited at the idea of living in the location because of the convenience of how close everything is.

Duplex - $550,000 - mortgage would be $3,030 FHA

Built- 2001

One side 2/2 1k sq ft, other side 3/2 1400sqft

2/2 side has had tenant since it was built in 2001. Tenant currently pays 1350/month. landlord pays utilities. Market rent is probably around 1650-1750. I'd have to raise the rent and flip utilities to tenant.

3/2 side will be vacated soon. Market rent for this unit is somewhere between 1850-2k.

Pros - Best school system in the greater surround area, backs up to 1million+ waterfront homes(yes, odd neighborhood. drove through it. very nice, not trashy at all)

-3/2 unit was renovated 2 years ago. Owner has kept up on maintenance and repairs overall

Concerns - It would be very awkward to tell a guy that's been living in the unit for almost 20 years that I'm jacking his rent up $500/month. If he vacates, would obviously need some updating/renovation. I also don't like the idea of the hostility of living next to someone I just increased their rent by $500

-An identical unit down the street sold earlier this year for $469,000 in February. I feel like I'm drastically overpaying, especially with the consideration about having to potentially renovate the 2/2 unit

Summary: Moving into the 3/2 unit and increasing the rent to 1750 on the 2/2 side would put my monthly mortgage portion around $1400/month. This is about 1k cheaper than going the SFH option saving me around 12k after tax money this next year. Long term I'd have the added benefit of being able to increase the rental rates of two units with the duplex vs the one with the SFH.

The other side is the location of the SFH is so great I fear the appreciation may far outweigh what I'll get on the duplex over the next 5-10 years. Seeing as WA market is highly appreciation based, that weighs heavily on my decision as well.

Any insight to be offered would be much appreciated.

Edit, footnote: I'm buying one of the very first houses in the neighborhood for the SFH. Anyone that's been involved in new home sales knows we creep the prices up a bit every quarter, or faster depending on how quickly we're selling. This bodes well for the appreciation argument as well.

Post: Seller financing wrap around

Jesse WolfPosted
  • Real Estate Agent
  • Washington
  • Posts 16
  • Votes 2

Ok, I believe I've found myself in a pretty amazing situation to acquire a duplex. A family friend is selling after 25 years of being a landlord, and she just wants to be done with it and move onto the next chapter in her life.

She is open to seller financing and working with me, so I am trying to figure out the best way that I can get into it without any money out of pocket. She does not need any money right now, and actually seemed like she would prefer the monthly installment payments especially if it gave her a tax benefit. To my understanding, the installments would still be taxed on capital gain for the total price of the sale, which would be at 15%.


The kicker is that she still owes a 90k mortgage on it. I am concerned about the due on sale clause. From what I've read so far, it doesn't sound like the bank would call it due as long as I make the payments on time(I'm not concerned about being able to make the payments). Also in a worst case scenario I do have access to the 90k and would be able to pay it back, however for obvious reasons I'd like to keep my cash free.


The duplex itself is valued at about 400k (we live in WA state). What is the way that I would be able to seller finance this and be able to get into it without any money out of pocket? 

I'm scouring the internet, youtube, talking to friends but I figured I'd throw up a post too and see if anyone would be willing to walk a young hustler first timer through the process.

Ideas I've lightly thought about, but I'm not sure if these are possible/legal:

-Take traditional mortgage for 90k, do a personal note for the remainder 

-Take full personal secured note for the purchase price, and pay the 90k mortgage myself

-Pay off her mortgage, take ownership, then put a bank mortgage on it and pull my cash back out, and then write a note for the remainder


Thanks BP!