All Forum Posts by: Jerry Limber

I recently purchased my first investment property in Florida and about three days after taking ownership sewage started bubbling up through the bathtub.  After we brought a plumber out to take a look, they confirmed that the main pipe connecting the house to the street needs to be replaced with PVC because it's no longer safe to flush solids through it. 

Due to the size/location of the pipe, we will need to have a contractor rip up flooring in various parts of the house to fix it so by the time we are done the total cost will be in the neighborhood of $7,000.  My question is do I have any recourse to go after my inspector or possibly even the seller for not catching/disclosing this?  

Another thing to note, the seller was in the middle of going through a bankruptcy when I bought the house so even if it was theoretically possible to go after them, I don't think they have much left at this point.  

Thanks in advance for any help you can provide!

-Jerry

I have some long time friends that I am looking to possibly partner with on a real estate deal (or deals if it goes well).  We are still researching the specifics of what market and type of deal we will choose, but we will likely be pooling our cash to cover a 20% down payment and will look to get financing for the rest.  My main question is what are our options for purchasing a shared property like this and how can me minimize the impact to each of our debt to income ratios?  We wouldn't mind having 1/3 of the house count against each of us respectively, but I wasn't sure if that's how lenders calculate it.  

I'm expecting that we will need to set up some kind of LLC to manage the purchase and ideally we would like it if the financing could be in the name of the LLC, but with no historical track record, I can't imagine that's a possibility. I assume this isn't a new problem so any insights and possible strategies the BP community can provide are very appreciated.

Thanks in advance for your assistance!

-Jerry

Thanks so much for the replies everyone, these are all excellent insights.

@Wayne Brooks- You are correct, it was a typo.  The Sale price of the property was reduced by $6,000, and so was the Seller Credit (so it does net out the same for me).

@Account Closed - There is an appraisal fee of $425, but no underwriting fee or documentary stamp fees.  You hit the nail on the head, the financing option I selected includes a higher rate in exchange for minimizing up front cash at closing.  It also includes a lender credit of about $3,000.  To answer  your other question, I selected the title company my realtor recommended.  So if I am understanding your response, it sounds like all the fees listed as "Title - XXXX" are going to the title company, not the lender.  If that's the case it sounds like I need to call my title company and potentially shop around for a new one.  I noticed you are based in Florida, do you happen to know of a good one?

-Jerry

Hello all, I am a long time lurker but first time poster in the middle of my first real estate investment deal. I am purchasing a SFR in Florida with 20% down through conventional financing. I found my lender through Bankrate.com based on the fact that they had the most competitive overall terms and lowest fees when I locked my rate back in the beginning of December. Since the original estimate I received, there have been more and more fees showing up in my loan without a reduction in rate in the "Services you can shop for" section and I'm trying to figure out why that is the case and how normal that is. Below is a summary of how I got to where I am:

Original Estimate (this is what I received when deciding between lenders)
Loan Origination - $0
Title - Endorsement Fee - $145
Title - Lender's Title Insurance - $1,195
Title - Settlement Fee - $575
Total - $1,915

Original Full Loan Packet (This is the full loan packet that I signed once I decided to go with them)
Loan Origination - $0
Title - Endorsement Fee - $145
Title - Lender's Title Insurance - $1,195
Title - Settlement Fee - $575
Survey Fee - $400
Total - $2,315

I'll spare everyone the details, but in short for various reasons earlier this week the property sales contract with the seller was updated to increase the Sales Price by $6K and reduce the seller credit toward my costs by $6K (so it should net out the same for me).  When I received the updated loan packet from my lender, the fees now look like this:

Updated Loan Cost Estimates (These are the numbers in the disclosure sheet I received yesterday in response to the updated contract)
Loan Origination - $0
Survey Fee - $325
Title - Environmental Protection - $150
Title - Escrow Fee - $695
Title - FL Form 9 - $173
Title - Gov't Surcharge for Nat'l & KEL Title $3
Title - Lender's Title Insurance - $1,195
Title - Title Examination - $250
Title - Title Search - $195
Total - $2,986

I know it's possible for some fees to fluctuate during the closing process, but I am getting the impression that some of these fees are either junk fees which don't need to exist, or were known all along and not disclosed to make them seem like a more appealing option.  Now I am two weeks away from closing (1/15) and don't think I have time to switch lenders even if I want to without losing my rate lock which I really don't want to do.  I left a message for my loan officer to give me a call back and plan to address this on Monday, but I thought hearing outside perspectives would be helpful before I have the conversation.

Thanks so much in advance for any help the BP community can provide, and please let me know if any part of what I have described is unclear.

-Jerry