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All Forum Posts by: Joseph Montes

Joseph Montes has started 8 posts and replied 31 times.

Post: Did I overpay on my closing costs?

Joseph MontesPosted
  • Rental Property Investor
  • Chicago, IL
  • Posts 31
  • Votes 2

@Patrick L. I know a cash buy would be optimal, but a loan was the only way I could get started. I don't make a lot money and saving for an cash buy would have delayed me at least a year or more. I still stand to make money once I recoup these fees.

I see your point about looking at the insurance/tax fees as not really being "fees." Obviously, besides the origination fee, which other fees/cost could I avoid with a cash buy?

Post: Did I overpay on my closing costs?

Joseph MontesPosted
  • Rental Property Investor
  • Chicago, IL
  • Posts 31
  • Votes 2

@Brie Schmidt to the rescue yet again! You're my hero.

Thanks for weighing in @Ed Wood.

Guess, it's just the cost of doing business!

Post: Did I overpay on my closing costs?

Joseph MontesPosted
  • Rental Property Investor
  • Chicago, IL
  • Posts 31
  • Votes 2

In June, I bought a 3 bedroom/1 bath SFH in Lansing, MI on short sale for $20,000 that I am now renting. I was able to find conventional financing from a bank, getting a 30-year loan at 4.79%. I'm currently gearing up to start looking for my next property and I am in the process of evaluating everything I spent on the first deal to see if there's any room for improvement.

One of the things that's very frustrating is, especially considering that I only put $4,000 down, is the amount I paid in closing costs, which exceeded the money down at : $4,540.64. To be honest, I kind of got pulled through my first mortgage experience as the constant stream of paperwork/charges/concepts-new-to-me was pretty overwhelming. Now I've gone back and read up on and evaluated everything I was charged:

-Agent commission: $750.00
-Origination charge: $606.50 (cost to create the loan)
-Appraisal fee: $515.00
-Credit report: $6.68
-Daily interest charges from 6/25-7/1: $12.84 (prorated loan interest)
-1 Year of homeowners insurance: $262.00
-Initial escrow deposit: $125.83 (Start escrow for insurance/taxes)
-Title services: $527.80 (Check for liens on the property)
-Title insurance: $349.75 (Insurance in case there are liens)
-Gov. recording charge: $80.00 (Register property at city/county/state level)
-Gov. transfer taxes: $172.00 (Costs of taxes/stamps/deeds to register)
-Tax service fee: $85.00 (Makes sure I'm paying taxes on my loan)
-Flood certification fee: $19.50
-2013 City summer taxes: $1,027.74

My question is do you see anywhere I could have saved money? The last fee is pretty large and seemingly unavoidable given how the city assesses taxes, but what about the others? Also, let me know if any of my descriptions/understandings of what the charges are seem incorrect.

Thanks for your help!

Joseph

Post: Real estate agent license classes in Chicago

Joseph MontesPosted
  • Rental Property Investor
  • Chicago, IL
  • Posts 31
  • Votes 2

@Brianna Schmidt wow. Thank you very much for the very comprehensive answer. It sounds like this training wouldn't be as much of an asset as I'd hope for obtaining my own deals. The properties I am interested are so cheap that the settlement charges are nearly as much as the mortgage down payment and I was hoping to at at least knock out the cost of paying an agent. Again, thanks. You've saved me a lot of time/research effort.

Post: Real estate agent license classes in Chicago

Joseph MontesPosted
  • Rental Property Investor
  • Chicago, IL
  • Posts 31
  • Votes 2

Thanks, @Account Closed

Thanks for the suggestion @Larmon Cummings Jr. I live in Logan Square. If you don't mind, let me know how it goes.

Post: Real estate agent license classes in Chicago

Joseph MontesPosted
  • Rental Property Investor
  • Chicago, IL
  • Posts 31
  • Votes 2

Hi, I'm interested in obtaining a real estate agent license as a first step in furthering my investor knowledge outside of BP and, of course, for the practical benefits: MLS access/being able to do my own deals. I have two questions for the community:

1) Is there a school/course in Chicago (where I live) that people recommend? I've done some Googling and there are some decent looking courses out there, but I'd like to hear opinions. I work traditional hours so evening/weekend would be ideal.

2) The market I actually invest in is in Michigan. I know you have to get licenses within the state you want to work in and I've read up a bit about Michigan's requirements (http://bit.ly/1gQudcp). Would a course give me most of the general knowledge I need and then I could then pick up more of the state-specific knowledge on my own?

Thanks for your help with my inquiries! Happy hoidays.

Post: SUCCESS! Now what?

Joseph MontesPosted
  • Rental Property Investor
  • Chicago, IL
  • Posts 31
  • Votes 2

OK. I can see you are all big-picture thinkers.

@JScott I did not develop a long-term plan. There was so much to absorb at first and I just wanted to try and see if I'd enjoy it before I came up with such a plan. I do. That's why I'm here now.

Here's my goal: I'd like to get away from my desk job and make more money working for myself than I do now.

Right now, I obviously don't have the income or the skills to make such a transition so I'm willing to pick up a different profession to gain some of those skills to move that way. @Fred Ramos There as so many areas of real estate to dig into I'm not sure where to move next. I think in absorbing all the information this site provides, It's difficult know where to narrow my focus.

Maybe, you all could share some practical first steps you took when you entered this industry? What were the first things you focused on learning? Thanks.

Post: SUCCESS! Now what?

Joseph MontesPosted
  • Rental Property Investor
  • Chicago, IL
  • Posts 31
  • Votes 2

Using Bigger Pockets as an educational resource, I successfully bought a fairly inexpensive 3BR SFH in Lansing, Mi, got tenants in there about a week ago, and now I'm feeling pretty good about things. Assuming no huge issues arise (I know they can), I should make a decent ROI.

So, my question is - what next?

The first thing I'm going to do is go back and review all of the steps I took to get here because I've already forgotten a lot. I also want to set up a good bookkeeping for my property. More importantly, however, I'm not certain what my strategy should be. I'd like to get move involved in real estate/buy more properties. I guess I'm asking two questions here:

1. What career/training or experience should I seek out to further my knowledge?

I'm willing to leave my current job to learn more. I only make 40k and I feel like I really need to ramp up my pay to start funneling more money into real estate. I'm also open to hear how someone mightstrategize on my budget.

2. What's the next kind of real estate I should buy?

Maybe just another house similar to the one I have? Or, I could take advantage of an FHA loan and move out of my apartment and rent to roommates (I live in Chicago, IL)? It might be a great way to learn about renovations if I can roll them into my mortgage.

Anyway, I'm interested to hear what people have to say. Thanks for any advice you can provide!

Joseph

Post: New investor focused on Lansing, MI signing on!

Joseph MontesPosted
  • Rental Property Investor
  • Chicago, IL
  • Posts 31
  • Votes 2

Brandon Turner, thanks for the links. I'll certainly check those out. Great work on the podcast, btw. I've really enjoyed listening to it each week. You and Josh have a great back-and-forth.

Ned Carey, thanks for the book suggestions. I might check out the Robinson one since it has forms. I'll look in the file vault here, as well.

John Knappmann, potentially they can help with some issues. They live about an hour and a half away. They are moreso helping in terms of advice and helping me prepare my property. I don't want to put too much responsibility on them. They work full time and have to take care of their own home.

Michael Lauther, it's great to hear from someone who's had success managing their properties at a distance. It gives me confidence I can make this work. If you care to, I'd be interested to hear what sort of local contacts you made and how they help you?

Steven Hamilton II, GO WHITE! My bar is The Peanut Barrel. Can't beat a place that lets you throw peanut shells on the ground. Good burgers, too.

Reginald Vickers, that's a great idea. I'll look up their site and see if there might be a meeting I can attend. BTW, my degree is in journalism. I was briefly an intern at The Flint Journal. Great paper. Great town.

Jason Walkowicz, I'll look this group up, as well.

Wendell De Guzman, I'd be interested to see that point system. I'm a pretty analytical person myself and wouldn't mind such a didactic approach. I currently live in a 4-bedroom flat where I've orchestrated a string of roommates over the past five years who've all been very good picks. I feel confident in my ability to judge character. Of course, I've read up on the basics about how to search credit and that a 1/3 of their income should be free to pay the rent.

I'm also interested in the "subjective to's" I need to Google that! Of course, I need to get this property off the ground, but I can't help but keep thinking "what's next?"

Thanks to everyone who responded. Your enthusiasm really excites me.

Post: New investor focused on Lansing, MI signing on!

Joseph MontesPosted
  • Rental Property Investor
  • Chicago, IL
  • Posts 31
  • Votes 2

Hi BP community,

I just closed on my first single family home in Lansing, MI today! Woo! It's already been a long process to get here (short sale) and now all the real work of getting it rented out is about to begin. I've held back from joining this forum until this point because I wanted to have a first purchase under my belt, but I want to start by thanking all of you who contribute to this site. Your articles, especially those about financially analyzing deals, were instrumental in helping me get to this point.

A bit about me: My name is Joseph. I'm from Michigan and I'm a Michigan State graduate, but I actually live in Chicago. I know many first-time investors are discouraged from buying outside of their immediate market (5 hours away), but my full-time job involves editing for a start-up company and it doesn't bring in much bacon. I had to invest where I could afford with my meager savings and I know Lansing / believe it's a strong market given its proximity to MSU and the capital. Plus, my family is based in Michigan and they are supporting me in this process.

A bit about my property: It's a two-story, three-bedroom/one-bath, built in 1922, 1040 square feet situated on Lansing's east side, very close to MSU if I decide to go with student renters. I bought it on short sale with conventional financing. It's a nice home with hardwood floors and floorboard heating that was owned by an older woman who seemingly did a good job of maintaining it. The property abuts a nice park and I don't foresee having much trouble getting it rented out.

Questions for the community:

1. I'm going to do the majority of the property management myself, but plan to hire an "agent" to do small things for me like checking in on the property and taking care of stuff I couldn't do without being there. I was actually inspired by an article I read on BP by a guy who set up a similar arragantment, but can't seem to find it now.

My question is how might you structure the pay for such a relationship and what would you pay? This is going to be an ad-hoc, per-interaction job. Like, say I need them to go pick up and put out a new recycling bin, they'd get paid for going to do that small errand. I was thinking something like $15-20 per interaction and a small quarterly or annual payment just to make it worth their while. Thoughts? Think in Michigan terms of pay.

2. Anyone have recommendations for handymen, electricians, locksmiths, and lawn services? I'll be needing all of these very soon.

3. Although I already have some of these, I'm looking for templates for leases, tenant application forms, move-in condition report checklists, and deposit to hold agreement if anyone has good ones they're willing to share.

4. Any other advice or guidance you might have for someone just starting out...

I'll leave it there for now. I'm heading out now to an engagement and then a home-buying celebration dinner with my GF, but I'll try to check back later for responses. Thanks in advance for any advice or guidance you have to give. I really think this site is the best resource and hope I can become a valuable part of the community.

Thanks,

Joseph