All Forum Posts by: Joan S.

Hi @Eddie Flores

Thank you! Yes that rate was heaven sent. I did noticed the higher rates on the cash-out refinance, and its a huge turn off but I figured being able to tap the equity in the home would be worth it. Thank you so much for the insight on the solar panels, I had no idea there don't add value (I do own them outright). Its kind of unfortunate, in hindsight I probably would not have purchased them. I did get a CMA from my realtor and she estimated that the house could realistically sell for $195K. I'm going in October to refurbish with new flooring, paint and maybe some new kitchen countertops so I'm hoping that should conservatively put me at $200k in home value. You are correct that the closing cost include the escrow which pay the taxes due soon but I also get what's currently in escrow with my lender refunded back to me so its the same difference.

Hi @Tanya F.,

Thank you for the message! This is actually a really great point and I didn't think about this too much. I just figured if I'm going pay this much in closing cost I might as well extract as much as I can. Granted, yes, the closing cost is partially dependent on the amount of the loan but its a small part since most of the title/recording fees are a set amount regardless of the amount of the loan. Also, I was shopping around some more and I found a lender who is giving me a 3.65% with just $4k in closing cost. So I'm super happy about that! :D

Hello All,

I was pleasantly surprised to find out that I got pre-approved for a VA loan. I love this loan because it basically means I don't have to put absolutely zero money down, no down-payment, no PMI and no funding fee. Unfortunately, with market being so hot most sellers aren't accepting the VA loan since it entails high inspection standards and it takes longer to close. That being said, there aren't many houses on the market once non-VA loan houses are filtered out. So this led me to get pre-approved for a conventional loan. I figured if I'm going to get a conventional loan why not get a duplex? So I found one that I liked but it has 1 tenant that is in there until 2022 paying below market rent and then the other tenant's lease expires in November so I would removing them and moving into that side.

Ultimately, I do want to have this as an investment so I would most likely house hack if I got the SFH to get some cashflow or Airbnb the rooms. Or I can put down 5-15% as a downpayment and get the duplex. What's the best way to go? Thoughts, advice?

SFH Pros:

1. -Great "free" leverage
2. -Less risk
3. -Househack (rent out or airbnb rooms)

Cons:

1. -Can't completely rent it out because it has to be owner-occupied
2. -Slow cashflow/return

Duplex Pros:

1. -True investment property
2. -Can force appreciation by updating interior

Cons:

1. -Tenant recently signed a 2 year lease until mid-2022 that is below market rent
2. -Old home, it has good bones but general contracting labor is expensive since they are in high-demand

Thank you in advance!

@Kyle Mccaw thank you for the reply! I sent Andrew a message and hopefully he can let me know if this makes sense. It looks like he works for Guaranteed Rate, which was actually Offer #2, they had the highest closing cost. The lender I was working with wasn't budging on the lowering neither the rates or the closing costs unfortunately.

@Ryder Cotton, I appreciate the reply! I hope you are doing well too. I'll ask the lenders about doing a straight refinance into 30 year conventional loan. These are quotes are for 30 year conventional loans but with a cash out. I thought the point of refinancing with a BRRRR strategy was to extract the equity that was in property to the use on the next investment? I'm new to this so I'm not sure either :). Thank you for the insight!

Hello All!

Fair new here but would appreciate any insight or advice!

I was previously in the Army and bought a brand new single family home in El Paso, TX using my VA loan in 2012 for $146k. I moved back to PA because this is where I'm from so I left it rent it out (landlording from afar). I put solar panels on the home so now its should valued at about $200k.

Here's what the numbers look like currently:

Mortgage balance: $94,948

15 year fixed mortgage at 2.5% (6 years in, 9 left to go)

Interest: $197.75 monthly

Principal: $776.58 monthly

Escrow: $536.95 monthly

Total Monthly: $1,511.28 (tenants are paying only $1,000 but I told them $1,600 or get out so they're leaving on Oct. 1)

Taxes: $5,268.10 yearly

Insurance: $1,002.15 yearly

If Renting:

Property management company says I can get a tenant for $1,500 to $1,600 a month (one suggested starting at $1,700 due to little-to-no electricity bill).

They take one months fee to set-up place a tenant in, 10% every month to collect rent, and $40 fee per maintenance coordination.

Refinancing offers:

I have 3 offers so far and working on more, all are 30 year fixed/conventional. Since this a cash-out refinance on an investment property and I'm also not in the state of Texas many lenders won't even touch this and the closing cost are high with higher interest rates. The cash back is pending on what my house appraises at, which could be $190K to $210K.

Summary:

Offer 1:

Rate: 4.250%

Loan Cost/Closing Fees: $8,816.24

• Loan Cost: $8,775
• Initial Escrow Payment at Closing (Taxes & Prepaids): $3,273.15

Loan Amount: $150,000

Discount Point: $2,917.50

Cash-back: $46,265.76 (home estimated at 200k)

New Monthly: $1,274.58.16 ($833.50 for Principal and $494 for taxes & insurance)

Offer 2:

Rate: 4.375%

Loan Cost/Closing Fees: $13,995.33

Loan Amount: $150,000

Discount Point: $2,062.50

Cash-back: $41,879.02 (home estimated at 200k)

New Monthly: $1,285.88 ($748.93 for Principal and $536.95 for taxes & insurance)

Offer 3:

Rate: 4.875%

Loan Cost/Closing Fees: $11,872.00

• Loan Cost: $9,000.88
• Initial Escrow Payment at Closing (Taxes & Prepaids): $3,248

Loan Amount: $157,500

Origination fee/2.125% of Loan Amount (Points): $3,346.88

Cash-back: $50,709.90 (home estimated at 210k)

New Monthly: $1,327.16 ($833.50 for Principal and $494 for taxes & insurance)

Other:

I'm leaning towards option 1 because of the better rate, lower closing cost and lower monthly. Lender 2 doesn't want to give me what the numbers look like with a $200K estimated value so its hard compare apples to apples.

Why:

• 1. I want to re-establish my VA entitlement (allows me to put ZERO money down on a property).
• 2. I want some cash flow, my monthly right now if bleeding me out.
• 3. I can use this cash to use on another investment property either as down payment (my not be necessary because of the VA loan) or used to refurbish.
• 4. Overall, I'm trying to get into BRRRR real estate investing. I'm currently looking at a 4-unit multifamily so I can live in one and rent out the rest. I need to live in one in order to get the ZERO money down deal.
• 5. Maybe selling is the best route to go but I think waiting until Spring would be best to get the highest selling price. I also didn't want to pay capital gains taxes on it.

Let me you what you all think! Thank you in advance!!

I am currently part of an LLC in which we all bought a house in order to flip it. The flip did not go well and now we are going to hold it as rental investment. Unfortunately, the mortgage is at 11% APR via a hard money lender and we want to refinance to a lower APR. I have offered the group that I can refinance the home in my name and lend them (the LLC, that I'm also a part of) the money at 8% APR. Can I do this and if so what do I need to do to establish this contractual agreement? How I do I run the numbers to see if this is a good deal for me?