All Forum Posts by: John Norman

How I have seen it in the past in MLS, our "agent notes" states "that all communication is to be had with the seller by contacting them at _______. Once a contract is ratified, please let agent know so the listing can be marked pending in MLS"

MLS guidelines states that certain information can't be put into the general remarks, which owner information and contact is not allowed. Whenever there is a violation caught (which is flagged daily), the agent has 24 hours to remedy or is fined. All of the online sites pull the MLS information, but not agent notes or listing attachments/disclosures.

I'm not sure of a work around for what you are doing. FSBO on Zillow is likely the only way, as FSBO doesn't have to confirm to MLS rules.

Quote from @Grant Smith:

Hello all,

In my past year of experience networking in Richmond, VA and growing knowledge in REI I'm finding many investors in the area seem to be wholesaling and flipping in low barrier to entry areas (Petersburg, Hopewell, East End, south of the river along Hull St) and also running Air BnB's (yet legalities here seem to be a pain with recent changes).

What areas would be recommended for lower barrier to entry price point for long-term buy and hold? It seems that most lower cost areas I'm finding correlate pretty high with section 8 or higher crime stats. Getting started my goal is to have a first property that ideally has less headache potential.

Thanks!

Grant

Grant, welcome to RVA investing! Investing for the long-term hold in SFH is getting harder and harder because financed terms well exceed LTR income. Some are forcing income with STRs, but the crackdown has started and only a matter of time before that could go away.

A few ways to buy and hold if you are needing it to cash flow: 

1) 5% down conventional loan on a 2-4 unit. Live in it for at least a year and rent the other units out. These are hard to find in RVA that arent already 70 years old and prone to expensive repairs/rehab

2) Buy with creative financing like subject-to or seller financing. Those are much more likely to be potential cash flow. 

3) Research Pad-Split. That forces some high rental income. Proximity to bus lines seems to be important, from what I have gathered. 

Quote from @Kevin D Key:

I am a retired 63-year-old military veteran considering giving a rental property to my only son, a 22-year-old senior in college. The rental home in San Antonio, TX is completely paid for and has a market value of about $356K. Option #1 I'm considering using a Cash-out Refinance to take out 80% of the equity $284K to use to help my retirement. The house will then continue to be a rental property using a Property Manager and having good potential to appreciate in value but will have only a small cash flow. I'll use a "Transfer on Death Deed" to give the house to my son after I die (which would avoid probate.) Option #2 that I'm considering is to sell the house using a Real Estate Agent which will cost approximately 9% total (in agent fees and closing costs) plus additional Capital Gain Taxes (about 15% of the capital gain of $150K which would be $22K). My federal tax bracket is 12%. I would use some of the remaining profit to help my son with a down payment on his 1st house. Which Option do you recommend to help my son get a good start on life after he finishes college.

Concerned Dad

 First, thank you for your service to our country!

Second, you are a great Dad that is setting your son up for a great start into building wealth. 

Luckily, you can achieve both goals! Debt is tax-free, so I would advise to do a cash-out refi to use for yourself AND you can "gift" funds for your sons down payment. Be sure to show the papertrail of these funds, as his lenders underwriters will want to confirm the money has "seasoned" 

Put the rental home in a Trust (or maybe the Transfer on Death does the same thing) where your son inherits the property with the new step up basis. He can then decide on what he wants to do with the home to leverage the eqiity tax free! 

The last thing you should do is sell the property and take a tax hit, unless you need the full funds for an immediate need. 

I believe my above recommendation works best for your goals, but contact a Real Estate CPA in your state to confirm. 

Quote from @Thu Minh Dam:

Quote from @John Norman:

Quote from @Thu Minh Dam:

Hi everyone!

I will move from FL to McLean, VA in next several months. With 300k - 400k cash (no loan), which area / city in VA should I buy a rental property (SFH) while I need cash flow (more than appreciation) ?

I really need your help and highly appreciate your all comments. Many thanks from a newbie 🥰

questions: 
1) What monthly/yearly cash flow are you wanting on your $400k? $2,500 a month gets you a 7.5% CAC
2) Are you wanting to keep it longterm or looking more for cash flow for lower amount of time?
3) Avoid HOA homes. HOA eats into your cash flow and can be a nightmare with rentals
4) The closer you get to DC, the higher your rents will be. But $400k doesn't go far.

Do you have to buy real estate with the $400k? Is it a 1031 exchange? 

You'd get much higher returns as a Private Money Lender or as an equity partner in a renovation project to refi into a DSCR once rents are established

Thank you John for spending time on very detailed reply. I truly appreciate it.

1. Yes, 7.5% COC ROI is good to me.

2. Yes, I will keep it for long term.

3. I note it down. Thank you for remind me.

4. I think that with $400, I can only find a SFH in Woodbridge or Fredericksburg.

5. No, it’s not 1031 Exchange 

Once again, thank you so much for your sharing.

 You are on the right path and shifting your focus down further south towards Fredricksburg will open up your window. 

I specialize in creative financing ideas as well, so with you having 300-400k, you have a great opportunity to even find some properties to create "value add" to really pump up your appreciation. 

Quote from @Thu Minh Dam:

Hi everyone!

I will move from FL to McLean, VA in next several months. With 300k - 400k cash (no loan), which area / city in VA should I buy a rental property (SFH) while I need cash flow (more than appreciation) ?

I really need your help and highly appreciate your all comments. Many thanks from a newbie 🥰

questions: 
1) What monthly/yearly cash flow are you wanting on your $400k? $2,500 a month gets you a 7.5% CAC
2) Are you wanting to keep it longterm or looking more for cash flow for lower amount of time?
3) Avoid HOA homes. HOA eats into your cash flow and can be a nightmare with rentals
4) The closer you get to DC, the higher your rents will be. But $400k doesn't go far.

Do you have to buy real estate with the $400k? Is it a 1031 exchange? 

You'd get much higher returns as a Private Money Lender or as an equity partner in a renovation project to refi into a DSCR once rents are established

Quote from @Natalia Anglero:

I've been the owner for 2 years of a 1920s single-family investment property.
The property is in need of a new roof and HVAC system, as well as several other necessary repairs. My current focus is on identifying the most suitable loan option to fund these essential renovations. It's worth noting that I initially acquired the property through a conventional loan, and I intend to tap into its equity once the renovations are finished.

Please share your advice on renovation loans.

What are the costs of repairs? 

How much equity do you currently have? 

What is the ARV when repairs completed?

What is your current interest rate and what is your plan with the equity you want to tap into? 

I am RVA Realtor and investor, so if you need any insight to equity/ARV, I can help. Feel free to message me to bounce any ideas

I am in RVA and own/manage a few properties. What is the sq ft and bedrooms, county, and lawn care requirements? Do properties use gas? 

Gargbage and recycling are typically not included, unless the local HOA has it as part of their dues

@John Ambe Welcome to RVA investment journey! There are quite a few REI meetups around the area at different times of each month. I just started one with a group a few months ago and we have 50 at out latest meetup.

We meet every 3rd Thursday from 6:30-8:30 in the Innsbrook area off Cox Rd. We have a facebook group as well, so please reach out for us to connect and I can add you to that group as well. 

This invite goes out to anyone else who wants to come in a collaborate with like minded REI people on their journeys as well!

Great job on looking to take action on your first investment property! Double and triple check your numbers to make sure you have all of your costs and rents confirmed. It is super difficult to find a home in RVA that will cash flow with traditional mortgage techniques, especially an on market one hanging on the market. 

From the sound of your concerns, what was the quality of the renovation and who did the work? I've seen some nightmare "renovations". 

Quote from @Steven Hall:

I bought a house out right at a tax auction. Need to find a loan to fix it before I sell it. Whats my best option?

I am in Richmond and connected to Private Money lenders. Have you run your repairs numbers yet? Is the home in central virginia?