All Forum Posts by: Jonathon Buder

The experts usually say to pay down revolving debt like credit cards first.

Like Jon said, the less balance and the better balance to available credit ratio you have, the higher your score will get over time with good payment history.

Make sure you keep some revolving accounts open instead of closing them if you get a new one (as long as you don't go over about 5, that's the general rule). They look at how long an account has been open to determine your score.

Thanks again.

I understand what you mean about the TCO of a residence and living within your means.

I'm trying to find the best possible first property to buy which will also be a good building block to investing in real estate.

I started out by looking at the purchase price and trying to find the very cheapest detached SFH's in this area. That would lead me to something much cheaper than $250,000, but it'd be in a part of town in which I wouldn't feel like taking a stroll through the neighborhood after dark and wouldn't want to raise kids in or be proud to have people come visit.

Then I started looking at price per square foot as a factor, and considering the possibility of renting out some of the bedrooms (to friends or co-workers I trust) to pay for some or most of the mortgage payment. I mean, that's not an ideal situation forever, but it might be neccesary for now.

That's what got me looking at properties in that price range.
This other one was my top choice based on the price/sq. ft. and bedrooms, and it doesn't look or sound like it needs much work. I think when it came time to move out, I could rent the whole house for about $2300, and the mortgage payment would be somewhere around $1500.

Ouch. Jon, thanks for shedding more light on the reality of this one. It saves me from blowing money or time on a what is looking more like a losing proposition.

Looks like I'll have to start much smaller and have a stable place to call home and a lot more money in the bank before I can look for another one like this.

For the heck of it, here's the link to the page on the property.
http://www.redfin.com/CA/Spring-Valley/4304-Avenida-Gregory-91977/home/5632000

Thank you for the reply Stephen.

Your point makes sense about the mortgage amount and the necessary rent amount. This one might not really fit into my game plan of buy-hold-rent. Still, I will do more homework and see if it's viable to flip it later on.

Just curious, you mentioned it would probably be a non owner-occupied loan. Is that generally the case when refinancing something bought with hard money? I was talking to a lender who specializes in VA loans and bounced this off of him; he thought it would be feasible to refinance with an owner occupied VA mortgage if their inspection and appraisal was favorable.

I will get in touch with Joel and mention your name, thanks for the referral.

Good morning/afternoon everyone.

I have found a property that seems to be a great deal with a lot of potential, but it's by all means a fixer.

The price it's listed for it $250,000. It just got listed yesterday. The estimate from Zillow is $507k, Eppraisal is $530k.

It's a once-high-end house on a big lot with mature trees, bushes, lots of privacy, etc. The pool is full of algae, the inside is full of junk, the carpets and possibly floorboards are ruined because there's a hole in the roof and it's been raining for the last week. The location is wonderful and the median home price is $520k.

I would like to take on the project. Unfortunately, at first glance when I looked at a hard money lender's terms, at 1 year interest-only at 12.5% APR, the payments would be $2604 per month.
Please tell me if I'm doing it wrong ((250,000 * 0.125) / 12)).

I would assume that the after-repairs value would be right around the median price for the neighborhood ($520k), but my intention is to live in it once it's habitable and then rent it out if I have to be an owner-occupant to get better terms on a deal I find in a year or two.

I'm going to have a professional handyman friend of mine go back with me to take a look and get a rough idea of the cost and timeframe to do the repairs.

So my question is this - How can I go about financing $250,000 for a fairly short period of time, during the repairs, and defer the payments or amortize the total amount to be paid over a longer time period?

My first thought was to get a longer-term loan, say 3 or 4 years, for the amount of maybe 6 months' HML payments at $2600/month. This would be manageable and I could pay it off early after I refinanced the property after repairs for a 30-year term.

Then again, long-term financing of a short-term loan sounds dangerous and almost as bad as financing a 'down payment'.

Please share any thoughts you might have. I have a few possible local contacts for a private financing agreement too...

An added complication is that my income is currently $1900/month net, with no housing payments, and in a couple months it will be $3850 but I'll have to move out of the free government quarters.

Thank you Charles and Bryan. And Bryan, I can see your point regarding the friendship/business line. I will have to tread carefully when/if I have to go there.

Hello all,
I've just recently gotten bit by the bug of real-estate investing, and for the past few weeks I've been reading books about it and browsing the internet to learn as much as I can on the subject.

As far as I can tell, it seems like it'll be a perfect way of combining my interests (photography and traveling) with the ability to make a living without working for someone else, and experience the satisfaction of fixing and building things.

I'm active duty military now, and I'm planning on getting out in early 2013, then going to school using my GI Bill (hope to have my BS-BA/Finance finished by the time I get out, and continue to a MBA or go another route). My goal by that time is to have enough monthly income to sustain myself and my significant other and continue finding good deals, fixing 'em up, holding onto 'em and renting to friends and acquaintances I know to be dependable.

On this site, I'm looking to network with others in the area and to seek guidance when I have a quandary or when I find an opportunity I need advice on.