All Forum Posts by: Josh Harold

I am an Associate Broker and I have been approached by my Broker which owns the independent Brokerage in purchasing the business. I am looking for a lender that can do this. No RE involved just the business. Any recommendations is greatly appreciated. 

@Chris Levarek

At the end of the day I invest for cash flow ultimately. By the time I pay closing costs for a refi it may not make sense to refinance to regain 15k but my goal was to pull out the Reno cost plus my cash I initially put in the deal. I have got to get smarter. I was listening to Grant Cardone and it sounds like he recommends buying investment properties as primary residences and before they close “change your mind” that you don’t want to live there after all but continued to closing. By doing this he is getting loans with as little as 3% down instead of the 15-20% like I paid. Just have to keep plowing forward

@Neil Henderson

Thank you for your response. The struggle is real when you go against the typical system. It definitely makes things harder when your not an employee. I think I’m going to make myself a w2 employee from my own company :)

Ok I’ll try to be quick and to the point.

I bought a single family 2 years ago in WV that also came with an ADU in which the ADU is zoned for commercial and the single family is zoned for residential. The ADU was simply an empty shell on the inside once used as business space. I finished the 560 sf adu and it's currently rented as a one bedroom apartment. I was tight on cash when I done the renovation so I put it on a credit card thinking I could pay off the card once I refinanced. Back last year I lost my job as a sales engineer due to covid so I decided it was time for a career change and I went and got my real estate license so I am now working as a contractor and not a W2. I went to refinance with a local lender and they won't count my income currently because it's not on a tax return so they are only counting my wife's income (she's a contractor too). Our income is now showing up as 50% of what it was on the tax returns, they are denying us a refi because debt to credit limits.... based on my comps in the area I have forced appreciation up 50-60k from what I paid initially to market value now. I have about $15k in the renovation because I done the work myself. My question is should I keep calling more lenders to see if I can find a more liberal criteria or should I just take out an unsecured loan to get the funds off of my credit card?

In my limited experience appraisals on new deals seem to come in just right above selling price, but I’ve had appraisals for home additions etc come in much higher. Do appraisals typically come in higher when the properties aren’t in “sale” mode?

Thank you @Lydia S. For your response

The property isn’t in a poa or hoa. It’s not in city limits either, just right outside in county jurisdiction.

I talked to HVAC contractor and my electrician and I learned some more info from the inspector. The price for a new low end outdoor condenser in my market is $1800 for parts and labor.

The black swan that I learned from the inspector (which now is my major barrier) is that the 2nd building is being fed power by a 100 amp sub panel from the main house BUT it’s only being fed with 50 amps.... I would need to either drop a new service to the 2nd building or upgrade the feed coming from the other building in which i don’t think that there is enough power from a 200 amp service to feed 2 finished living spaces. Either way adds up to a good bit of money not to mention the 600 sf 2nd building needs finish work - Everything. HVAC, flooring, kitchen and bath all needs put it. It’s basically a blank slab.

So i am working on my first rental deal. It’s a 3 bedroom one bath PLUS an additional 600 s.f. structure on site (additional structure needs finished out which I am planning on being a studio apt). According to the bp calculator my cash on cash investment with both structures rented would be 15% given my realtor given market rental prices.

Home inspection was completed yesterday and I have to admit I am a little concerned. I’ve since asked for further clarification but I have two major concerns. 1.) the 2 ton HVAC condensing unit is inoperable.

2.) their is a 100 amp sub panel only being supplied with 50 amps. I know it depends on what the sub panel is supplying whether or not it is a concern. Hence the needed clarification. And a couple structural issues - 1 rotten rafter and a a rotten sill board....

I suppose to summarize my question or the reason I began this topic is this:

Given there are rarely ever any perfect homes esp in rental properties,at what point does repair cost make a property outrun profitability?

The two structures(if both are rented) would gross me approximately $1500/mo with my escrow running around $600. Contracted Purchase price is $70k

The initial cash investment with dp and repairs will be around $25k - IS it worth it or will $25k be better spent in a totally different property?