All Forum Posts by: Justin Fox

If you know your market, can estimate repairs well and have the extra cash, then all you have to wait on when dealing with a cash-buy is a Survey, Title work and then closing.  When you deal with a lender then the Appraisal comes into play (longer wait time), loan officers and underwriting asking you for the same documentation over and over, possible required inspections and etc.  It's just easier and quicker to buy cash and then cash out 6 months after the purchase.

Yes.

@Bruce Knauff No, you don't have to do the full 75% for Cash Out Refinances. I know a few lenders have told me that they don't lend under a certain amount. One was 50,000 and another was 70,000. If that's the case then to get around that you might could just get a HELOC and only use the 20,000.00 during the draw period (Or however much to keep your CF to your liking [200.00+ for example]). You'd have to investigate that more though as I've never used a HELOC, only Cash Out Refinances. For example, there could be lower origination fees for HELOC and might not require title work versus a Cash Out Refinance.

Would be cool to have a little STR place in/around Florence. It's pretty much equidistant from Milan, Venice and Rome, with Bologna even closer. Make a little money and carve out 1.5 - 2 weeks of deductible vacation each year would be nice : ).

@Bruce Knauff

Right now you're in a pretty good position because you have ~458.00 in CF left over but you haven't mentioned how much of that is set aside for repairs/cap-ex/vacancy. Based on your numbers it should probably be ~182.50/month set aside for those items. So you're left with 275.50 in net CF. If you cash out @ 75% LTV (assuming it's worth 70,000) then you're looking at losing another 127.00 per month for the higher mortgage. I think that's too low of CF. I would keep it like it is or sell if you need the cash more than the income.

If you can sell for 70,000 then after paying realtor fees, prorated taxes for the year, closing and home warranty you should be left with ~65,000 (you should already have a valid survey).  That would leave you with 29,000 cash to seller at closing, leaving you with 20,000 after paying yourself back the initial down payment.  That's 5 years of cashflow after taking into consideration long term capital gains:

If you finish out the lease, you'll be past the year and 1 day for a long term capital gain.

If these number hold true then you're looking at nearly 3x'ing your money in a year and a half.  That's not even including the 3306.00 you'll make over the year in rents, and the repair/cap-ex and vacancy funds you'll get to take back if you don't have any big unexpected issues until the sell.

Just my .02

@Andrew Grams Check out innago.com.  My buddy just had me set him up on there for his RV park.  It's pretty nice and completely free.  They make their money from fees when the tenant pays their rent via bank or credit card.

@Kay March Buyers paying over appraised value with no seller concessions.

Unless driving a nice car or wearing nice clothes gets the frame labor down to $2/sqft or gets the borrower to pay for their agent's commission and all closing, I don't see the benefit.   

Most of what little RE network I have is built through buying/selling property.  If the person isn't someone you've met in this environment or an involved spouse, why bother talking about it?  It's just going to come off as bragging or they're simply not going to understand anything you're talking about.  I would never just chit-chat to a friend, colleague or family member not involved in RE, in any serious manner, about RE investment.  They don't know the first thing about RE investing, what I've done, the steps involved or the success I've had from it, so why would I pseudo-consult with them knowing that they're less knowledgeable than I am?  The only validation I need is a check at closing, which in turn keeps me motivated.

The local title company here told us it wouldn't provide a title policy on a property (w/ or w/o improvements) with a tax deed for 4 years.  If I ever found a good deal on empty lots in decent locations, I'd still buy them up and just wait it out.