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All Forum Posts by: Karina Busch

Karina Busch has started 4 posts and replied 25 times.

Post: Working with Agent- what to expect?

Karina Busch
Pro Member
Posted
  • Posts 25
  • Votes 17

Thanks for all the replies everyone. I had a heart to heart with my agent after looking at some properties yesterday and I think she has a better idea of what I am looking for and how to help me better moving forward. We put in an offer yesterday that was accepted so hopefully this is a good step in the right direction. 

Post: Working with Agent- what to expect?

Karina Busch
Pro Member
Posted
  • Posts 25
  • Votes 17

Hello,

I'm trying to figure out what I should be expecting/getting from my agent? I am a newer investor and starting late (50). We have purchased a few properties over the last couple years paying cash but now trying to have a more concise plan moving forward since finding BP. Everyone on here says get a RE agent to work for you and help find/facilitate deals. 

Long story short I signed a Buyer's Agent agreement with an agent who we had purchased through (they were listing agent on one we bought) and liked. The first week they sent me a few properties on the MLS but since then it has just been me sending them properties I'd like to see and them arranging the showings. Largely that is ok but honestly I want someone who can tell what is a good investment and will steer me in that direction not just me saying hey I like this one. Or also telling me hey even though you like it this is not a good deal, or location, or whatever. 2w ago I messaged to see a property but they were out of town for two days and then I was. 10d ago I asked about seeing another property which wasn't available to look at until this week. It's been crickets. No follow up on either one.

I know everyone is very busy so I haven't been pushy but I feel like I am not really getting any value from this relationship. The contract is for 6m! It has been about 2m and we have looked at 3 homes now. Two were not good investments, one I liked ok but needed a ton of work and I thought was overpriced. They dropped the price and went under contract before I could make an offer. Maybe they think I'm not a serious buyer? Or they are just too busy? I am a high NW professional with excellent credit, pre-approved and can also make cash offers, and own 6 properties currently.  

Is this normal? Just not a good fit for me? Is it appropriate to request to be released from the contract so I can look for someone else or just go it alone like I have in the past? I don't want to be a needy, unreasonable client but I would like to work with someone who I feel like is in my corner and trying to help me move forward. Would love people's thoughts on this and experiences. Thanks!

PS: Looking to stay local. Not ready to be investing in faraway lands and I feel like there are good opportunities near me for growth. Thanks!

Post: What Interest Rates Are You Seeing?

Karina Busch
Pro Member
Posted
  • Posts 25
  • Votes 17
Quote from @Dina Schmid:
Quote from @Karina Busch:
Quote from @Dina Schmid:

We have a winner! I called local banks and found 6.125% with reasonable closing costs. I was honestly dreading doing the calling, but am so glad I did. 

I have to give a shout out to @Michael Baum because I honestly would have never thought to call local banks directly when trying to get a house from OOS. 


 Congrats of being under contract and finding a better loan. I am in KY and have been quoted 6.5-8% on investment properties. Can I ask what bank you found for the 6.125%? That's great!


It's with South Central Bank. Or I should say "was" as the rate appears to have gone up a bit. 


 Great, thanks! That's who I've had the best quotes from so far too. :) 

Post: What Interest Rates Are You Seeing?

Karina Busch
Pro Member
Posted
  • Posts 25
  • Votes 17
Quote from @Dina Schmid:

We have a winner! I called local banks and found 6.125% with reasonable closing costs. I was honestly dreading doing the calling, but am so glad I did. 

I have to give a shout out to @Michael Baum because I honestly would have never thought to call local banks directly when trying to get a house from OOS. 


 Congrats of being under contract and finding a better loan. I am in KY and have been quoted 6.5-8% on investment properties. Can I ask what bank you found for the 6.125%? That's great!

Post: Need at least $15,000 a month on $2 million investment (1031 exchange conversion)

Karina Busch
Pro Member
Posted
  • Posts 25
  • Votes 17
Quote from @Dave Foster:

Thanks for that shout out @Steve K.@Srinivas Reddy, I appreciate how you're working backwards into your desired cash flow. When looking at retirement you'll want to be focused on only two of the IRR calculations primarily - cash flow and depreciation. It's relatively easy to get an IRR of well over 10% in real estate when you include appreciation and amortization of a loan (particularly. amortization of a loan). And it is the loan that really bumps up your IRR. But a loan increases your risks as well.

Your rental right now certainly isn't producing much in terms of cash flow. CA is tough to find great cash flow properties as a % of your real estate value. A $2 mil property owned free and clear is probably going to translate into $70K of NOI a year. Maybe less. If you factor in tax savings from depreciation you'll probably add another $10K to that annually. But that still leaves you way short of your stated goal. If you do the 1031 exchange and use the proceeds as down payments on a couple of properties you'll get the boost in the IRR from amortization and appreciation. But that doesn't necessarily put more cash in your pocket monthly. And it introduces the risk of debt.

A 1031 into a cash property where you can later build and rent an ADU would be awesome. The ADU would give you additional cash flow, depreciation, and appreciation.

But as far as using your tax free primary sale to pay off the rest of your investment mortgage??? Personally I would want to take every tax free dollar off the table I could. Let your investments and 1031 take care of itself. Use the tax free money as another nest egg. You can do anything with it - rent a property, buy the ADU, invest in equities, continue to fund a roth, There's a lot you can do with it rather than trapping it back inside a 1031 exchange.


This was my thought. I am a newer investor, so take it with a grain of salt, but I am curious why you would take the $500k from sale of your primary and pay off the rental mortgage and end up with all that money tied up in the 1031? Is that the actual capital gains on the primary home or just the equity in it, and are you married filing jointly? You likely won't even have to pay taxes on that if your gains are under 500k. I would keep that money separate and just 1031 the other money from the sale of your rental property if you choose to. I don't see how you would benefit from paying down that mortgage before selling it. 

Best of luck with whatever you decide to do with your proceeds! :)