All Forum Posts by: KC Morgan

Quote from @Nicholas Pangallo:

Hi All! 

I have ran Airbnbs, Crashpads, and long-term rentals for 3 years and I created a platform that allows homeowners to list Crashpads and crew members and homeowners to make their monthly payments online and search for Crashpads. The website is: https://www.2ndlanding.com. We just launched so if there are any suggestions as a user, we welcome all feedback! We want to make it simple and easy to use!

 Hey Nic,

I'm researching opening a crash pad right now and working on insurance for the pad. I'm an airline pilot by profession, and have used crash pads in the past, and now working on setting up my own. Do you have any direction for a company that provides insurance. What I've been told by short term rental insurance is that they don't provide a policy for something that allows individuals from different groups to share the same space.

Thanks,

KC

Hello smart people of the internet! This isn't directly related to this thread, but I thought it might be a good thread to ask this on.

I bought my first property several years ago (property A). I house hacked for awhile with some roommates, until I got married and now my wife, 3 boys, and I have outgrown property A. I'm in the process right now of doing a cash out refinance so we can put 20% down on a new home (property B), that is a fixer upper. We plan on living in property A, until renovations are complete in property B. As such, my loan officer has said we need to refinance property A, as an investment property, since property B will be my primary residence. I was chatting with him today and we started talking about lender credits. I'm rounding, but my new loan on property A should be around $200,000 at 3.125% and I'll pay about $4,000 in closing costs. I haven't decided yet on whether or not I am going to sell the home or keep it as a rental.

If I do decide to sell property A after we move into remodeled property B, I am trying to understand the advantages/disadvantages of lender credits. The way I understand it right now, is that I could receive a lender credit of 2% that would cover a portion of, or all of my $4,000 worth of refinance closing costs on property A. In exchange for this credit, my interest rate would go up from 3.125% to 3.5% or so. It's a difference of $41 in monthly mortgage payment, with this example on a 30yr loan. Obviously I'd be paying much more if I took the loan to maturity, but if I did plan on selling property A as soon as the renovations were complete on property B (6 months or so), I would think that would be a home run for me. I'd pay $41/mo x 6 months = $246 to get them to cover $4,000 worth of closing costs.

Admittedly, it feels like it is too much of an ace in the hole for this to be true. So people of the internet, what am I missing? Does this sound like a good strategy if I do sell property A? A follow up question is whether or not I would be subject to capital gain taxes since the loan will be considered an "investment property"? Does anyone have any thoughts or guidance on this?

Thanks in advance for any and all thoughts!

-KC Morgan

Hello smart people of the internet! This isn't directly related, but I thought it might be a good thread to ask this on.

I bought my first property several years ago (property A). I house hacked for awhile with some roommates, until I got married and now my wife, 3 boys, and I have outgrown property A. I'm in the process right now of doing a cash out refinance so we can put 20% down on a new home (property B), that is a fixer upper. We plan on living in property A, until renovations are complete in property B. As such, my loan officer has said we need to refinance property A, as an investment property, since property B will be my primary residence. I was chatting with him today and we started talking about lender credits. I'm rounding, but my new loan on property A should be around $200,000 at 3.125% and I'll pay about $4,000 in closing costs. I haven't decided yet on whether or not I am going to sell the home or keep it as a rental.

If I do decide to sell property A after we move into remodeled property B, I am trying to understand the advantages/disadvantages of lender credits. The way I understand it right now, is that I could receive a lender credit of 2% that would cover a portion of, or all of my $4,000 worth of refinance closing costs on property A. In exchange for this credit, my interest rate would go up from 3.125% to 3.5% or so. It's a difference of $41 in monthly mortgage payment, with this example on a 30yr loan. Obviously I'd be paying much more if I took the loan to maturity, but if I did plan on selling property A as soon as the renovations were complete on property B (6 months or so), I would think that would be a home run for me. I'd pay $41/mo x 6 months = $246 to get them to cover $4,000 worth of closing costs.

Admittedly, it feels like it is too much of an ace in the hole for this to be true. So people of the internet, what am I missing? Does this sound like a good strategy if I do sell property A? A follow up question is whether or not I would be subject to capital gain taxes since the loan will be considered an "investment property"? Does anyone have any thoughts or guidance on this?

Thanks in advance for any and all thoughts!

-KC Morgan

Hello smart people of the internet!

I bought my first property several years ago (property A). I house hacked for awhile with some roommates, until I got married and now my wife, 3 boys, and I have outgrown property A. I'm in the process right now of doing a cash out refinance so we can put 20% down on a new home (property B), that is a fixer upper. We plan on living in property A, until renovations are complete in property B. As such, my loan officer has said we need to refinance property A, as an investment property, since property B will be my primary residence. I was chatting with him today and we started talking about lender credits. I'm rounding, but my new loan on property A should be around $200,000 at 3.125% and I'll say about $4,000 in closing costs. I haven't decided yet on whether or not I am going to sell the home or keep it as a rental. 

If I do decide to sell property A after we move into remodeled property B, I am trying to understand the advantages/disadvantages of lender credits. The way I understand it right now, is that I could receive a lender credit of 1%-2% that would cover a portion of, or all of my $4,000 worth of refinance closing costs on property A. In exchange for this credit, my interest rate would go up from 3.125% to 3.5% or so. It's a difference of $41 in monthly mortgage payment, with this example on a 30yr loan. Obviously I'd be paying much more if I took the loan to maturity, but if I did plan on selling property A as soon as the renovations were complete on property B (6 months or so), I would think that would be a home run for me and not something I would necessarily want to talk to my lender about. I'd pay $41/mo x 6 months = $246 to get them to cover $4,000 worth of closing costs. 

Admittedly, it feels like it is too much of an ace in the hole for this to be true. So people of the internet, what am I missing? Does this sound like a good strategy if I do sell property A? A follow up question is whether or not I would be subject to capital gain taxes since the loan will be considered an "investment property"? Does anyone have any thoughts or guidance on this?

Thanks in advance for any and all thoughts!

-KC Morgan

Thanks Jon, I'll reach out to her. It looks like she's got a meet up tomorrow that I can attend. Thank you so much for the lead.

KC

Hi guys, I have a home that is going to auction on the 20th of this month in Las Vegas that I’m very interested in purchasing. I have the availability of family money to pay cash for it on the court house steps. It’s got a bit of a rough history and I’m looking for a local agent that specializes in, or is at least very familiar with, local laws regarding foreclosures to make sure I go in with my eyes wide open. Thanks, KC Morgan

That's great stuff Brian, thank you! Haven't heard back from him yet, figured I would give him the weekend and then reach out on Monday if I still haven't heard anything.

Hi guys,

I'm still searching for a deal and have been helped out by you guys in the past to avoid some properties. Thanks for the help! I'm on to a new property and seeking some advice.

I'm looking to house hack and this property is actually a couple doors down from my in-laws house -- which might be the first reason to stay away ;) But, if the deal is right then I can handle it! The property is currently vacant and when we've driven by has had broken windows, doors, and is in a general state of disrepair from what I can see on the outside. It has the reputation in the neighborhood of being the druggy house. I talked with the owner of the home yesterday who owns it with his son who apparently is the one who has been living in the house. He is interested in selling to me but needs to have a discussion with his son prior to talking turkey with me. He didn't give me precise numbers yet but I'm led to believe that he is probably upside down in the house, though it seems he is current on payments. He has told me that it's just becoming a big problem including having insurance issues. I didn't dig too deep on that, but I assume they have tried filing an insurance claim based on some of the damage to the house that is being denied. 

I'm still a newbie at this, but trying to just press forward with talking to sellers even if I stumble through it. I see two scenarios with this home. A) He's upside down but still wants to sell. B) He owes less than it's worth and I could potentially be on to something really good.

My question is a basic fundamental of being a Real Estate Investor but I've never done this before so I'm seeking advice. From the studying I've done, under scenario A I believe my options are Lease, Lease Option, or help him through a short sale. I don't know how I would be getting a great deal if I were to lease or lease option unless I signed a long term lease and somehow made a deal with the bank if they were to foreclose based on the Protecting Tenants at Foreclosure Act...don't really want to go there. 

Otherwise, I could help him through a short sale, and here is my big question. How is a short sale beneficial to him, and how do I justify making an offer that is 20% ARV?

Scenario B is much easier...the house is a problem he doesn't want to deal with and I can buy his house quickly at a discount and his problems are solved. Just for numbers purposes I know he bought the house for $472K in 2006, and there is another house a few doors down that is the exact same floor plan, same lot, etc..., that sold for $327K last month. I'm not sure if he has refinanced at some point but I assume so since he almost lost the house to foreclosure in 2010. 

He's supposed to call me back today so I'll keep you updated on what I find out. Thanks guys!

-KC

Michael C Gregory Is there any follow up to your initial question? I'd be interested to hear if you were able to negotiate something that was mutually beneficial (i.e., you got a property at a good price, seller avoided foreclosure and deficiency, and bank got rid of a non-performing loan). I should be talking to a seller today who is upside down and trying to make sure I understand how I can help him. -KC

Hi,

I'm a newbie investor with one property that I lived in for 2 years and now I'm cash flowing $600/month on it. The deal literally fell into my lap a few years ago and I'm dying to do more.

I found a distressed and vacant property that my wife and I would love to house hack and live in for a couple of years. I found it last year and after a lot of work, tracked down the owner. She was extremely difficult and essentially said that if I wasn't willing to get her loan current, pay all the liens/judgements ($30k+), pay attorney fees, etc, which shockingly nobody she'd talked to yet was willing to do, then she'd just let it get foreclosed on. It is now in pre-foreclosure and I'm trying to understand my options.

Option A) Buy at the foreclosure options. My understanding is that banks will usually start the minimum bid somewhere around whatever is still owed on the property. Is that an accurate statement? Obviously they want to recapture the greatest amount they can. Which in this case the property is worth less than what I believe to be outstanding on the loan which would mean if the min bid was high enough it probably won't be sold at the auction. Will a title search show how much is outstanding on the loan? Also can I order a title search on my own or does it have to be through a title company? The property ARV is about $500k and the balance on the loan is probably somewhere around $525k. The property needs about $50k worth of work.

Option B) Buy as an REO property after nobody buys at the auction and the foreclosure process is completed. The thing I don't like about this option is that it's likely I won't get as good of a deal. Who knows the bank may decide to become the flipper and do the renovation themselves.

Are there any other options I am not considering? The Breach and Election to sell has been filed with the county so the foreclosure process has begun. Is there anything I can do to try and get the property prior to the auction (which here in Vegas is pretty competitive)? If I can't get it at the auction is there anything I can do to try and get it before it's offered on the MLS?

This property is located in Las Vegas.

Thanks for any thoughts!

KC Morgan