All Forum Posts by: Katrina Edwards

I actually sold it to another client of mine in May for $1,012,500.  We've already increased the monthly income by $350.00; we haven't spent any money yet, but do plan to do the exterior paint and wood repairs in the next few months to the tune of about $12k.  They want to buy another.  Have anything to sell that might be interesting?  They're all cash...

This property is on S. 2nd Street near Margaret.....

Sounds like you're looking to do a short sale.  Requires bank approval.  Unless the lender is paid off or agrees to take less than the amount owed, you're not going to get clear title and you have nothing to sell to a prospective buyer.  There is probably also a due on sale clause in the existing mortgage.  That means they can call the loan due as soon as title is transferred to another party.   Why would someone sell you a house worth $100k if they only owe $60k for $25k?  Something is fishy.  Even if they sold it for $90k to someone else, they would still walk away with the same cash in their pocket.  Maybe they are trying to scam you.  Be careful...

Hi. So the important thing to remember is that when co-finance a property with someone to whom you are not married, BOTH folks get hit with the debt on their DTI calcs but you'll only get credit for the % of the income you claim on your taxes - the lender view is that if your partner dies, you have to pay the whole thing anyway. It's a double whammy. If you trust your partner, I'd recommend taking turns with putting the financing into your names. It frees up the other person to take on the next loan. Does that make sense?

Some lenders don't like a non-borrowing co-buyer, but you can do it.  I've done several deals this way....

Hi everyone!  I was approached by a client yesterday who is planning to sell her triplex in San Jose, CA close to SJSU. I think this is a perfect house hacking opportunity for someone.

Here are the details:

List price being considered: $999,000

Unit mix: 3/1, 3/1, 1/1

Rents: Unit A $2850 includes water, Unit B $2550 no utilities included, Unit C $1450 includes water, electricity and garbage

The 1/1 is  separate cottage built probably around 1940 or so and updated periodically.  It should be renting for $1800 or so per month, but the tenant is long term and my client is generous.

The 3/1s are in a Victorian building one unit up and one unit down.  Large bedrooms and usually rented by groups of students. Often with co-signing parents.

Street parking only for all units.

Garbage runs $33/month per unit and A&B reimburse the LL directly for this expense.  Cottage has a submeter for electricity from the A unit but the electricity is currently included in rent.  Water runs about $100 every two months for A&C who share a meter.  B is separately metered for all utilities.

Rents on turnover would probably be about $3k/month for the 3/1 units and $1800 or so for the cottage.

I would budget $50k in renovation expenses over the next 1-5 years to include: termite treatment and repairs, exterior wood repairs and repainting, new roofs, minor interior rent ready activities.

When I run the numbers at current rents, I get a 5.9% cap and 12.5 GRM.

Current rents from A&B should cover a first mortgage and property taxes.  

So, who wants to house hack? Private message me if you're interested. We'll probably go on the MLS in the next 2-3 weeks....You can search Triumph Property Services on craigslist in South Bay and find the ad I put up yesterday which includes a few photos.

Good advice above.  I'd work with the utility company to get a history on the utility usage.  If there is a big jump in usage only for the new resident, I might be included to chalk that up to operator error.  Hers.  Maybe consider giving a small credit, but I think half is likely not fair to you.  I'd be curious to hear if it was operator error....

Thanks everyone for your replies.

The way I have it in my brain, is if one does a land sale contract, one only claims the revenue from the sale in the year that it is actually paid.

That way, the taxes would not be due and payable all at once, but over time.

Thoughts on this aspect?

I feel your pain.  Some appraisers feel like they know everything and like to play "god" and some try to meet the customer expectations.  You never quite know what you're going to get.   

Have you thought about a first position HELOC from EverBank? I just learned about it and tried to use it for my NOO duplex, but my darned appraisal didn't hit the value I needed and now I'm stuck with that appraiser's "opinion" - grrrrrr. It's disappointing because my rate would have been prime LESS 1.01% and I could have drawn some equity out if I wanted to.

Anyway, if you have a good amount of equity in your home, the Everbank first position HELOC might be a good alternative. Also, CommonWealth CU has a great HELOC that's fixed for the first year at 1.99% and then adjusts with prime after that.

Let me know if you want an intro to my guy at Everbank.  Cool product, good folks to work with. 

Can we talk about seller financing? Always a weird thing in my neck of the woods and fairly uncommon here for SFH.

Do you have an opinion on either for a seller who owns a SFR free and clear and is thinking of selling to tenants?

The sellers' concerns are 1) paying capital gains taxes upon sale or scrambling to find an exchange;  and 2) continuing an income stream that is relatively stress free. 

Current rent is $4250.00; property value is around $1.5M and their taxable basis is probably around $100k. They are thinking of financing about $1M for the tenant/buyer.

Is it easier/harder more/less expensive to foreclose on an installment contract rather than a deed of trust?

I'd love to hear your opinions and experiences...

Yeah, ok, so if the property was in the bay area, you might have had a different strategy. Not sure if you used a real estate agent to write your offer, but that might have served you better - especially for a property listed on the MLS. We really do add value! (toots own horn)

Anyway, sometimes getting a seller to accept an offer means appealing to the seller or listing agent in some way - ego, heart strings, etc. That's where your agent can come in handy.  We actually talk to each other and ask probing questions that would be awkward coming from a buyer.  You'd be surprised at some of the things that listing agents have shared with me about their sellers and buyer agents have shared with me about their buyers.  I figure the extra intel helps MY clients so I'm all ears. 

In this case, your GRM and cap rate were so strong, I wonder if they are not in contract OVER their original list price. What city was it located in? Totally curious.

But truly, don't beat yourself up over "what ifs" on this deal.  The right deal will come along for you.  Just be open to it and keep your eyes open ;-) Maybe I'll see you around town.  I have an office in Campbell as well as on the one in Palo Alto.

 I like EverBank.  I use Jim Taggart.  Here is a link to his web page that includes his phone number: 

https://www.everbank.com/_experts/lending/j/jim-taggart

Give him a call and see if he can help you. I use him for 95% of my financing and have a lot of colleagues/friends/clients who are also happy with his services. Doing a duplex refi on a 1st position heloc right now....Interesting product. You should call him just to hear about it. Everbank portfolios their HELOCs. And you can use a 1st position HELOC to purchase 1-4...A separate division does commercial financing. Jim can give you that info. Hope this helps.