All Forum Posts by: Kevin Noell

I'm interested in these areas for STR. Where is everyone finding these for sale? Just standard MLS listings?

@Caio Ferreira Torres, I would max out the 401k, as several have mentioned, since it is free money; at the same time, it forces you to budget yourself and build frugal spending habits early on.  Then check if your company allows 401k loans.  My company allowed me to take a loan out a couple of years ago on the 401k (up to half of the total, or $50k, whichever was lesser).  Some companies have a stipulation that it must be for a primary residence, so check on that.

The cool part about this is that you don't pay the bank the interest, you pay yourself the interest (back into the 401k), so it is a way to get cash right now, but accelerate the re-building of the 401k funds.  You should pay no penalties since this is a loan and not an official withdrawal.  Drawback is that if you're let go or change jobs, you either have to pay back the lump sum of what is owed at the time, or pay the early withdrawal penalties/taxes on the remaining loan.

If there is an enticing enough deal in RE, then it might be worth looking into this option even if it means there is a chance of paying substantial fees/taxes.  I was able to get the funds literally within about 4-5 days after the request was submitted.  Good luck!

Hi @Brandon Terrazas, I was able to close on a HELOC with Pentagon Federal Credit Union, which I learned about on this site. We closed about a month ago. This is a property we used to live in and still has the homestead exemption on it; the homestead exemption was required by them on the collateral property.

The property is a duplex, and I was surprised this wasn't an issue for them. I'm pretty sure it was 75% max LTV. Variable interest rate was 4.75% at the time but not sure about now. The process took about 5 MONTHS!!

@Jordan Moorhead, @Stephen Stokes, @Eric James, @Peter Walther, Thank you for the advice so far! This is very helpful and gives me confidence moving forward. I am leaning toward having an RE attorney help draft a purchase contract (Do you all know someone who offers such a service?). If the offer is accepted, I will be financing part of the purchase price. Though I have gone through the buying process a few times now and am familiar with those steps, it was done via the standard realtor + MLS route.

One question I didn't ask is whether an inspection is required.  Since I'm financing, I am pretty sure I will need to order an appraisal; however, I'm not sure about the inspection.  I've known the owner for some years and we've chatted a number of times about the house; I have a pretty good idea about the shape of the house, but I want to be ready with all the info and my ducks in line as soon as they are ready to consider my offer.

Hi @Jordan Moorhead,

Thanks for the reply. How does this process work? Some more info: we have been working with a realtor that we previously closed a deal on for our current home. There is no active contract with the agent though we've been working with her searching the MLS for a few months for a slightly larger sfr for ourselves. For any other home (on the MLS) we'd def use our realtor as the seller's agent is already paid for.

For this particular home, the seller doesn't have an active seller's agent contract but is considering it. I would expect a difference in fees for the buyer since, if the deal goes through, we found the deal ourselves (have known the seller for a few years and agreed they'd let us know when they wanted to sell before they listed on the MLS).

Am I understanding you correctly that your team offers a flat fee for such a service?  What does the "facilitator" role entail?  If we made an offer, it would be at the top of our budget (trying to avoid jumbo loan, so any increase in price or charges is straight out of our pocket) so we would have to minimize commission and fees on this one even on our end, to make the deal work.

I don't wanna throw our realtor under the bus or anything, but I just don't have the experience trying to make a deal like this work, so any info is helpful.  The main thing I want to clarify for myself is what the usual approach is as a buyer for an off market deal.

Hello,

I might have an opportunity to make an off market offer for a home in Austin, TX area.  Seller wants to entertain our offer before signing with a selling agent.  I have already gotten a quote from a lender at the price we are thinking of offering.  What are the components of this type of deal?  My initial thoughts were that I hire an RE attorney to represent us, draft an offer, and guide me through the buyer's steps of the process.  Seller gets their own attorney and we can agree or disagree on the offer.  To close, we'd have to use a title company.

I spoke with a title company that said they can represent me and provide the usual closing services (title insurance, etc.).  I'm not sure if seller has a particular title company in mind.  Are there companies that can mediate this type of transaction?  Basically provide the services throughout the process and have an attorney represent each side (conflict of interest??)?

I'm sure there are plenty of folks who have done something like this, so I wanted to see if there is a standard operating procedure or if this type of deal varies a lot from one to another.  I want to make an offer soon and just need to get my ducks in line.

Thanks in advance.

Thanks!  Hope to have some good news in a few months.

@William Brock, thank you for the update! Looks like you are close to the water with some nice views! I'm glad to hear it is working out for you so far. 61% occupancy is more than I thought for this area, so I'm pleasantly surprised. I am excited to get into the STR space hopefully in CL after having only long term rentals for the past 8 years. I am saving as much as I can for now and hope nothing catastrophic throws my plans into jeopardy. This year has been a roller coaster and not a lot of signs point to a different second half...

Hi @William Brock, I am interested in the Canyon Lake area for STR and stumbled on your thread. How is the STR you purchased a few years back doing? Do you mind sharing any insights or experiences?

Thanks for the feedback @Bryan Noth. You actually touched on a point I didn't mention but have been seriously considering as well, which is the 30 year fixed mortgage. That would come out to maybe $250 to $275 less than the current mortgage. It's a great problem to have! This was my original intent (to just lower the PITI) but when I started exploring the other loan options, having this thing paid off sooner does sound appealing. At the end of the day I do intend to continue investing in RE, so maybe the delta in cash flow when choosing the 30 year might win me over...