All Forum Posts by: Khoa Ha

Quote from @Carlos Ptriawan:

Quote from @Khoa Ha:

Quote from @James Hamling:

Quote from @Carlos Ptriawan:

I guess the most real-time important real estate metrics that we have right now is that the housing inventory in Nov 2022 is adjusted to Q2 2000 active inventory level. However nationwide price is barely moving from an all-time high and CA  state (as the leading 'crasher') is only regressed to Q1 2022/Q4 2021 price level.

That was very surprising actually. There's no 1-to-1 correlation between price adjustment and inventory level. 

 I did expect we would be around a 2-5% consolidation in national median pricing by now. I am a bit surprised how resilient the vast majority of country is holding, despite volume drop. The entrenchment seems to be a bit more then I had projected. 

How crazy would it be if we get into Feb, with a 50% drop in volume YOY, but remain flat on national median price, or near flat. That would be very interesting. I projected up to 15% consolidation on national median by end of Q1 '23'. 

Too much equity in the homes and people will not let go of the sub 3% interest rate if they can rent out the house for more than the monthly mortgage payment. Seller can just pull their property off the market if they can’t sell it at the price of a few months ago. The big different this

One strategy that's doable to be executed now if one has to sell their rental sub 3 mortgage is...by 1031 to DST , I noticed there're still a bunch of DST from 40-60% LTV offering 4 percent 10 year IO for cash-flow.  

Assuming they sell in 2027-2030 timeframe,by that time those DST is sold, interest rate would be lower to do another 1031.

Quote from @James Hamling:

Quote from @Carlos Ptriawan:

I guess the most real-time important real estate metrics that we have right now is that the housing inventory in Nov 2022 is adjusted to Q2 2000 active inventory level. However nationwide price is barely moving from an all-time high and CA  state (as the leading 'crasher') is only regressed to Q1 2022/Q4 2021 price level.

That was very surprising actually. There's no 1-to-1 correlation between price adjustment and inventory level. 

 I did expect we would be around a 2-5% consolidation in national median pricing by now. I am a bit surprised how resilient the vast majority of country is holding, despite volume drop. The entrenchment seems to be a bit more then I had projected. 

How crazy would it be if we get into Feb, with a 50% drop in volume YOY, but remain flat on national median price, or near flat. That would be very interesting. I projected up to 15% consolidation on national median by end of Q1 '23'. 

Too much equity in the homes and people will not let go of the sub 3% interest rate if they can rent out the house for more than the monthly mortgage payment. Seller can just pull their property off the market if they can’t sell it at the price of a few months ago. The big different this time and 2008 is that current owner have many option other then allowing the lender to foreclose on their property. I purchased 2 investment properties 1 in May and 1 in June and I still think they were good deals comparing to today since I was able to locked them at lower interest rates. Even if I purchase a similar property today for 10% lower in price I know my monthly mortgage payment might still be higher. 

Quote from @Greg R.:

Quote from @Greg Scott:

The market may correct, but I firmly believe there won't be a crash.  The reason is simple, equity.

Recently, prices have been surging.  Given the laws passed after the Great Recession, appraisals and lending is highly restricted.  

There is no  house of cards here to come tumbling down.

Ok, so I don't deny the amount of regs re: lending, but let's be honest. Good lenders are able to manipulate DTI and bend the numbers to get people into loans that they can barley afford. Let's not pretend that all the people who purchased in this over-inflated market are super stable and can't foreclose. I personally know people who are living check to check and who bit off more than they could chew thinking that they had to buy during the recent housing craze. 

So I respectfully disagree... there is a house of cards that will come tumbling down.

There will be a crash but no one can tell when. Just like all the people that calling for a crash back 5+ years ago and yet here we are with a few minor corrections here and there. You can say that people cannot afford to buy a property but have you ever look at it at a different angle where they might not be able to afford not to buy? Rental rate are still sky high and sometime the only different between buying and renting is the down payment. In some cases rental rates are the same is monthly mortgage. For people that are still in the sideline hoping for a crash (I do want a crash (20% drop) too but not sure if there will be one in that magnitude. So far my area see a 5-7% correction but with interest rate went up by 100% you are still paying more today than if you had purchased it a few months back. For investor just make sure you have a good cash flow and don’t worry too about getting in at the bottom because the bottom might be more costly than you think. 

Quote from @Bob Reinhard:

Like all loans secured by real estate, to secure the loan, a note and mortgage is needed, and whatever recording documents. The are often prepared by a seller's attorney.
For the transfer if the property, whatever is reasonable and customary in your location.
Email or call with any questions.
Bon

Thank you Bob. I was able to find the form I am looking for in the ZipForm platform within my MLS.

Thanks,
Khoa

Hi,

I spoke with the seller of the property that I wanted to purchase. The seller is willing to offer seller finance. Does anyone know what form(s) that I need for such a deal? Since there will be no lender, what should I pay close attention to since I wont have a lender and their underwriter to review all the documents and terms?

Thanks,
Khoa

Hi @Chris Oster/@Scott Wolf,

Anyone know where I can find the form for a Seller Finance deal? 

Thanks,
Khoa

@Steve Vaughan

Thank you for the information. I guess doing the deal where he can assume the loan might be out of the question then.

Thanks,
Khoa H

Hi BP Members,

I purchased a property around 6 months ago. Today I wanted to sell the property back to a relative. I wanted to sell it at the price that I purchase it at and have him assume the loan to keep the low interest rate I currently have on it. Which professional specialist should I reach out first to start this process? Will it be my lender, escrow, or someone else entirely?

Thanks,

KH

@Wendy Busa

The short answer is no. The reason is when you have issue all they will do is charge you a fee to send someone over to inspect. Then they will find all the reason in the world to deny your claim. During this whole time your appliance is still broken but you can't repair it yourself because you depend on them to do it. I had a cooktop exploded and had to worked with them for over 1 month. After they denied my claim twice and charged me $75 for each time I ended up cancelled the plan. Only got 50% of the premium back after only 2 months into the contract. Lost a month not being able to cook and had to togo the whole month. I no longer recommend any of my clients to buy home warranty. Better to save that month and repair your appliances when it break down.

Joe, If you look at my answer again I never said cash out refi is better than using the 1031 exchange if that what he plan to you. However, his original question did not bring up that he was looking to do the 1031. Thats why when he ask sell or keep the rental I said if he sell he will get hit with the capital gain. If he keep and need the money to invest somewhere else he can do a cash out refi. Since the interest rate is still low I think it better than selling the property straight up. Again, I did not know his intention was to buy another property after selling this one when he first post the question.

Originally posted by @Joe Villeneuve:

Originally posted by @Khoa Ha:

@Joe Villeneuve

Yes COR is using your equity as collateral but it is not much different than selling and taking the money out. For COR one does not need o pay any capital gain tax whereas selling will be hit with capital gain tax unless it is replace by another property with a 1031 exchange. With the record low interest rate we still experiencing, in my opinion I think it better to COR. However, the OP said he don't want to take care of it anymore because of high maintenance then selling for him is probably a better choice.

Khoa

Selling it doesn't charge you interest on its use. Refi does. Where there is no difference is between buying with a loan and a DP upfront, or doing a refi at the end. In either case, you have equity and a loan. If you do a cash out because you are refinancing more than the cash you put in, then your cash flow goes down. Either way, you're paying for the money you are getting out after you refi. If it was your money you were getting out, you wouldn't have to pay for it.

No CAP GAins when you do a 1031. Based on the amount of equity built up, I assume the property has been owned for at least 5 years. If the remaining debt is only $100k, I'm assuming the original price, plus rehab costs, etc... add up to over $250k, which means right now the CGT would most likely be in the 15% bracket...even with depreciation. Wait much longer and the 20% bracket looms its ugly head.

Interest rate doesn't matter whether it's high or low as an alternative to sell since there is NO interest when you sell. Can't get much lower than that.