All Forum Posts by: Leigh S.

@Lindsey Vargas  thank you.  That's what I ended up doing.  It worked.  However, once I ready to have the applicant take the next step, I had to ask them to go back into their application and activate the credit and background check.  It all worked out, it was just a little wonky.

I was planning to use Cozy to manage applications. I will require background and credit check once I review all applications and settle on the best tenant, but not for the initial application.  I can see how to turn it off on the listing, but when I test the application process as an applicant on Cozy, it tries to force me to pay for those anyway. I think that's sneaky and a little underhanded.  Is there another online application service that you use to initially vet applicants that doesn't try to prompt a background/credit check?

Here's a cautionary tale for you. I just went through this. Bought a duplex, inherited a tenant with an expired lease, paying $325/mo and that included water. I figured I'd let him stay until I got the other side renovated and offer it to him at slightly less than market rate. I kept him on a month to month and he paid rent once and then ghosted me. Thanks to the pandemic, he was able to ride out the eviction process stay there 2 extra months beyond the date that I filed for eviction. I bought the property in November and wasn't able to get him out until June.  He lived there rent free all that time.  I will never buy a property again with a tenant in place unless the tenant is already paying close to market and has a good history with the property.  I'd insist that the seller get them out before you close.

Originally posted by @Evan Polaski:

@Leigh S., I am sorry this happened. Unfortunately, refi appraisals are notorious for coming back low. If the window to contest is still open, I would focus on the GRM (gross rent multiplier) calculation. Look for other rentals, 2-4 family that have traded and what they were getting in rent. Since your rehabbed units are getting more in rent, at the same GRM, you should be able to reasonably get a higher valuation. And technically, updated units will normally trade at a higher GRM.

If your ability to close loan, or contest appraisal has closed, a couple recommendations for future refi's/projects:
- Have before and after pictures
- Typed out list of all items upgrades you did
- Cherry-picked, but realistic, comps to feed the appraiser.  Use some that are below, equal to and above your value.  Then note on the print outs why the lower valued properties are inferior to yours and above value are superior.  

Some appraisers won't take this package, or only parts of it.  But I provide it at ALL appraisals, refis and sales, 90% of the time the appraiser takes it and I get a value much closer to where I want.

This is a brilliant idea! Thank you for suggesting it. I went back to the appraiser, armed with these numbers - based on his comps - and got a really good number.  I've asked him to reconsider and hope he considers this approach!

Originally posted by @Benjamin Anca:

@Leigh S.

Don’t give up searching man. Contact local credit unions, speak to at least 3 other lenders and ask them about their opinion on the process...

Lenders want to make money as well.. Find the right one and move forward on the refinance.. Even if it takes a little while longer it’s ok, you have a renter in the property.. You making money!

Boom!!! Good job man...☝️👊🏾👌

Thank you so much for your positive and supportive comments! 

Originally posted by @La Vette Beasley:

@Leigh S. I am nervous after your post. I have 2 properties I want to refi and neither have viable comps. 😱😬

Good luck! I'm not too far up the road from you. I'm in Greenville-Spartanburg.  Crazy times right now. 

Thanks to all for your encouragement and ideas. I've gone back to the appraiser and asked him to re-evaluate. We shall see.  In the meantime, the broker keeps asking for more and more paperwork. They are digging back over 30 years into old home purchases that I have long since sold and asking for proof. It's crazy! When I expressed my frustration to the processor, he said that COVID-19 has made lenders really cautious. He shared several stories of borrowers getting their funding and then applying to receive forbearance days later. Right now, I can only qualify for $66k on this - not anywhere near what I was expecting. So, unless the appraisal comes back with better numbers, I may have to walk away from this broker, wait it out and try again in a few months. I've never had this much trouble with a mortgage. Definitely a head scratcher!

Sigh. I just renovated a duplex and have been working with a lender for a cash out refi. Because there were no comps, the appraiser used the Sales Comparison approach and valued it at $95K. I had conservatively estimated that it would appraise for $135k, knowing that the same floor plan on the next street over (converted from a duplex to a single family home) closed last week for $154k.  I tried to challenge the appraisal, using the neighboring home as a comp, but the lender wouldn't allow it since it's no longer a duplex. So, now I'm questioning whether I even move forward with the financing.  I'd love some insight on what others have done in this situation.

Bernard, you are getting great advice here.  I have a tenant who likes to pay in cash. I used to collect every month, but now that I know him better and trust him, I've given him a year's worth of deposit slips and he takes it straight to the bank. It helps that there is a branch within a mile of him. Works great for me and he's much more timely with his payments than he was when I had to coordinate a pick up.

If you can get him, Ken Pangel is great. If you can’t, call the permit office. They will give you names of licensed contractors who are in there a lot.