All Forum Posts by: Lem Diaz

If the utility bills for the whole complex falls under your expense column you can look at options around splitting the line to save some money.  They talk about this in BP podcast #60. I would recommend listening to that entire podcast...it's a really good one.

Agree with Rob - you're well on your way! This "house hacking" method is what got me started too.  Good luck!

Okay...so I'm on the hunt for my first deal.  Luckily I have a good friend who is a loan agent + real estate agent + an all around smart dude to help me get educated.  I lean on him, but sometimes it feels like he's speaking another language. 

He's walking me through a rather complex deal and I wanted to share it with you folks...I guess more to just share my pain of feeling like such a rookie.

Deal details:

San Jose, CA property he's buying from a wholesaler who is buying from HUD. HUD says buyer can't have a co-signer at a split of 99% (buyer)/1%(wholesaler) for reasons I don't fully understand. Perhaps they don't want wholesalers involved in these purchases. The only way the transaction can go through is to split it 50 (buyer)/50 (wholesaler). This of course leaves my friend (the buyer) in a situation where he's putting up the whole amount for, on paper, 50% rights to the property. So my question to all of you is...how would you structure this deal to protect yourself if you were in my friend's shoes (the buyer)?

I'll share what he did (as best I can) after I get some responses...but I'm curious how others would solve this problem.  Elements that came up were: liens, hard money lending, short term title insurance, recording timing, and escrow.

Thanks in advance for your insights and input.  Sometimes these things feel like putting together a puzzle in my mind.

I'd be curious if there was something similar for Santa Clara, CA

 I was specifically referring to looking up absentee owners on appraisers websites.  Can you show me how you do this?

Can you walk through how to do this? Separately, I've always wondered how these "driving for dollars" folks find contact information for owners of houses...especially if it's vacant.

Any luck here David?

Wow.  Nice. 28k will get you a parking spot in my town. Shoot...maybe there's some cash flow in that...

Thanks for your input and words of wisdom Darren.  As I understand the recapture comes in at the 3 months mark.

For the last 1.5 years I've been refinancing my primary residence every 4 months. Curious to get BP member's thoughts on this.  Disclaimer...I'm new at RE investing...go easy on me.

The Setup (one cycle's worth):

• I refinance with a slightly increased rate (circa .25-.5%% or so) on a 30yr fixed and get 2.5% of the loan amount back in the form of principle curtailment (after closing costs are handled).
• Refinance again 4 months later and do the same thing.
• Example straight from my last refi which was last month (rounded numbers for simplicity):
  • Loan: $596k
  • Going rate at the time: 4.1% (30yr fixed)
  • My rate: $4.5%
  • $14.9k money back
  • -$4,325 for closing costs
  • $10,575 is what I had left over which went straight to pay down my principle.
  • There's obviously more math to this, but these are the highlights/basics.

As I understand things, the lenders (in this case the loans are sold to Fannie and Freddie - so for all intent and purposes they are the ultimate lenders) are paying the loan broker a fee for originating a loan. To protect themselves they require that the loan not be paid off in less than 120 days. But after that it's ok. Of course they don't like it, but that's tough - we're following the rules. Normally the loan broker simply pockets the fee, but in this case my agent is sharing it with me, the borrower, discounting his services in return for greater volume (i.e. doing this every 4th month - really every 3rd, but it takes a month to close). There are rules controlling cash out, so instead the rebate is given through principal curtailment and my loan principle drops, in my case $10,575

There are obviously more nuts and bolts baked in to this...but this is a simplified version of how I understand this to work. 

Some would argue that you're at risk here is if rates go up.  I counter that with...sure rates will go up (and they are), but the difference in paying 0.5%, 1%, 2%, even a jump of 5%+ percent more on the rate makes my monthly mortgage go up $10, $50, $200, etc but that amount over 4 months in comparison to getting my principle reduced by 10k at a clip means I still come out on top.

I'll stop there as I'm sure this will elicit some interesting dialogue and strong opinion.

Wondering if you've done the analysis on what you'd make if you converted to condos/townhomes? I'd be curious what those numbers look like if you've done the calculations.