All Forum Posts by: Mark Parzych

I still don't get your intention. Are you making repairs so you can sell right away? Obviously it depends on the numbers but generally refinancing will have between a 2-4 year payback. If you sell within that payback it makes more sense to take a HELOC for repairs. Is it possible to get a new appraisal to be below 78% LTV to take off the PMI or is the only way to refinance? I'd look into that.

The other thing to consider is you are now restarting your amortization schedule at a 30 year term. Again it all goes back to how long you plan to hold the property.

I also think it's easier to see trends of appreciation and development in the city verses the suburbs. At least in my market I know certain areas that are becoming drastically more expensive due to the area developing. Land availability is what causes appreciation in the city more-so than suburbs. If land is limited builders have to build tighter (townhomes/condors) and more upscale to get the greatest returns which drives the overall market to be more expensive. Whereas suburbs have so much land builders can build standard builder grade houses and make money because land is cheap comparatively. This doesn't even factor that my generation wants to live in the city so demand will increase as we decide to buy. 

If you take the traditional financing out for these two properties:

FHA for multifamily

HML refinance into conventional

It makes most sense to buy the multifamily first for several reasons:

1. It's less risky going this route 

2. You most likely won't have to put as much money down (HML can but is rarely 100% no money down)

3. You can potentially live rent free with multifamily

4. Debt to income ratio may not allow you to buy both properties in the same time period so you better pick one 

Consider an FHA 203k loan for a multifamily that needs to be fixed up. You can roll repair cost into a the loan at the low rate instead of having to use a HML. This will also give you practice repairing a property so you can feel more confident fixing a house with a HML next time around.

Your monthly insurance is $350 per unit. At least according to the spreadsheet.

I'm not a realtor, but if I was to enter a general partnership LLC with a realtor and we market to wholesale, does it need to be disclosed that one of us is a realtor? If the company was a 60/40 where I'm the 60% does it still need to be disclosed? What if I was the general partner and he was a limited partner?

I assume there may be push back from sellers if we also disclose that it could be listed with us instead. Does anyone else run into that problem?

Thanks

I also want to add that if you don't have any money in a Roth IRA account you should open it with a bank or trading company of your choice. Self Directed IRA accounts have a lot of fee's and a typically only used right before money is needed for investment and transferred back into a traditional Roth IRA after the investment and gains are returned. Transferring money back and forth in different traditional and self directed Roth IRA accounts is very common.

Quest IRA is based in Houston and can do that. They advertise a lot locally. I have never used them or know anyone who has. I'm just stating an option for you to look into.

Building would definitely get you the most money now. The area supports new townhomes as mentioned before. Even if oil causes Houston real estate to slow down I still think it'll give you the most ROI in the short term. If you are able to it may make sense to finish the remodel, cash out refinance, rent, hold, and build in the next market up cycle. The area is in the beginning stages of revitalization and should see demand/prices increase as the neighborhood changes. The park it's next too is also undergoing a major renovation and could become a central point for the community.

From what I've read Texas Property Code, Chapter 5, Subchapter D, Section 5.061 creates a lot of barriers to doing lease options and the guidelines must be followed if the lease part is less than 180 days. There is also substantial risk if the guidelines are not followed. How does one get around the code?

I've send a link to it below

http://drewshirley.com/texas-property-code-chapter...

Lease-Options are also effectively illegal in Texas also.