All Forum Posts by: Michael D.

@Dan Costantino , did you ever find somebody? I'm looking for a contractor myself for some drywall and carpeting work.

Thanks,

Michael

I'm purchasing a primary residence for $884k, with an 80% loan in silicon valley. Loan amount will be around $700,000.

Excellent credit, debt to income is 40%

What kind of no-cost, no-point rate should I be expecting to see today? I know rates have gone up, but the number I'm seeing seems higher than it ought to be.

Michael

Welcome Yos W.!

I'm a buy and holder myself with some property in Pittsburgh. I think you'll do well there.

Michael

Dee Xixi, how much cash do you have for reserves? How will you overcome cash-flow challenges in this scenario? You'll be hoping to break-even on a month-to-month basis, so if things go slightly wrong or you have a repair, how will you handle it?

On the face of it, based on the numbers you provided, this looks like a solid deal to me. You're projecting $30k/yr income on a $255k purchase price, which is about 12% cap rate. Pretty good, especially with financing, and double especially if the seller will also finance the down payment.

The only red flag that I see is that he seems worried about you defaulting on his money, and the property not being worth enough for him to get paid back. That's a valid concern with the 3yr amortization (he implied) on the second which kills your cash flow. As Thomas Quinn noted, just the payment on that note is $1272/mo, and the first is likely to be around the same (and you need to know). That's break-even cash flow. How would you make payments in bad months? Do you have any reserves? Can you get him to give you a 7 or 10 year amortization with a balloon in 3 years?

How about taking on an equity partner that's got $40k? How about wholesaling the deal?

Bottom line, you've got a good deal (on the surface), but need money to execute.

Oscar Campos, I live in Santa Clara, but have been doing a lot of investing in Pittsburgh, PA. It seems to be working out well, but I'm not rich yet :-)

Michael

The checks just start showing up in your mailbox. I don't know where they come from, but does it matter?

After I signed up for a pro account the checks stopped bouncing.

Welcome!

By the way, I'm pretty active in Pittsburgh, so feel free to reach out if you want to bounce ideas off somebody or otherwise share information.

Jon K.,

A person can be denied for this reason. If horders are a protected class, then you cannot deny somebody because they are a horder. That doesn't mean you can't deny somebody for causing damage to a previous rental, or evicting somebody who is causing an unsafe condition in your house.

For example, age is a protected class. I can't fire somebody just because they are old. But I CAN fire somebody for falling asleep on the job, regardless of what their age is.

Note: I'm not a lawyer. Check with yours.

Keep the focus on the undesirable behavior, not what the person is.

Michael

Jon Holdman, well, I guess I'm not too far out of line then. I guess I'll just suck it up. Thanks for making me feel better about the bad news.

Billy Rogers, that's what I was thinking. I asked the plumber I was speaking to to give me a very ballpark idea of how much it would cost to replace the whole line (from the sidewalk to the house, about 30ft or so), and he said $2-3k. Dang. He also said that he'd be using ABS. I put a call into the city building department to find out what kind of pipe they want as well.

This will be my third major expenditure on this sewer line in 6 years. First, about 6 years ago, I had the line replaced between the sidewalk and the city wye, about 25' - $5k. Then one year ago the city wye itself needed to be replaced. Another $5k. Now it's from the sidewalk up to the house. Both of those were clay, as required by the city (why? - I don't know).

I guess I'm fortunate that the city had a cost-share program for the first two, so they paid about half the cost.