All Forum Posts by: Moises Silva

That is what people tell you. So the law says if it is NOT homestead, not ag, not minerals, the redemption period is only six months. However, how do you prove it is not a homestead? A good attorney will tell you it is my homestead if I say it is, nearly impossible to prove/disprove what was someone's thought process. Plus there is a two year potential challenge period. So in most cases title companies won't issue title insurance on a tax sale property for two years after the deed is filed. So for most people, most circumstances, most situations, realistically your cash and rehab is held up for 2+ years. You are at risk if you start rehab before that period, and/or try to resell the property before that.
Some if not most people think, well there was no homestead exemption filed, so there is no homestead. That's wrong. The exemption is for tax purposes/discounts, not the legal definition of homestead. You can have a homestead all day long without filing a tax exemption. That is actually pretty common, although the law regarding filing the tax exemption has changed in the past couple of years, before you could buy for example a house any day in 2024, but the new tax exemption could not be filed until Jan 1, 2025. That doesn't mean the house wasn't your homestead. Also just because you have a tax exemption doesn't mean it is legally your homestead. Think about two single people who both have homes in different counties with tax exemptions. Get married and move into one house. Forget to remove one of the exemptions. You can only have one homestead. So that could get challenged....homestead is more complicated than just filing or having a tax exemption. For fun you can see recently in Texas people going to jail for homestead disputes. https://www.houstonchronicle.com/politics/texas/article/lovi... although that is a little off topic for this discussion.

Thank you for this Bruce ! from what i was told was the same that this period is 6 months, but if i run the risk of this happening then that changes things. I have 20 % of my target purchase price , so I will try and reach out to local lenders and see if they can provide some insight

0 Votes

Houston, Texas

Quote from @Erik Estrada:

Quote from @Moises Silva:

Hello,

My name is Moises. Recently in this year I sold my first home and relocated to Houston in which I purchased another primary residence. I been researching and doing homework on potentially taking on a rehab project and flipping it once done, I have a few properties/areas in mind. I spoke to my lender and they advised me to wait a year or 2 before applying for another mortgage since I just purchased my primary residence.

I was thinking of looking into a Hard Money loan instead of traditional lending in order to start this project, in hopes of selling the property once fixed and paying off the loan. Any recommendations or advice will be truly appreciated.

Hi Moises,

Is there a reason why your lender is recommending this? If you are planning to buy another primary, you will need to wait a year to satisfy the occupancy requirement for your current loan to buy another primary and keep your current as an investment. The primary in most cases will need to be an upgrade from your current residence, depending on the loan program. If however you are buying an investment property, I am not aware of a 1 year requirement to buy an investment. With some investment programs you do not need to be a current homeowner to qualify for a loan.

Since your goal is to flip, I would look into short term financing since you will be able to easily finance 100% of the repairs. Be prepared to put at least 20-25% down since you would be considered a first time flipper.

My lender is recommending I fulfill the occupancy requirement. He was recommending to save for a year and rent out my current residence and then purchase a new one and continue this strategy until I have steady rental income. We went over some options for a conventional mortgage, however I was trying to to purchase a rehab and ideally sell it within the same year.

0 Votes

Houston, Texas

Quote from @Mike Klarman:

So, Houston is tough. Very competitive. None of the MLS listings work and the off-market properties are in control of the wholesalers who are very greedy there for some reason. They are selling you a bone with very little meat on it and ppl take it cause it's that hard to get into something there. I looked into the Texas markets: Dallas, Houston, SA. Same story in all three. Idiots with cash overpay and it prices out the smart investor.

You'd have to acquire properties at the auction/sherif sale level. That gives you the best price on your asset and you avoid any market competition. You then can apply for financing after you close in cash - so you have to be liquid. You gotta pick something up for like 100k cash that is worth 150k or more as-is and fixed up 300k+. Then after you close apply for delayed financing which cashes you out of the purchase and includes escrowed rehab funds for the fix.

Thank you @Mike Klarman This is very insightful. I have been looking into the auctions and was thinking the same thing. Really appreciate the breakdown this actually clears up a lot for me.

0 Votes

Houston, Texas

Hello,

4 Votes

Houston, Texas

Hello Everyone ,

Recently I put an offer in on a home in Houston TX , 4 units. After a bit of negotiation it was accepted and we are going through the process of closing soon. All the units have been recently renovated and are in an area which i see alot of potential in the upcoming years due to it being near downtown (appx 5-15 min away ). I will be living in the one of the units myself and want to maximize on the amount of equity and rental income. Any insight on the following questions would help.

1. any suggestions on best process and way to find tenant ? I would like to possibly do this myself to save on hiring someone.

2. What tools do you recommend to make sure I do not charge too low on the rent.

3. Since i have to include utilities in the rent , there aren't that many comparable units for rent in the area. Any recommendations on best way to calculate this ?

0 Votes

Houston, Texas

All Forum Posts by: Moises Silva

Moises Silva has started 2 posts and replied 5 times.

Post: Financing a rehab and flip

Post: Financing a rehab and flip

Post: Financing a rehab and flip

Post: Financing a rehab and flip

Post: Finding Tenants / Charging Right Amount For Rent