All Forum Posts by: Kelvin J.

Hi.

I was wondering if anyone knew if the small 400 sq ft Katrina cottages would appraise in the same way a regular single family home might in terms of resale? Bearing in mind they are solidly built to code and could be set on pilings on a lot, not on a trailer.

Also would they appreciate in value in the same way a regular SFH might?

I'm assuming mobile homes and park models depreciate.

Any appraisers out there with thoughts?

Thanks for your response Garrison. 

That's pretty much my understanding too. The tiny houses are really too small for my goals but it's the size of the Katrina cottage as a potential home or rental that caught my attention. I'm thinking on pocket neighborhoods in progressive zoning areas when higher density might be allowed but not really seeing any way past current restrictions and covenants. Even buying a 1000+ sq ft house with a large lot gives no guarantee I can move a tiny/small house on it and rent, or even use it. At least not around where I live.

I'm still trying to figure out if the Katrina house, which is a well built and well designed structure,  will hold value. Just a thought.

Hi. 

I was wondering if anyone knew if the small 400 sq ft Katrina cottages would appraise in the same way a regular single family home might in terms of resale? Bearing in mind they are solidly built to code and  could be set on pilings on a lot, not on a trailer.

Also would they appreciate in value in the same way a regular SFH might?

(This is assuming I found a subdivision that allowed below 1000 sq foot structures...)

I imagine a tiny house, being on a trailer, and so unconventional would not appraise or appreciate like a SFH.

Any appraisers out there with thoughts?

I have a Home Inspector lined up to do a '4 point inspection' first thing tomorrow for $75. He seems willing to also give me a verbal opinion based on his trained eye of any glaring problems I might face. this is on the understanding he isn't crawling around the loft and under the house which would be a proper home inspection. It would not be written and carries no liability but in the absence of a contractor and with limited time is this a reasonable option? I hope to make a more informed offer directly after.

Hi all. I just viewed a gem of a place that is going very very cheap. It is a fannie mae property and qualifies for a renovation loan which is handy as it is in need of a complete rehab. Its all wood frame and needs everything doing but the lot is fantastic, has water views, a workspace, good roof, old growth trees and shade, great rental neighborhood...looks fine. Fannie mae has 2 offers and I want to be the third, but I want to put in an inspection or finance contingency to give me an out if there is any structural problems I didn't see. (I've rehabbed before but with brick homes mainly and I'm no expert). Fannie Mae apparently will go very soon with the offer that is highest and has no contingencies. This leaves me no time to get an inspection and so I'd be putting in an offer with no guarantee the house doesn't have termites or mold that I didn't pick up on.

1. Any advice on how to make an offer with a way out if needed?

2. Also If the place has termites or mold or some other big issue am I looking at a disaster or just inflated rehab cost?

Thanks for getting back to me Ben.

Research has convinced me on the wisdom of stable passive income. Selling the condo would release capital, but remove a good cash-flow producing asset with low maintenance in a trouble free area. There is even scope of renting it as a vacation rental (It's 6 minutes walk to a white sand beach) which I am looking into.

If I can create a greater income using the released capital from a sale to buy two rental properties or a multi-family I think I'll do it. Until then I'll try and figure something out. Thanks for your help all.

Kelvin

Jean - I have thought of the tri-plex, and it's a pretty good idea, not least of which because i could probably live rent free, it is a lot of bang for the buck, and Brandon on BP swears by them! I'm reticent going forward though as living next to the tenants, and the amount of day to day management involved with multi versus single family is apparently a lot higher, but i would jump at a good deal just to get in the game and ride it out for the experience. I'll keep it in mind.

Micki - Non FHA with only 5% down is fantastic. Is that HomePath or something? FHA I think is quite involved and a lot of hoops to jump through so conventional might be better. I'd be very interested to look at that product and chat with your lender. I'm In Florida, is that still viable?

I'm reluctant to sell the condo. It would release some good seed money but kill a perfectly good asset that would generate cashflow (my goal is staple passive cashflow). I'd rather leverage it somehow. If anyone has any thoughts on this I would be grateful. I remember Ben Leybovich saying there is a way to put a lien or promisary note against your equity without liquidising it to raise some capital. I'll ask.

Wayne - Also I'm assuming that because I maxed out my DTI when i bought the condo (and my income is the same) an equity release loan isn't viable as it would overload the debt side?

I heard Ben Leybovich mention in a podcast he used to sell assets to provide capital but found a way to leverage equity with a promisary not or lein. Any thoughts?

Thanks, Kelvin

Wayne - Thanks for the quick reply. I've lived there 2 years and if the sale proceeds are sheltered from capital gains that's a good possibility. If the DTI isn't affected there's not much point. As for the FHA I'm anticipating generating enough capital (either through a flip or equity release loan) to put me in the game as an investor with 20% down ability on the next project. I'm really trying to figure out a low outlay, low risk starter project to learn by experience as what i read and listen to on BP tells me the first project is the mistake project...Thanks for the help!

Elizabeth - Are you saying you used 5 FHA loans in a row? I read somewhere that was a good way to do it personally if you can tolerate the moves every year or two, as the capital gains gets deferred each time you upgrade. Is this about right? Thanks, Kelvin

I'm trying to bootstrap my business with virtually no money (in the absence of a 'no money down' or 'subject to' opportunity). And have come up with a loose plan.

My income is not great but the condo i bought 2 years ago, and live in, now has equity ($40k). It is in a great rental location and I'm thinking of moving out of it and setting it up as my first long term rental. this is to :

a) generate cashflow ($200 net of operating costs and the rent I will now have to pay) and for improved Debt to income ratio (DTI) when qualifying for Homepath or FHA loans

b) Allow me to qualify to purchase a HUD home as my primary residence, to take advantage of owner/occupier status like low deposit of 3.5% and renovation loans.

c) qualify the condo as a rental property for depreciation and also, down the line, i can 1031 exchange it for a bigger rental property.

If I can work in a 203k loan or Homepath renovation loan at the ourtset it would be ideal, if not Lowes card for the kitchen and bathroom at least, and the rest pay for as i go.

I believe i have to stay in the property for a year but cant find where I read that. I would then repeat

I imagine there are problems with this plan and would be grateful if you BP folks could shine a light on them or tweak it into a better plan!

Thx Kelvin