All Forum Posts by: Ralph R.

Thank you Roy

you got the right name. I'm not complaining that anybody did something wrong just saying that the more opinions you have about values the more realistic the results would be. Part of living in Rural Alaska is adapting to different standards, and ways of doing things. I know when I have a deal working outside they use random appraisers and the mortgage officer told me it was required by law. Ill give those people a call and see what they say.

RR

Mark

Thanks for your reply.

Its pretty hard to compare the way the market works here to the way it works every where else. There maybe only 4 or five houses for sale at a time. there is maybe 1 realtor, and he is a handyman as well. if you want to buy a house you have very little to choose from, and if you can afford it you pay the appraised price. if not you pay rent. If the person leaving is in a big hurry to leave he might come down a little. Some people come here for a set period of time say 3 years. They list their house the last year or so at whatever the last appraisal was, if they sell it before their time is up they rent the remaining time of their stay. Somebody coming in buys the house for the appraised price. Others have tried to get the comps from him, but he won't turn loose of them. He is not local, he fly's in from 500 miles away. Locals can't do it because he has the information.

I'm not having problems with his appraisal of my property, he's done 2 for me both exactly the same number, I just feel he has more influence on property value, than one person should have as he appraises every property, every time it sell, or is refinanced. what if somebody upset him, or he had a bad hair day?

RR

I live in rural Alaska, in a town of 5000+ people. Living in the bush tends to make one accept things not common in the rest of the country. This sticks in my throat though and I am not sure it is even legal. I was under the impression that lenders were now required to choose appraisers at random, from a pool of appraisers, and that they could not use the same appraiser for all their work. ALL banks and lenders processing a loan here use the same appraiser. He travels here from Anchorage and every time a loan is processed he does the appraisal. To make it even worse his father was the appraiser before him. They have been the only 2 appraisers here for many years. When I asked him about this he said he was the only person who had the comps to do the appraisals, and he was not giving them to any one else. There is no county, city or state record of sales as we are surrounded by lands owned by native Alaskans, and the federal government. (on the bright side there are no property taxes either) he and his father have set the values for property in not only this town but the entire region. Is it legal for conventional lenders to use the same appraiser all the time?

C,

Welcome to BP!

I invest in Colorado, and don't know the laws in your state. In Colorado I always get a tittle search, and the mortgage company always wants tittle insurance on the loan. usually the seller pays the tittle search, the buyer pays the tittle insurance for the loan. I would never buy without the search as you don't know things like who has water rights, mineral rights, what rights of way cross the property, OR even if your access is a legal one if you cross another property to get to yours. Example...My grandfather acquired a piece of property in 1954. It is 9 beautiful acres. It has an above ground irrigation ditch that is easy to see. It also has an underground tunnel carrying water you would never know is there. There is no legal way to get on this property. It has gone through 2 estates. I acquired it from my fathers estate. (I knew all of this before hand). A tittle search would have revealed all of this. Had the estate sold this property tittle would be free and clear to sell but it is encumbered. The property has passed through 3 generations, and I am in process of "fixing it" but the cost is horrible. (The Colorado state constitution does not allow a property to be land locked, but you have to sue to get an access)

I always have a tittle company do a tittle search, they shouldn't charge as much as the lawyer, and since they ultimately provide the tittle insurance (at least they do in Colorado) they have a vested interest. I always thought they would be pretty thorough because of this.

RR

@Stephanie Dupuis

I like your 3 steps for learning. When all else fails you can always fall back to the previous step. Very nice!

RR

@Elisha Keller

Mistakes are too numerous to remember. First one I made was not doing due diligence before buying. Not the first house I bought as an investment, but the second. I got lucky on the first one. The second house I thought would handle a 15 yr. note. (I am older and wanted it paid off quicker) I miss figured. It does it, but not cash flowing like I thought. I am buy and hold and this will be okay giving me a better retirement.

Best thing I ever did, first Rental I ever bought. I was looking at houses and a realtor had a tenant moving from California to Colorado. I was looking at a couple houses, and she was also looking for one to rent. She picked one, I flew down, looked at the house, did the numbers, and bought the house. Realtor wins, I win, tenant wins. everybody happy. ( kinda like the others said make your house/location fit the tenant.) She rented the house for 2 years. worked great. (bought the house 175k....When I sold the house 2 years later it appraised for 225k. Only down side I sold it to my son. He got the appreciation. oh well.

Something's you can do.

Look at houses online. Practice doing the numbers. Take the asking price, go to the online calculators. figure out the payment, and the expenses. You can ball park the insurance, the taxes should be on the listing, remember you need some cash at closing. check with local realtors for this number. There are calculators and formulas available on BP. In the end the math will be one of your biggest factors. Learn what your top offer will be. Don't forget Utilities you may need to include as expenses. if you hire a Property manager 10-12% works in my area. Learn the 2% rule, and the 50% rule. These are great guidelines, Learn how they affect your offer and your numbers. Always remember they are guide lines only. There is lots of info about these rules here on BP. When you think you have found something that will work and cash flow, put it in a forum. Let the BP. guys critique it. Another thing. If you buy your first house as a multifamily and live in part of it, you may get in for a lower down pmt. If its a non owner occupied property, you will probably need more down payment as well as a cash reserve. Lastly be sure to claim all rent as income on your taxes. (as well as the deductions) you will need to establish yourself as a landlord for a couple years in order to use your rentals as income for future loans. It will greatly affect your loan to income ratio on future properties.

GOOD LUCK

RR

@J. Johnson

Careful about a short sale. I have tenants who are renting from me because their credit took a hit due to a short sale, and they can' get a loan to buy another house. When they are elgible they will pay a higher interest rate. I wouldn't take Financial advice from the realtor, talk to your loan officer, or C.P.A. about how it will affect your finances/credit. If the house is just a "burden" maybe you can ride the storm a bit until you find a better way out. I wouldn't use a short sale except as a last resort.

Welcome Erik, congrats on having 2 houses at such a young age. I guess great minds wander the same path. I am from Estes Park Colorado, (or what's left of it) and I too rent rooms out. I live in Bethel Alaska now and can get $700 a month out of a bedroom here. My investments are in southern CO, and don't get near that much rent per square foot. I have some connections in Collins, and in Greeley if you want them PM me. I looked at Greeley a couple times but always end up in Pueblo, as I want to retire there some day. Good luck!

RR

Congratulations Andy!

@Ted Eads

Ted you could be correct about the actual credit rating itself. However some lenders will require a written explanation of all HARD credit checks. (the ones you sign a release for) The credit checks done by random credit card company's, Credit check's you don't request (credit card offers, insurance company's etc.) are a soft hit and carry less weight. I have even had one bank ask me to explain a credit check they pulled at the beginning of the loan. Sometimes if the loan, or closing takes a while they will pull more than 1 credit score. This happened to me and they wanted to know about the credit check they themselves pulled for my prequalification. Getting a loan takes long enough, and I don't care to explain multiple credit check's. just sayin.

RR