All Forum Posts by: Philip Sriployrung

@Katarina Cordero I’m running into this issue too. Following along to see what the pros say.

I bought my first rental property (50k) about a year ago and haven’t refinanced yet due to high closing costs (~3.5k) relative to the cost of the home and the cash I put in (10k down).

The cash out refinance sounds great (home value ~65k), but after purchasing and refinancing that’s about 7k in closings costs vs my 10k investment. I’d be getting very little cash back after factoring those closing costs. (Of course I’m not taking into account my cash flow which has been about $200/month)

To the smarter more experience investors, is there’s something I’m missing here? What am I not taking into account?

Hi everyone,

I'm closing on my first SFR - $50k, 20% down, Memphis

This is through Roofstock and I'm getting the loan through one of their preferred lenders.

I'm new to this and after looking at the breakdown of closing costs, I'm little confused.

Here are some of my questions. I'm a newbie, so please forgive my ignorance.

1. Appraisal - quoted at $750. I did some quick searches and it looks like the average should be around $300-350. Lender says appraisals for rental property is higher because of additional reports the appraiser has to include. 

2. Homeowners Insurance- I'm already getting quotes from insurance companies, so why would I pay for insurance through my lender without even seeing what the policy is? It's broken up my insurance premium (12 months) and insurance (3 months).

3. Property taxes - why am I paying this upfront in closing to the lender rather than directly to the government?

Thanks in advance for helping me out,

Philip

I'm reviewing my own closing costs now on a $50k property. I never thought much about closing costs, but seeing @Caleb Heimsoth's reply above points to another consideration with purchasing property on the lower end. $5k is a much larger percentage of a $50k property than a $200k.

Maybe it's because I'm still new to real estate or socio-economically more challenged than you guys. But ~$3,000/month from semi-passive income seems completely worth it to me. Or maybe I've set my expectations too low. Plenty of people make less than $3,000/mo working full-time jobs. Also, if you're working with a reputable PM, wouldn't they be handling eviction proceedings and other big items?

Thanks @Marco Santarelli, I just completed the contact form on your site and will be listening to that podcast!

@Marco Santarelli 

This thread is a few months old, but are these deals still available? Please let me know.

@Ryan Mullin  Even though its harder to find those higher cap rates in FS and BH, what do you think about appreciation in these neighborhoods compared to other Indianapolis areas? As a self-identified buy and hold investor (without actually having made any deals yet) would it be wise to trade-off cap rate for appreciation; or should the goal be for both?

Michael brings up a really good point. I'm looking to buy my first TK also, but doing as much research as possible. It does seem that most of the TK providers are investors in rental properties themselves. If they're seeking to expand their own inventory of SFR and already have great cash flow, why would they be selling these awesome deals and not keep them for themselves? I'm happy to pay above market value for the convenience of being hands off, but is there a catch?

@Dawn Anastasi posted somewhere in the forums that it's kind of like a gold rush. Companies sell the shovels to would be gold-miners for what seems cheap. The gold miners get burned out and sell the shovels back to the company for half what they paid for it. Is that what's happening here with TK's. The big companies are making profits when we buy and then cash in again when we fail?

My goal isn't to be a cynic here, just trying to do my due diligence in understanding how all this works.

Thank you everyone for the very warm welcome!