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All Forum Posts by: Raleigh Anthony Salazar

Raleigh Anthony Salazar has started 2 posts and replied 6 times.

@Michael Haas definitely plenty of inventory to my untrained eye in the area but pretty unique for the condition of the place. Ill post progress pics later today in here @Thor Sveinbjoernsson did a TON of work this weekend and getting ready to move into the house to pull carpets and refinish the floors 

Hey BP peoples!

I finally did it and bought my first property yesterday. I bought a short sale in an attempt to get a little bit of a deal since the market here in Seattle/Tacoma area is pretty nuts. Being my first property, I utilized a FHA loan with a Home Buyer Advantage DPA (down payment assistance) program. Received a decent interest rate at 3.875 but wasnt too concerned with it as I intend to refi or sell after renovation.

Property Info: Tacoma, Wa, 98408

Bank Approved List Price: 279k (1st short attempt fell through at 210k so negotiator was already attached to the property)

Purchase Price: 272k, overall loan value at ~267k with the DPA loan at ~10.5k (covers a little bit of closing costs)

Appraisal: 275k (all comps were 9 months old, is this normal? or can i read into it that there is 9 months worth of flucuation in the market for this appraisal?)

3bd, 1.5bath, 1124sqft, on ~.2 acres with 1 car attached, 2 car detached garages (nice selling point given my hobbies)

Reno Plan:

Home is mostly cosmetic issues. remove popcorn ceilings. remove carpet and refinish hardwoods underneath, bathroom and kitchen updating, landscaping, gutters, trim and paint, and some work on the detached garage (new roof).

Doing 90% of the renovation myself as I have done work on homes with my dad in the past. targeting a budget for 15k for materials and any surprises that I need help with. Already scored a whole set of kitchen cabinets, brand new quartz counter top (measured and will fit my need), some small appliances, doors, and bathroom vanity from a coworker doing an insane home remodel for 500 bucks too.

ARV: 385k (first time doing comps but have followed my market in tacoma for 2 years before finally getting in and have some solid confidence given the improving area and a solid comp that just sold this week 4 doors down the road)

ARV available rent: 2k/month for home, and ~200/month for garage/parking rent out (to my dad who gave me the auto addiction and needs more garage space)

Given rents listed above, without doing a refi, the property nets -50/month (used BP rental analysis calc). definitely not ideal

However this is where i have questions: refi will give me the ability to assess the ARV on a conventional loan and possible do a cash out refi right? Allowing me to remove PMI but it will overall raise my monthly payments due to the loan being higher. Initial analysis shows that this would net me ~100/monthly cash flow but would still need to bank on getting cash out on the refi to get the next property rolling for my overall goal to move into Buy and Hold strategies both here and out of state. But is the wiser move to treat this like a live in flip and cash out to get the ball rolling at a faster rate with the next property? looking for some advice.

Newbie advice: If you are worried about getting in, let this be your sign to figure out what it takes to do this. I am nothing special. About 6 months ago I had a credit score of mid 500s and worked everyday to create a budget, follow it, pay off debt and improve that score to buy a house. My motivation was my gf and i were expecting a kid September, so I set a goal of moving into a place by July 1st. I am lucky enough to have a good W-2 job that i love but i need to get to FI so that i can enjoy time with my growing family. Find your motivation and push forward. Listen to podcasts, read books, follow REI people on social media, whatever it takes to put that in your face to get motivated.

In ending, looking for advice on future plans with the property. I'll be posting up my progression pics somehow (have to figure out how on here). Also, reach out if you have questions on my process or the short sale process, I am by no means all knowing on it but I can share my experience in hopes that it'll help you out. 

Thanks!

Raleigh

I am new to BP as well and have little insight as to actually owning property in that area but i can tell you as a life-time resident of Tacoma, that i generally avoid looking at deals in that area as there is a high amount of crime and other undesirable activity in the area. 

Post: Memphis Invest

Raleigh Anthony SalazarPosted
  • Tacoma, WA
  • Posts 6
  • Votes 7

i'd be curious if @Kevin Byrne has had a good 2 years. He had some solid input! Just now coming into research on TK properties as a "viable" source for investing. 

Post: Working with Lenders

Raleigh Anthony SalazarPosted
  • Tacoma, WA
  • Posts 6
  • Votes 7

Perfect grounding response. I really appreciate it. I think I am just getting ahead of myself and just need to let the process work itself and stay the course. Probably just getting polarized by the deal I found and trying to force it without recognizing what you stated above. Thanks @Eric Veronica

Post: Working with Lenders

Raleigh Anthony SalazarPosted
  • Tacoma, WA
  • Posts 6
  • Votes 7

Hello BP people!

I have been completing research to get into real estate investing. I was originally looking to buy my first home within this year and then discovered BP, some podcasts, and the house hacking method for a good first step into investing. 

I have been working on my credit to get it up to standards for the past 6 months (working with a credit repair agency through a lender) and I am right on the cusp of 600. I plan on using an FHA loan with a Home buyers DPA program. Along with this, i started putting money away last month for closing costs and repair money for the house, extra money from check and taking odd jobs at my friends bar to put even more away. All the while looking and studying the market.

Today I found a perfect 3 unit property and using the BP calculator it, cash flowing at ~450 a month as is or with some renovations ~700 a month. Great for my area (Pierce County Washington). I have seen a couple of properties pass me up for less cash flow that if i could have jumped on to get my hands on experience I would have.

So to the question: my current lender has identified that they are looking to qualify me for an FHA loan which requires a >580 credit score and 3.5% down. By my research, I have above 580 and plan to use the Home Buyers DPA for the 3.5% so i meet those requirements but they haven't moved me from the credit repair side onto the pre-approval side. In this event, should i look for another lender? I really would like to move on this opportunity and take my investing into the practical side.

Thanks,

Raleigh