All Forum Posts by: Ray Hage

If you can get the conventional loan, go for it! It will save you a couple thousand dollars in financing costs. No reason to do this hard money loan if you have a lot of time. Save yourself from the HM rate and points plus the cost of refinancing later.

@Ash Hegde What do you think about this? 

Great idea. I also house hack my primary. Do you have a relative that would be willing to co-sign? Maybe you can give them as small % of the equity for them doing you the favor? It is tough for the FHA if you have a very limited history. You may have to go with another type of loan

Congrats! I consider this to be a huge win. You're basically getting paid to live there! I also house hack my primary and the income is more than the PITI! I find this to be an under-utilized strategy.

@Jaden Jung I generally stay away from these things. The reward is certainly not worth the risk. 

I am also a PML and that would be a far better use of your money (still some risk to it, of course). Ideally, you could also be an investor and buy something in a cheaper market and have it managed by a PM. I would generally go with one of these two strategies to put your money to work.

Quote from @Karl Hudson:

Quote from @Ray Hage:

A 9% rate is within reason imo assuming they are not charging crazy points or other fees. HELOCs have similar rates at the moment. Does it absolutely need a new parking lot or can you patch up what is there? Maybe you could pay the roof and other minor improvements out of pocket and wait for the parking lot till later. Sometimes you can also finance a roof through the company doing it. Ask about financing and see what their rates are AFTER they give you price quotes.

The parking lot is currently causing significant flooding, along with numerous cracks, potholes, and tripping hazards. To address these issues, the lot needs to be properly sloped to divert water away from the building. During heavy rains, which are common in Florida, tenants almost need to wear waders to get from their cars to their apartments.

The roofer does offer financing, but the rates are comparable to what we can obtain elsewhere. However, if we pay in cash, they will offer a 7% discount. I plan to use funds from the business loan to take advantage of this discount. Regardless, the project will be financed with the intention of paying it off once I secure my next deal.

Oh man, that is a lot! Yea it makes sense to redo it completely. I agree on the roof payment strategy as well. Take advantage of that and get cheap money elsewhere. Have to feel bad for tenants. I had a similar issue as a renter in ftl after a heavy rain.

Quote from @Navjeet Singh:

Quote from @Ray Hage:

@Navjeet Singh it sounds like you're making a big mistake and you used a very shady agent (unfortunately it is common in this industry. I am an agent as well and seen too many terrible things haha). 

Are you really sure you have no way out of this contract? If you are getting it financed, you could ask that the bank decide to pull out of financing it. Otherwise, it may be worth losing the security deposit if the house is in really bad condition. 

It’s  not in a visually bad condition - foundations etc are good based on the report - just hasn’t been maintained too well - it’s a large custom home built in 2003 and single story and the agent kept persuading us it’s worth that much. So we bought into the idea that it’s a great investment. 
we went non contingent over asking but just not happy with the way the deal went .. reluctance of our agent to spend time on the property  and when we went for inspection with sellers inspector the seller agent was present and that didn’t give us room to ask questions and really inspect and feel the property to our liking… I am not sure if it’s just a feeling that goes away or will this be a terrible mistake .. 

earnest money is also a very large sum

Yea it sounds like they lied and pressured you a lot. That's why you feel uneasy about it. If it makes you feel any better, I have had some uneasy feelings about properties I bought but I am very thankful now that I moved ahead. However, I wasn't pressured or lied to about these properties. If you are purchasing in cash, you need to basically do the calculations if it is worth it walk out now and lose the deposit or take the house as is and fix up what is needed. Will it be fairly easy to sell later? (High demand for similar homes in this area?)

A 9% rate is within reason imo assuming they are not charging crazy points or other fees. HELOCs have similar rates at the moment. Does it absolutely need a new parking lot or can you patch up what is there? Maybe you could pay the roof and other minor improvements out of pocket and wait for the parking lot till later. Sometimes you can also finance a roof through the company doing it. Ask about financing and see what their rates are AFTER they give you price quotes.

@Navjeet Singh it sounds like you're making a big mistake and you used a very shady agent (unfortunately it is common in this industry. I am an agent as well and seen too many terrible things haha). 

Are you really sure you have no way out of this contract? If you are getting it financed, you could ask that the bank decide to pull out of financing it. Otherwise, it may be worth losing the security deposit if the house is in really bad condition. 

I wouldn't pay them anything and risk going to court. This sounds like a legal scam to scare you out of your money. Stand tough.