Skip to content
×
PRO
Pro Members Get Full Access!
Get off the sidelines and take action in real estate investing with BiggerPockets Pro. Our comprehensive suite of tools and resources minimize mistakes, support informed decisions, and propel you to success.
Advanced networking features
Market and Deal Finder tools
Property analysis calculators
Landlord Command Center
$0
TODAY
$69.00/month when billed monthly.
$32.50/month when billed annually.
7 day free trial. Cancel anytime
Already a Pro Member? Sign in here
Pick markets, find deals, analyze and manage properties. Try BiggerPockets PRO.
x
All Forum Categories
All Forum Categories
Followed Discussions
Followed Categories
Followed People
Followed Locations
Market News & Data
General Info
Real Estate Strategies
Landlording & Rental Properties
Real Estate Professionals
Financial, Tax, & Legal
Real Estate Classifieds
Reviews & Feedback

All Forum Posts by: Rick Soto

Rick Soto has started 3 posts and replied 5 times.

Hello guys, me and my wife are trying to buy a property in TN. We are currently in this situation and wanted to hear your opinions.

We are buying the house to live in it for no more than 5 years, then sell it or rent it out. I initially intended to put down $50,000 to get a sellers concession where they would cover closing costs and a 2-1 buy down (we have to put down 10% or more down for the seller to be allowed to give us that that amount concession, around 5.8% off the purchase price of $484,500, seller concessions are capped at 6% with a 10% or more DP). The interest rate would be locked in at 6.875% with first year at 4.875% and so forth. This seemed like a good deal to me, since the seller is paying for this and it would also give me time to hopefully refinance into a good rate before hitting the 6.875% mark again. This is essentially where we are at now, and just lack my signature to make it happen.

Shopping around, I also spoke with a second lender. This guy is offering me to put down $48,450 which is right at 10%dp + $3,550.00 out of pocket and give me the same rate at 6.875, but with a 3-2-1, starting off at 3.875% on the first year. This is option 1.

Option 2 with second lender is, get an FHA loan at 3.5% and use the concession to buy discount points and bring a 6.2% interest rate down to a 5.4% permanent buy down, putting me at around $3,450.00 monthly PITI and also adding 8k to the top of the loan for mortgage insurance.

Knowing you guys were to move out in 5 years, would you go with a 10% dp and a 2-1 buy down and cheaper monthly payments, or 3.5% dp with higher monthly payment, but with more money in the pocket to invest elsewhere? I feel like its either save now on the down payment, or save as you go on the cheaper monthly payments.

Thank you!

Post: Whole sale deals

Rick SotoPosted
  • Contractor
  • West KY/Mid TN
  • Posts 5
  • Votes 0

Anyone has wholesale deals in west Kentucky?, west side of the Kentucky lakes. 

Post: Should I manage the construction or hire a GC?

Rick SotoPosted
  • Contractor
  • West KY/Mid TN
  • Posts 5
  • Votes 0
Quote from @Evan Polaski:

@Rick Soto, as Chris notes below, a lender will require an experienced GC/builder.

As for the gap in profitability, yes it can be HUGE.  I have only bid out one new single family home in the past, and effectively to use a GC would have left me very little profit, within a margin of error that I could realistically see breaking even.  Now this is the one deal, with the one GC, and was a fairly difficult lot and was about 5 yrs ago.

Fast forward to today, and my plan is to partner with a builder on the equity side.  I put up the money, we jointly secure financing.  Builder has a full crew of employees, so will build house at cost.  Split profits.  I believe there is a very healthy margin in this relationship.  AND I get to be passive in the deal while making a similar return to if I tried to GC it myself, since I would be hiring subs are retail rates, where builder has them on salary.

That's a great strategy, thanks for the response. 

Post: Should I manage the construction or hire a GC?

Rick SotoPosted
  • Contractor
  • West KY/Mid TN
  • Posts 5
  • Votes 0

Looking for advice on the following,

After 2 years of my first investment, I am now getting ready to make my next move on the real estate world. I am really interested  in the idea of building a 3/2 sfh or a small 2/1 duplex, my 2 questions are these:

How does the financing part of new construction work? 

Is there a big gap profit wise, between hiring a GC and handling the construction myself? 


Thanks in advance!