All Forum Posts by: Rob Massopust

1% is pretty standard. you can see about them folding those costs into the loan. Its brutal though, everything costs, if they do this then they increase the interest rate

What city or state are you in?

In CA - Look at Bank of Ameria - they have a great program for borrowers with low to average income for properties located in specific neighborhoods. ie Anaheim CA. for a condo or house up to $510k - they will give you a $10k Downpayment Grant, $7.5k in closing costs and no PMI - you can get in with about 1% and save a boatload. Now you still have to put in the EMD and pay for the appraiser and inspection etc so hard to get that 100%

CALHFA - Has a program that Downpayments up to 7% of the cost of the loan, same with EMD and fees etc.

There are dozens of down payment assistance programs that might help also but going to need something in to get into a property.

One thing to consider also is if you need absolute 100% financing [and I know everything is expensive] but buying and owning a property costs money

Can you team up with a partner, can you tap a 401k, can you live below your means for a couple of years to save money, can you buy in a 2nd choice market and make due for a couple of years etc. Lots of options to explore, can you house hack with someone?

Also note: when talking to lenders and agents that can help you do not open with you are looking for 100% financing [depending on your market and maybe if you are a VA loan, otherwise most agents are not going to be rushing to show you homes - unless you can prove otherwise that you are a good candidate to buy. Sorry - just the facts - unless you are not going as conventional but as investor with HML etc - thats even tougher - HML will charge alot of points and interest

Try Meetup.com

You might have to come to Los Angeles to find some bigger ones.

 Sorry duplicate post - not sure how to delete - opened up on old profile

One more thing - your financial advisor does not make commission with you buying real estate so of course he says that.

Just run the numbers - cash out and pay long term gains then invest in a fund that gets 5% or so - you take a huge haircut with paying tax on those gains in so much that you would have to make over outsized gains in the market just to break even and who is to say those funds are going to go up. Does not make financial sense to justify that route.

Best to do a 1031 [take some boot on some of it and pay those gains] and put into a 100% managed 1031 Fund. 

Example

You have a $1m dollar gain your tax consequence lets say is 25% so $250k

Take your remaining $750k and invest it in the stock market or similar ETF or similar "safe" fund and get 5% per year [adjust accordingly to projected figures]

so a 5% gain [simple math, not compounded etc and not counting for higher gains or market corrections and the stock market is much more suscepitble to upcoming market swings and manipulations etc] and you have a $37,500 yearkt gain on your $750k - it would take you almost 7 years to just break even. So run some better numbers and take advantage of the 1031 before they take that away or limit the benefits.

Just my 2c not to be taken as investment advice

And I have no affiliation to any of these companies - for illustration only

 Hmm I think others mentioned doing a 1031 - Most know about that

1. Exchange all remaining properties into larger property and have a professionally managed etc that is going to be the most exposure with as little hassle as possible. Go for a growth area etc.

2. 1031 or reverse etc. Look at 1031 Crowdfunding, DST [Delaware Statutory Trust]* or even Exhange into an ETF [that allows 1031 Funds] or a NNN that will also.

3. Sell with a Charitable Remainder Trust etc.

4. Cash out - make money pay taxes and that is that [or buy a cute beach condo - furnish rental and have a place to go when not renting out etc] If you are in Southern CA - get a Newport Beach or Dana Point - something kinda cool.

I am in Orange County CA and do a lot of furnished rentals for myself and clients.

Initially I was focusing on nurses [housing4nurses.com - not active] then realized a few things and switched primarily from just nurses [we would advertise on Furnishedfinders.com and CHBO.com etc., FFB too, to all sorts of guests. I could of really focused more on marketing and advertising to nurses and if you can contract with the employing agencies and offer them some consistency [location and perception and price biggest factor] and have them rent directy might yield some interesting results. Maybe do a tandem approach and depending on your location and price points etc.

Nurses mostly get a daily stipend to spend on housing [some have the employing agency pay for the housing] what I found is that even though on average nurses get up to about $180 per day in daily rental stipend - they do not seek out to spend that much and look for cheaper housing - the kicker is it seems that they get to keep the difference of what they do not spend on rent and pocket the difference.

So I put my lisitings on Airbnb sometimes as weekly, mostly on as 30 day rental [to keep in compliance with various city, HOA and local laws.

So lots of different strategies to go and to keep your options open for all sorts of travelers that we can not even think of, so expand your criteria. And one thing for nurses you have to really cater to their unique needs [they take assignment in usually 13 weeks stints and most find short term housing on Airbnb and or Extended stay then look for longer term [lower cost] housing.

You are not in the landlord business you are in the hospitality business.

Hope that helps! DM me for more details if need be.

Investment Info:

Condo buy & hold investment.

Purchase price: $400,000
Cash invested: $15,000

Fixer Condo, Tenant Cash for Keys, rehab and hold. They should rethink this for acquisition and disposition are seamless and always available inventory and easy to rent and sell.
When you add a furnished component, you outsize your gains and have very little maintenance and headache to worry about. Many investors balk at the HOA and such, I say go for modest cash flow and higher appreciation and sell or exchange every 2-3 years. Great BRRR for starting investors as owner occupied

What made you interested in investing in this type of deal?

Condos are easy to buy, easy to fix and are the easiest to rent.
For many investors condos are not their first investment choice. They should rethink this for aquisition and disposition are seemless and always available inventory and easy to rent and sell

How did you find this deal and how did you negotiate it?

Listed by District Attorney as a probate. Uncooperative Tenant held up estate and sales. I offered to solve everyone's problem and came up with a solution that worked out for all - and got a great deal.

How did you finance this deal?

Conventional
Had to fix some heavy drywall issues in escrow and with the tenants permission in order to get the appraiser to sign off on the deal.
Lender was ok.
I fixed it out of pocket before we closed and figured it was worth the risk

How did you add value to the deal?

Negotiating with Tenant - cash for keys and 60 days to relocate
Fixed bathroom during escrow
Helped with estate sale
Fixed up some plumbing and electrical.

What was the outcome?

Great complex - Gaurd gated community, easy access to amenities and freeways
Upside of about 25% plus - depending on hold time

Lessons learned? Challenges?

Got a little busy and tied up with holidays, got sick and slowed things down

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

District Attorney's Agent
Lender and Handyman