All Forum Posts by: Simcha Davidman

@Stephanie Gledhill it all depends what your long term goals are. Are you planning on refinancing the same loan amount, i.e. not pull any cash out? I calculate a loan amount of approximately $487k - if you're right about the home value, that means you're sitting on 30-35% equity. You could do a lot with that equity :)

Just to clarify - is the $40k savings considering that you're already X number of years into the loan, or did you just run the current loan interest cost as the life of the entire loan?

If you have to escrow anything at closing, wouldn't that release whatever you had to escrow for the original loan - and that should be close to a wash.

It's going to take almost 4 years to break even. If you have any doubts about holding this for more than 5 years, refinancing now is far less attractive.

These are just some points to consider. Good luck!

@Huyen Tran Bezverkov welcome to BP!

Sounds like you're trying to get preapproved for a specific loan amount. You might not qualify for that amount, but you may very well qualify for a lower amount - and you can try to find a property in that price range. Talk to these banks/lenders and see what you do qualify for.

@Tony Villarreal I'm sorry for you had this frustrating experience! Unfortunately, you might have legal rights to be reimbursed (or have someone else make the repairs) but it's too small of a sum to pursue it through proper legal channels.

You can definitely try pushing the realtor. If you asked for work receipts and they didn't give you this one, that could be something to with.

Also, maybe there is a warranty on the work done by that contractor.

Lastly, I'm not sure if your inspection was supposed to specifically include the a/c units, but you should talk to your inspector and find out why he missed that. Maybe you have recourse there.

Good luck!

@Ignacio Linares prequalification is like a guide to how large of a loan you might be able to get. It's not a guarantee, and it's also not a hard and fast limit.

1) The ARV as determined by the bank - not your analysis - is what will determine the max the bank will lend to you. Let's assume 70% is what they're willing to lend, so on a $130k appraisal, they'd lend $91k. ALSO, whatever you qualify for is the max they'll lend to you. In this case, assuming you not only prequalify but actually qualify for $100k, they'll give you the lower of either of these maxes.

2) Correct. That's the fun part :)

@Aaron Leger sounds like you're doing this full time and have no other income source - is that correct?

One option might be develop a relationship with a local bank. They have commercial loan officers you can get in touch with, and you might be able to get them to give you a loan based on the property and business plan, especially if you have networth to cover the loan amount.

@Bethany Turon congrats! Sounds like an awesome deal!

@Account Closed you can put together your own list for "just" time and energy. Go to the county property records website (or the actual brick and mortar office) and start pulling properties' owners and calling, texting or mailing.

Purchased lists have the ability to sort by lots of different factors (such as how long it's been owned, if there's a loan, etc.). I'm not sure how accurate it is, but it's probably a good step in the right direction. Pulling all this info would be difficult, and I can't tell you how :)

@Matt Friesz there is no right answer here. It's all negotiable, and whatever the two of you come to; hopefully you both feel like winners.

I may be a minority here with this view, but I'd be hesitant to make any binding/long-term relationship. It means that you are more obligated to him and going off on your own will be more difficult in the future. Instead, you can have a general understanding of what you're both trying to do, and then as deals come along, you jv/partner for each one.

For example, let's say he wants to go 50/50. But what if in 6 months, you find someone who wants to "join" you, and all he needs is 8-12% annually. He doesn't care about upside. If you have a real partnership with Mr. Money Bags over there, this new Piggy Bank is of little benefit to you, and you're still locked into giving MMB half of every deal.

As a general negotiating item, the more of a preferred return you can offer him, the more equity you should be able to keep. Or if you give him no preferred return, he's going to likely demand more of the deal.

Lastly, the key to this business is building equity, not cashflow. Cashflow is really important for a bunch of reasons, but wealth is in the equity - keep as much of it as you can, even if it means giving a higher pref and making less money in the now.

@Bronson Simmons you're right, as a general rule, older buildings will require more maintenance. You should try to find out what type of maintenance or large repairs have been made over the last 100 years :) For example, have the water or sewage lines been replaced? What about the electric wiring? If a house is properly maintained and upgraded, it can stand for a long, long time. Just properly reserve/budget for big ticket items.

Good luck!

@Andy Bailey that's what I thought, but I didn't want to assume :)

I don't think it "helps" to only have one mortgage, but it will keep your own admin a bit easier.

But it depends on what your goals are. Sitting on that much equity could be an opportunity to scale, if that's what you're looking for. Instead of looking to buy a $250k house (or maybe less if it would be constrained by the 70% ltv) for all cash, you can use it as a downpayment on something closer to $1m...