All Forum Posts by: Sudhanshu Singha

@Bradley Russell Do you have an estimate of what Property A will appraise for and what is your current mortgage balance is? The reason I am asking is because when you do a 80% cash out refinance it is not 80% of the of the equity you have but 80% of the appraised value.  For example if you had a 250k mortgage balance on a home which will appraise for 320k then you would have 70k in equity but if you did a 80% cash out refinance it would not be 80% of 70k. The Calculation to get your cash out amount would be 320k(Appraised Value) x 80%(Cash Out Percentage)=256K(Cash Out Amount)-250K(mortgage balance)= 6k (Net Cash Out amount) rather than 56K which would be 80% of 70K(equity).

Depending on your appraisal value and mortgage balance you might not find it worthwhile to do a 80% cash out refinance. Hope this explanation helps!

@Reggie Powell I also use Zillow Rental Manager and it has worked really well for me. It usually doesn't take me more than 10-15 days to rent any of my properties using Zillow Rental Manager and if you prefer the website can also take care of applications, background checks, and monthly rent collection for you. When you post a rental ad on Zillow Rental Manager it also creates a listing on Truila and Hot Pads to enable broader exposure.

@Zachary Shelton I think you set very realistic goals and will probably exceed them as long as you go in with the right plan and mindset, but always keep in mind what @Joe Villeneuve  mentioned about focusing on cash flow instead of the number of properties. 

Since your real estate investing goal is to eventually achieve financial freedom the first thing you should do is calculate an estimated monthly cash flow amount that you believe you need to be financially free. That way you can more easily determine if you are on track to meet your goal since purchasing "X" amount of properties is not an accurate way of determining if you have achieved your desired monthly cash flow. 

I would also focus on making yearly goals of supplemental tasks which will help you reach your goal. For example reading a certain amount of real estate investing books, listening to a certain amount of BP podcasts, or attending a certain number of REIA or Real Estate Meetups.

Finally, I would also recommend you accumulate a decent amount of reserves for each property before you buy a new one. You don't want to get into a situation where you have too many properties but not enough reserves set aside to complete major repairs.  

@Jalen Britton Try https://www.docusign.com/ I have used it a few times when signing Real Estate documents and it has worked without flaws each time. Hope this helps!

@Adelaide Wolcott I agree with the point that @Jonathan Greene brings up about offering something in return for being offered mentorship. I also feel that the more you bring to the table the more your mentor will invest into the mentorship. 

For now you should focus on trying to find online Real Estate Meetups or online REIA meetings that have a lot of Northern Virginia participants. Due to the current Covid-19 situation its tough to tell when live meetings will start up again and if they due what the attendance will be like. I believe either of events will be your best shot at finding a local mentor in the Northern Virginia area.

Lastly, I would also suggest that due to the PAYCHECK CRUSHING rent in Northern Virginia that you try House Hacking as soon as possible to subsidize a majority if not all of your housing costs. With Amazon coming to Crystal City it's only a matter of time until other major tech companies start to follow Amazon's lead by establishing/expanding large local offices in the Northern Virginia area causing a spike in rents and home prices.

@Cel Arrington what is the breakdown of the 6.5K in closing costs? What I am thinking is that the lender is probably charging you a combination of high origination fees and points and enticing you with a low interest rate. Here is a sample breakdown of what fees might/should look like so you can maybe compare it to the breakdown to see what is causing the high fees. I am assuming you are pulling out 80% of the 90k property so a loan amount of 72K.

Potential Closings Costs: $2715-$6230

Origination Fee -(1%-2%) =$720-$1440

Points (.75-4 Points)= $540-$2880

Appraisal=$400-$500

Title Search=$175-$250

Title Insurance=$275-$350

Wire Fee= $25-$40

Recording Fee=$50-$70

Transfer Tax= $180-$200

Miscellaneous Fees=$350-$500

Ideally you would want to be on the lower range of the closings costs and I don't recommend you refinance with this lender unless absolutely necessary. I think they might be trying to take advantage of the Covid-19 situation since a lot of lenders are temporarily halting investment property cash out refinancing. 

I would say in your situation 3k or lower in closing costs would be reasonable for a 67-72k cash out refinance. Ideally you would not want to spend more than 1% on origination fees and also not pay more than 1 point for the best interest rate. Someone who is mortgage broker in Virginia or ideally the Roanoke area would probably be the best person for advice especially on what is a reasonable amount of origination fees and points during this Covid-19 period. 

I hope the breakdown of costs helps! 

@Rahul Ghate Welcome to BiggerPockets! I believe you are in a better situation than you realize due to the fact that you have the money to invest but are just lacking in time to properly search and manage your real estate investment. The challenges you face can be overcome relatively quickly by finding a real estate agent and property management company.  

You should first find a buyer's agent who specializes in investment properties and is familiar with the specific area in Northern Virginia that you want to invest in. They would be more than happy to look for an investment property for you. 

You should also do some research into which Property Management companies are available in your area and have that lined up before you purchase so they can start screening applicants right away once you close on your property. Joining a local REIA may be a good place to find a good investor agent and Property Management Company but I am sure you can find someone on BiggerPockets also!

 I am a big believer in learning from experience and think it is a good idea for you to really learn the real estate industry first before starting to partner with someone. If you are going to be the one fronting the majority of the money in future deals you would want to have a good idea how good the deal was and what the risks involved are instead of having to rely on someone else's advice. 
   

@Cayman Fox I would definitely recommend house hacking and making that your first investment. You will be able start saving a lot of money due to the fact that the renters in your residence will be paying most if not all of your mortgage. It's also much easier to do while you are young and don't have a spouse or kids.  

@Gilbert Jagot You can do what @Amir Ali recommended to confirm your suspicion and if your courthouse is closed due to covid-19 you should at least be able to look at the online real estate record to see when the house was built.   

@Elad Bicer I can't say I am surprised that they are starting to charge fees since they are in business to make money. I was thinking one of these days they would eventually make you sign up for a premium account before you could list properties for rent or FSBO listings. I am a little surprised they are charging by listing instead of just having a flat fee per month for unlimited listings.

Still for the value it provides the price is still very low and if anything you can offset the extra cost with a higher application fee or slightly higher rent. Think of it this way would you rather have Zillow go out of business and have to find to find another way to advertise rentals or pay a nominal fee per listing and ensure it stays in business.