All Forum Posts by: Brian Sparr

Hi @David Katz - congrats on the purchase!

Most of the lenders I work with right now are offering a 1/4 percent improvement for each point ... that would imply 3.5 points for your deal - not the 1.662 you're being offered.

Unless you think rates are going to continue to drop during these next 2 years, I'd pay the points.

By the way, who's the lender?

Hi @Lindsey Iskierka, we like to use IPX1031 - they're a subsidiary of Fidelity National Financial.  James Callejas is our go-to person, but he's based in the SF Bay Area ... they've got SoCal people, though, in case you want somebody more local.

Congrats on the sale!

Hi @Vinay Patel - we work with a number of lenders that are able to complete loans (from loan application to funding) in less than 2 weeks ... that said, jumbo loans do typically add some extra time to that, but we're talking about maybe an extra week - definitely not as long as what you're experiencing.

If I were in your shoes, there are 3 things I'd do immediately:

1. check with your real estate agent to see if the loan contingency is still in effect ... if it is, your earnest money is likely still protected ... find out one way or the other, though - you need to know what's at risk.
2. call your loan officer's boss and escalate the issue.  Not knowing what the loan conditions were, it's hard for me to say if this length of delay is normal, but, in general, 18 days seems excessive.
3. call another lender to see how quickly they could push you through.  In the two markets I work in, local mortgage banks tend to move the fastest.  One of the problems you might run into, though, is that with the recent rate drop, there are a bunch of refi loans in the pipeline for all these guys and it can slow things down.

While the idea of switching lenders at this stage of the game is not ideal, if it's what it takes to get the deal done, I'd do it.  From the seller's perspective, it's still in their best interest to see the deal through with you - even if you have to delay a little bit longer than the extra 2 weeks they just gave you.

Good luck!

@Account Closed mentioned).  That said, I definitely think there are some points you need to consider:

• for starters, does 20% down put you in a cash flow positive position?  For the markets that I work in (SF Bay Area and Raleigh NC metro), if 20% works, it's generally going to be by just barely.
• 25%+ down typically gets you your best rates on investment loans; however, you should do the math to see if it's worth it.  Take a $250k purchase - say, you can get a 4.75% rate at 20% down and 4.5% at 25% down ... the PI difference on that is only $93/mo ($1116/yr) - it's going to take you over 11 years to recoup the extra $12.5k that you had to put into the down payment.  In this example, is shaving 0.25% from your rate worth paying over $12k today? Not for me...
• I'm not a fan of putting 50% down on your third property when the intention is to simply use the extra income from it to help pay off the loans faster.  Why lock up the money like that?  Why not just keep it in the bank (or stocks, bonds, CDs, etc) and pull from it directly each month to achieve the same goal?  By not sticking it into the property on day 1, you maintain full control over it - you can apply it to the loans, you can use it for an unexpected emergency, you can use it for your next down payment. Cash on hand can be a good thing!
• You're both working and don't plan on retiring for at least a decade ... you don't need to focus on cash flow today - you should be trying to maximize your capital growth.  As you get closer to retiring, your focus will most likely shift and the cash flow will take priority.  Putting 50% into property #3 today is a cash flow play - splitting it into properties #3 and #4 is capital growth play.  I'm with your husband, I'd be looking at picking up 2 places.

If you want, feel free to email me some more details around the properties that you're considering - I'm happy to run the numbers and give you a second opinion.  I work through scenarios exactly like this every week with clients - we examine the returns based on the full range of down payments (20% to 100%) and then layer in the domino effect you can create by paying off one of the loans early.  Often times, seeing the numbers based off of actual properties (with conservative growth assumptions) will remove the guess work from which decision is right for you guys.

Hi Ebony Smith - give the guys at either Advent Properties (http://www.adventpropertiesinc.com) or Vision Property Mgmt (http://vpmpropertymanagement.com) a call ... both specialize in the Oakland market. Good luck, - Brian

Hey Nick Thurston - I'd love to connect and grab coffee - I'll send a separate msg to set it up. - Brian

Regarding rentometer - I'm not very familiar with the site, but I just ran a search and it included results from 2008 in it's calculations.  Considering how dynamic many markets are, this is an immediate red flag.  Unless you have the Pro account and can see the listing date, I would hesitate to put much faith in the results being a reflection of your current market.

Regarding the MLS - I'm an agent in the SF Bay Area and only a small fraction of our rental market actually goes through our MLS. If a licensed agent didn't represent the landlord, the listing will not be entered into the MLS. In addition, even if a licensed agent did represent the landlord, it's not guaranteed to be entered into the MLS.

I agree with @Kyle J. - you need to combine a number of sources. For me and my local market, that means craigslist, property managers, the MLS and doing my own rent surveys.