All Forum Posts by: Tim McGarvey

Those of you located in the Bay Area, specially the South Bay have undoubtedly seen or at least heard about the evacuations, building damages, freeway/road closures currently taking place with the nonstop storming over the past few weeks. While it's probably premature to assess the entire situation, how do you think that these events still affect property values in downtown San Jose (where the major flooding is occurring) and ancillary areas? Anybody have a case study of a situation of a similar situation where a substantial number of homes were damaged due to flood or natural disaster and the associated real estate market reaction? 

http://www.mercurynews.com/2017/02/22/san-jose-flood-update-mandatory-evacuations-expand-overnight-about-14000-affected/ 

@Account Closed Interesting, I suppose there is still money to be made on a flip if the purchase price can be negotiated low enough. 

I'm spending some time looking at mobile home listings in the San Jose area right now, and napkin math tells me that it would be significantly easier to cash flow with mobile homes over traditional SFRs. Anyone in the area have experience with mobile home rentals around here?

I cosigned on a family members mortgage in order for them to re-finance their home. I do not assist in making payments on this mortgage. Am I still eligible to qualify for an FHA loan or would they consider that mortgage amount debt to myself? Or does in depend on the situation?

Agreed @Daniel Dexter. I work for a large general contractor and cannot recall a time where we/the owner have accepted a low bid and not paid the price for it. If it seems too good to be true, it usually is. What you don't pay for upfront, you pay on the back-end via change orders, rework, schedule slippage, etc. Just went through a nightmare project with a low cost electrician and it bit everyone involved in the butt. Word to the wise: if you're going to cheap out, do it on the trade that goes in last, not first!

In your opinion, what is the reason(s) why finding a good contractor is so difficult? What could a contractor do to retain your business? Why do you recommend a contractor to a friend or associate?

It's clear to me from reading the forum and listening to the podcasts on BP that finding good, reliable, and cost effective contractors is a huge problem in our industry. 

Thanks @Chris Mason, I was looking at the CalHFA FHA loan requirements rather than the federal FHA

I'm running into a potential issue while researching FHA loan requirements for the "Down payment Assistance" program that allows a first-time home buyer to purchase at 3.5% down. With my current job, I'm slightly exceeding the FHA Income Limit to qualify for my current and nearby counties. Part of the issue is that I am young (less than 3 years out of college) and have not had to time to save enough for a convectional loan down payment in this area (20% of $500,000 = $100,000) plus rents are so high in the area so it's a bit of a Catch 22. I can't afford the down payment because I'm making too much money to afford qualifying to pay less for it. It's frustrating that seemingly every program in place, taxes, etc are punishing me for excelling my career quickly at a young age (but I'll save the rest of that rant for another time).

Anyone run into a similar situation? Is there any flexibility around these types of limits?

I'm trying to put together a deal structure between myself and family members (grandparents). Obviously I want this to be a win-win situation for all parties. I wanted to get some input/feedback on my thinking and strategy here to make sure I'm covering all angles. 

The house is located in the south Bay Area (Milpitas) near San Jose and was purchased in about 1970. Because the housing market is so hot in the Bay Area, my grandparents stand to make a killing on their initial investment my selling their house now and downsizing to a smaller condo closer to the rest of our family about 25 minutes east.

The house is a 4 bedroom, 2 bathroom, decent sized backyard, above average neighborhood and near a elementary school. 95% of the finishes inside the house have not changed since 1970 but the entire house is in pristine condition. They take extremely good care of it and just replaced the roof last week. Comps I have looked at on Zillow in the neighborhood have modern finishes and are selling for around 750k. My grandparents home could easily exceed this if the kitchen and a few other areas are modeled and modernized. 

While I would love to purchase the home from them and use it as a income property and get some experience landloarding, the math does not add up from me given the out-of-whack housing prices. Back of napkin math: fair purchase price, 600k and would rent for around 3k. I don't see a way to make a fair deal with my grandparents without offering them an extremely low payment per month to help me finance it. A flip seems to make the most sense, as my grandparents can cash out on their investment and I could make the money created my improving the value of the property. It would be structured something like first appraising the house and agreeing on a fair market value, then I would keep the difference between that and what it sold for after renovation. I would of course give back a percentage of the profit, pay holding costs, etc.

Thoughts on this type of structure or are there any other ways I could look at this deal given my situation?

@Travis Callihan, the property is technically in Luthersburg, about 20 minutes from Du Bois I believe. I visited the property maybe 7 years ago, but was not making any observations about the REI market in the area of the condition of the home at the time. What I remember though was that the area was completely different than where I'm from (San Francisco). Any input on general market thoughts or strategies would be much appreciated.