All Forum Posts by: Tom ONeil

$1,400 for SF in Charlotte, NC.  3 BR. 2 Bath, 1,250 Sq Ft.

@Kerwin Montilla You can offer $80k, worst thing that happens is they say no!

Hard to say without knowing what the property is, but it couldn't hurt.  It might not necessarily be the walls, but the attic or basement or crawl space as well.  If you have access to a thermal camera you may be able to see from the inside where cold spots are and figure out a way to combat them.

Windows are a big area of heat loss too, if they are old that might be the biggest problem.

For me, if the cash flow is breaking even, I would hold onto it. Regardless of what your paper ROI is, in this scenario if you sell now I would imagine you would take a net loss due to all your selling expenses.

The other way to look at it, see what you would net from your sale and analyze putting that amount into an index fund for five years or so.  See where you think this property will be if you sell in that same five years from now.  

Just my 2 cents.

@Account Closed My understanding from a recent conversation with a lender is that USDA also has 100% loan options now.  Those are usually only available in more rural areas, only certain properties will qualify.

@Shane Gaboury Part of your decision in 2-3 years needs to be what you are holding the condo for.  Are you holding it as an investment for cash flow (looks like there wont be much at that point) or are you holding it for appreciation?  Personally, I look for sustainable cash flow first and consider property appreciation as a bonus, but I do know in certain markets that investors will hold for appreciation, which is a bit risky for me.  

@Kendrick Rutherford Have you discussed this with a lender?  If you are moving into a new home and the one you are renting is no longer your primary residence, cash out refinancing on an investment property carries much higher rates in my experience.  

Other things to weigh in this decision are if you are using the equity you take out to buy properties that will net $500 per month is what are your additional payments on the other mortgage?  Hopefully less than $500 per month.

Having more properties that provide the same level of income has some pros and cons.  Pros would be more stability from vacancy (one property being vacant will not eliminate all or most of your income) and increased equity over time as mortgage balances decline.  Cons, more tenants = more headaches, more maintenance, etc.

@Brendan OConnor My hope is that if there is another correction similar to what we saw, the results will be a bit different.  Lending has loosened up recently but I don't think it is anywhere near where it was back in 2006-2008, so my hope is that people are better positioned in their homes to ride out the downturn rather than be upside down on their mortgages and just walk away.  

I guess my question is, what do people think would drive a market correction?  A couple factors I can think of right now would be:

1) Increased inventory - new homes are being built like crazy all around the area.  We are still in an inventory shortage situation which is driving up prices.  If inventory picks up, prices should go down.

2) Increased interest rates - as rates increase, an equal monthly payment will result in a lower financed value for a house.  This will decrease the dollar amount people can receive financing for.

3) Business growth/Political climate - Have we seen the last of the fallout from HB2 or is there more to come?  

Personally, I feel confident that I am positioned to make it to the other side.  My investments are currently in buy and hold rentals, which have untapped equity and good cash flow.  A 30-40% decrease in current rent prices would be sustainable for me.

@Jason Branch Zillow usually has houses for the last two years in their "recently sold" category. If you don't have MLS access or an agent who you can go to for those questions, i recommend Realtor .com for that info. Their recently sold houses are typically in the last 6 months and more accurate, at least in my area.

@Hannah Wilkinson Not sure if anyone touched on this yet, I skimmed above but aside from what everyone else said about the benefits of working with a buyer's agent, there are also pitfalls to working with the seller's agent without representation of your own.

There are different levels of representation and different levels of service that can be provided based on those.  

Long story short, a buyer's agent always has your best interest in mind.  They can provide you advice and help you negotiate.

Working with a dual agent, where you sign an agency agreement with the seller's agent, that agent will only be able to provide you with material facts about the property and pass communication between you and the seller.  They cannot help you negotiate or advise on how to structure your offer or what things to ask for (maybe include appliances, etc.)

Working with the seller's agent as a Customer (as opposed to a Client in the two scenarios above), you are not represented.  Any information you share with the seller's agent about your motivation, negotiating position, etc, that agent has the duty to pass that along to their client, the seller.  

The difference between a Client and a Customer is very important and one of the most misunderstood concepts.