All Forum Posts by: Wendy S.

Not sure if I posted in the right area.

So basically instead of seeing if I could qualify for a Heloc with no income except documented rental income over 2 years I decided to sell primary residence bought in 2017.Current interest rate is 2.625%.

Shortly after I listed, I realized I misunderstood the 2 of the last 5 years selling rule to avoid Capital gains and that I actually have another 2 years.

Cash flow after all expenses plus $542 monthly for Capex/Repairs/vacancy is almost $700. Rent by room model. Started as a house hacker.

Sale will realize in excess of $120K net. .

I remodeled it so things are in good shape, new HVAC etc. Already emptied house of awesome tenants.

I am keeping 2 other rental properties that cash flow over $3,000 combined which I use as job income replacement.

Now I'm not sure what I'll do with the proceeds from the sale as interest rate is crazy and I'm wanting to move away from current model to investing bigger and better with better returns. (I had no money left in the house as I had previously cash out refinanced all of it)

Am I overthinking? Should I try Figure for a Heloc and keep property?

How do you move away from the house-hacking mindset when you no longer need to do it but do not wish to buy a house to live in and pay to live in it. I'm currently hacking another place that costs me around $100 or less monthly but looking at purchasing something else in the coming months. We do use 3 beds/ 3 1/2 baths now which could all be rented if we bought another place.

Finally, I'm thinking, factoring cash flow, depreciation, mortgage paydown, offsetting taxes plus speculative appreciation: I would need to be getting at least a 20% cash on cash on my $120K to make it comparative to what I already have.

Side note

Investment properties have at least $200K equity with a 80% ltv. Should I sell the primary and try to pull funds here to deploy later?

@Caroline Gerardo

Thank you for your reply.

Seller had been paying taxes, had a job until a month ago when car failed. Was approved for the HELOC hence the appraisal but that fell through with job loss. Been at job for last 5 years.

Buyer defaulted on closing date. I don't see any documentation as to why, which would still be irrelevant. Signer signed another agreement to close later, with a $5,000 advance which somehow reduced the sales price by $16,500 with the advance to be recovered at close.

I tried to say the new agreement was invalid or at best voidable. They can sue for specific performance but Seller could argue duress with the failing of the closing and signed this new agreement. Seller just needs to return the advance at a later date, and not sell the house. Credit a car if possible and buy time to figure things out.

He is frantic, doesn't want to mess up his credit and feel he is in a desperate situation. I truly fear if I can't help him find a solution by Tuesday he will go through with them.

I even told him I'm not willing to rent to him, because he's not a renter and would be more willing to help save his house. He bought the house cash at the beginning of the year, to have peace of mind having moved out of his family home after 25 years.

He has taken in a roommate but have gave notice because of the pending sale.

Solutions? Suggestions??

@Chris Seveney

If he was getting a fair deal from them, I would be ok with him selling and I would rent to him but they first told him he would be allowed to stay. Then they changed and also didn't close on the agreed date. They moved the closing, loaned him a paltry $5,000 and lowered their original $91,000 to $75,000. So he now has $70,000 left before commissions, and sellers costs.

@Chris Seveney

Anything is possible before closing. Agent is onboard as well.

Good day BP family.

Background:-

1.Seller has committed to sell house to company for $70,000.

2.House appraised for $135,000

3. Seller failed to get a mortgage, no income. Delivery driver income loss because of car failure.

4. Seller asked for $20,000 upfront to buy used car for work, pay bills (all of which are presently current) and have some money left over.

5. Seller would love to remain in the home.

Options we are discussing.

1. I purchase the house outright for about $103,000 cash. This price was suggested by me as fair price, seeing that I would be reselling in short order. So enough to cover selling costs with about $11,000 profit with sale.

2. Lend Seller money and put lien against title and seller repays at agreed rate.

Here is what I am thinking:-

1. Purchase with seller financing with $20,000 paid upfront amortized over 30 years.

2. Seller rents property for about $1,100-$1,200 monthly.

3. Seller buys back the home within 6 months for slightly under market value with a traditional mortgage.

Am I thinking along the right lines?

Overthinking it?

Or should I simply let seller proceed with pending sale for $70,000?

I only met seller recently when approached to rent 1/2 rooms from me by Oct 1. My model is per room rental.

Initially I offered to rent 2 rooms, store additional furniture for $1,400 with all utilities/internet paid. However, we got to talking and I began to look at how to help seller remain in home.

While I have never done seller financing before , I would hire an attorney to get the paperwork done and keep seller's agent in the loop. So all is transparent, commission still paid etc.

Any ideas/suggestions would be greatly appreciated. Have to decide by Tuesday Sept 27.

Aye, I understand. 

@Nathan G. Wow, thanks Nathan.

So the Landlord tried to be accommodating and compliant with the laws and still lost so to speak.

Will pay back here on the outcome

@Nathan G. Thank you.

I am aware that while the medical condition of the owner doesn't need to be disclosed, a letter would have to be procured from the owner's licensed therapist or practioner for an ESA. It will be interesting to see how this plays out. Apparently owner had a seizure so think an ESA would be a good idea.

My initial research spoke to the regularity of seizures to qualify with proven medical records which I know I won't have access to.

Another way out would have been the number of units owned plus the owner lives at the residence albeit a separate entrance (basement can be accessed through main house but they use 2 other entrances into their area). However, being a Realtor this disqualifies me.

Then there is the hardship for Landlord and undue burden with other occupants so as of now this seems the only argument I see. So plan to schedule a meeting and get feedback.

I posed the question for discussion and hopefully help others that may be facing the same thing.

@Naz Hossain, thank you

So today my ( Georgia) tenant asked about getting an emotional support animal. Tenant moved in June 1 and occupies a room with 2 other roommates in a shared space in our basement. We live above.

I am researching this and wanted to get the BP community and some local PM input.