It's been one heck of a ride thus far!

11 Replies

It has been a while since I've posted.  Here is what has been going on behind the scenes. 

Started a refi on my personal residence with a cash out option back in April. This was going to do 2 things for me; 1st get me some capital to work with to kick off this investing career. 2nd free up my VA for a future house hack situation.

Not all has gone well.  Remember, this refi process started back in April and around that time I had a fair market assessment that a lender associate of mine looked at and said that according to the comps used, my house should appraise around $310K.  Fast fwd to Aug when the appraisal was finally done and I'm looking at $280K value and I owe $275K.  Not cool, and the mix of emotions that ran through me were all over the board.  I felt 1st that the process took too long anyway but the $30K difference left me a little deflated... temporarily.  

So now I'm regrouping, and coming from a different angle. I have done a IRRRL still freeing up my VA for that future house hack and saving me half a point on my loan and putting $100/mo back in my pocket (not huge but it works for me in the position I'm in. Btw can I consider that cashflow???). And now the game is seeking out some owner carry opportunities here in the Boise/Treasure Valley area of Idaho.

All is not lost.  If anything I have enjoyed the fact that this situation has caused me to think outside of the box on ways to get into the game officially and not just be a spectator.  The goal is to close on 1 property before the end of 2015 and I will be successful.  

So if there is anyone out there looking to get rid of a property I'd surely be interested in seeing if it is a fit for the both of us.  

Thanks BP for all of the education and for creating a space for someone like me to be able to share my story.

Hi Jabari,

First of all $280 is more that 90% of $310- if two appraisals are within 10% of each other, I believe they are both considered valid. At least that is what I was told back when I was doing mortgage loans. Our loan auditing process which would include a new appraisal with an acceptable variance of said 10%. 

The $100 in your pocket  will help with your home/rental cash flow more easily. Good job on this first step towards being a landlord. 

Question on your IRRRL loan, doesn't that loan still tie up your VA loan eligibility?

Good luck on your quest!

Lisa Troxel, Real Estate Agent in ID (#SP39885)

Thank you @Jonna Weber. I have been looking forward to making it to my next REI meeting. Work on the yard has been keeping me in Mt Home late but I'm staying active.

Thanks for the curve ball on that IRRRL @Lisa Troxel. Lol. That was actually poor education on my part. Lesson learned for sure. Fortunately it hasn't "cost" me anything this time.

@Jabari Brooks great job setting your intention. "I will be successful!"  

The first step is believing we WILL do it and saying it out loud.  Good luck on your first close!

@Jabari Brooks I saw your post. I'm having trouble finding solid information on restoring a VA entitlement for a property I still own. I am refinancing it traditionally right now. Are you saying that after it is refinanced you can restore your full entitlement? Is this the "once in a lifetime" restoration?

Hello Jabari,

Sorry about the lower than expected appraisal- we wen through that with a recent purchase (15% lower than purchase price) and we ended up having to start over with a new lender.  The next appraisal came back at the purchase price so it all worked out, just took time!

I'd say $100 lower payment IS a win- that is $1200 less that you are obligated to pay for your mortgage every year, so $1200 more that you can spend yearly on investments. One thing I wish we'd done differently was that when we refinanced our house before getting into REI, we went with a 15 year term since due to the lower interest rate the payment was about the same as we had been paying on the 30 year loan we had. If we had kept it at 30 years, we could have had a payment that was $300 lower, giving us more buying power considering the DTI ration that banks look at. Oh well, it i all working out, just would have been easier the other way around!

Kelly

Originally posted by @Bryan O. :

@Jabari Brooks I saw your post. I'm having trouble finding solid information on restoring a VA entitlement for a property I still own. I am refinancing it traditionally right now. Are you saying that after it is refinanced you can restore your full entitlement? Is this the "once in a lifetime" restoration?

That's going to be your best bet. I thought I was in the clear with my IRRRL however I'm not. But from what I understand (and have seen done) a traditional should restore your entitlement and you can rinse and repeat the process over and over.

@Kelly N,  thanks and that's exactly what I intend to do.  Any "extra" funds will be used for investing power.  

On the positive about your 15yr term, you're building equity a heck of a lot faster now and the lesson you learned from the experience was surely a valuable one.  

Hi Jabari, 

You will get there - I know it! I It has been fun working with you to provide insights, flag  properties and ride this re-finance wave with you along the way. I just thought of you when reading another post where someone mentioned Brandon Turner's book, The Book on Investing in Real Estate with No (and Low) Money Down? I've not read it, but wonder if it would supplement our current ideas. 

Also, there's someone I'd like to introduce you to at the next Avid Investor's meeting - just because connections often lead to connections. 

Warmly, 

Stacy

Hello @StacyA McBain, 

Thanks for keeping me in your thoughts. Brandon Turner's book was my first piece of Real Estate literature.  That's how I found BP!  It has been great working and learning the process with you.  Thank you for your patience and willingness to help.  I look forward to the next meeting as well. 

Jabari 

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