New to Real Estate · International · Member since 2015 · 30 posts · 5 votes
I have a 9 units and I recently finished a property that I would like to sell. However I am sure that I would be able to rent it quickly and I feel very confident in the improvements that I made in order to make a great rental with very little capital expenditures. The home has 4 bedrooms and is in a C+ to B- Area. I have approximately 75% of the value of the property invested and it has been on the market for about one month now. I feel that I am just holding on and I want to move on to the next project. I was just wondering how long you would hold a property that you feel was listed at a discount. I keep thinking that I could always sell the property at a later date but the area is probably not going to appreciate in value. I think that it would take me about 8.5 years (about 100 payments/ months) to receive the amount of payments (gross) that I have it listed for. If you could shed some light on this subject I would be very appreciative. Thank you for your expertise.
Investor · Lake Worth, FL · Member since 2014 · 378 posts · 184 votes
10y
Why not consider doing a HELOC as an alternative. Most will give 80% and get a free appraisal as well as no closing costs. The only problem I see is some places won't do it because I'm assuming you don't live in the property itself but many will. Use the funds to buy another property and have the tenants pay the loan off. Since it is a loan there are no down sides for tax purposes and the rates are very low at this time. Just a thought! One month is really not that long either and you can re-list again so it shows up as a new property on the MLS. I don't know your market either since winter is approaching but I only see upside for you. Good luck and best regards.
Investor · Greenville, SC · Member since 2012 · 269 posts · 187 votes
10y
@Dean Hulsing ultimately you know what is best in your situation, but if you want to be able to use those funds to invest in other properties it might be worth refinancing. You'll get 75% LTV, so you'll basically get all of your cash back and end up with a cashflowing property.
New to Real Estate · International · Member since 2015 · 30 posts · 5 votes
10y
@Paul Smythe Thank you! Some more information about the property..... I actually own the property outright so the cash flow would be great. I was more interested in getting an opinion of what the time frame I should be contemplating on holding the property and if there are calculations that would help make my decision easier. The appraisal would cost about $350 and I would estimate another $1000 (or so) for the closing cost on the a 75% LTV loan. I spoke to the local bank and asked them to do an appraisal but then I held back this appraisal because of a couple of showings that seemed promising.
Investor · Lake Worth, FL · Member since 2014 · 378 posts · 184 votes
10y
Why not consider doing a HELOC as an alternative. Most will give 80% and get a free appraisal as well as no closing costs. The only problem I see is some places won't do it because I'm assuming you don't live in the property itself but many will. Use the funds to buy another property and have the tenants pay the loan off. Since it is a loan there are no down sides for tax purposes and the rates are very low at this time. Just a thought! One month is really not that long either and you can re-list again so it shows up as a new property on the MLS. I don't know your market either since winter is approaching but I only see upside for you. Good luck and best regards.
New to Real Estate · International · Member since 2015 · 30 posts · 5 votes
10y
@Charlie DiLisio That is a good idea. I am not sure about a HELOC when I don't live there. It sounds great but what are the banks that don't charge for an appraisal? I have a long term account with US BANK but I don't currently have any loans with them.
New to Real Estate · International · Member since 2015 · 30 posts · 5 votes
10y
Thank you. I have never thought of using USAA. I have heard that their rates are very good and they are easy to work with. I have had insurance with them for several years. I really appreciate the information and discussion.
Investor · Lake Worth, FL · Member since 2014 · 378 posts · 184 votes
10y
Thank you for your service Dean. I was Navy back in the day and Navy Federal is great as well. I have also heard that Pen Fed has a great program as well. Good luck in your ventures. Every day above the ground is a good day and a blessing. I am grateful I was born in the USA!
Westmont, IL · Member since 2014 · 13 posts · 0 votes
9y
Dean, Thanks for your service. I also served in the Navy for nearly a decade and have USAA insurance for my current home. I'm was considering looking to the Dixon/Sterling area to purchase my first property. Would love any thoughts you could share about that area. I'm in the western burbs of Chicago. My business partner moved out there 2 months ago and so far is enjoying it. Feel free to PM if you like.
Investor · Cleveland, OH · Member since 2015 · 6k+ posts · 2k+ votes
9y
@Dean Hulsing, you wrote: "I think that it would take me about 8.5 years (about 100 payments/ months) to receive the amount of payments (gross) that I have it listed for", (as a reason for NOT wanting to rent it out, right?)
I reckon that Investors are using those same figures as their reason NOT to buy it! See?
(4 months later) Did you hang on to find the perfect owner-occupier - at more discount?...
New to Real Estate · International · Member since 2015 · 30 posts · 5 votes
9y
@Brent Coombs I actually sold it for more than my asking price $85K, but I had to pay $2k of the closing costs to the buyer). I have since invested the difference into three opportunities. The first was a ridiculous low ball offer that the bank wanted to get rid of @17K for a duplex (but the improvements will be close to 35K). My second opportunity was a hard money deal for 25k at 8.75% for one year. The last one is a duplex that was on the market for a while and was listed for 47K. I am closing on Thursday @ $28620. I look forward to the increased cash flow and continuing to build my portfolio. I am a looking forward to more of the opportunities that real estate provides. It is starting to become fun again!!! Thanks for the input and the post!
Investor · Chicago, IL · Member since 2016 · 28 posts · 11 votes
9y
I have had non-owner occupied Heloc with US Bank in the past in Chicagoland area.They don't commit to a % upfront but tends to range >=75% on approval.