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House Hacking

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Nicholas Coulter
  • Real Estate Agent
  • Southern California
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2 - 1 rate buy down saving deals!

Nicholas Coulter
  • Real Estate Agent
  • Southern California
Posted Oct 28 2022, 21:55

Hey House hacking community!

I recently got a someone a deal in Moreno Valley and while working with their lender we got a great deal with a 2 - 1rate buy down. I was able to negotiate the seller to cover the rate buy down and the entire closing cost which will lower the clients mortgage by 600 the first year and 300 the second. 

This takes her from living for free to cash flowing wile there by 600! The bummer here is her rate goes back up in 2 years to the normal rates now of 6.79%. But the seller is paying for the buy down and were hoping to get a refi for her in 2 years!

Its super important to have a lender and agent who work together to have these conversations!

Any questions about this I am willing to answer!

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Luke Stewart
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  • Investor
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Luke Stewart
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Replied Oct 29 2022, 06:56

This is awesome! That's a solid strategy for the current market, we just have to hope rates drop in 2 years (which i think will happen but no one really knows), I may talk about this with my lender and agent!

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Nate Sanow
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  • I​nvestor & Agent
  • Tulsa, OK
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Nate Sanow
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  • I​nvestor & Agent
  • Tulsa, OK
Replied Oct 29 2022, 07:25

This is how stuff was negotiated 2012-2019, its cool seeing it come back… even if I am starting to miss the hot sellers market in some ways. Anyway, congratulations on the deal well done!

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Replied Oct 30 2022, 18:05

Can you explain what a 2-1 rate buy down is? Sounds pretty creative. 

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Nicholas Coulter
  • Real Estate Agent
  • Southern California
255
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584
Posts
Nicholas Coulter
  • Real Estate Agent
  • Southern California
Replied Oct 30 2022, 21:01
Quote from @DeAndre Mason:

Can you explain what a 2-1 rate buy down is? Sounds pretty creative. 


 Yeah you can buy down the rate by 2% the first year and 1 % the second year. 3rd it’s back to the rate you lock today. It’s best when you can get the seller to pay for it in concession !