All Forum Posts by: Bonnie Low

Have you contacted your local building department? Only they can answer this question for you with accuracy. Most are not "out to get" people for unpermitted structures. Often times structures were built before permits were even required. I wouldn't be afraid to reach out and ask them about your situation.

Following because I'm interested in draft subject to contracts, also. 

I think #1 is a good option. Even though the stove is sort of in the corner, you still have an efficient work triangle. I wouldn't put it in the island because you'll constantly be battling grease and splatters when you're cooking and people want to sit at the island. It has to be a VERY big island to accommodate a cooktop safely. One note on design #3, it looks like your doors open the wrong way on the tall 3-door pantry on the RHS of the kitchen. Keep the window if you can. Most people want natural light.

If you're going the BRRRR route, make sure you have your refi lender lined up in advance since you're dealing with a mobile home. Some lenders have strict requirements that apply to financing mobile homes that don't apply to stick built homes, for example limitations around how old the mobile can be to qualify for financing. You wouldn't want to do the purchase only to find out you can't get a loan to refi and pull your cash back out. Also make sure you're working with a Realtor who really knows mobile home valuation when you run your numbers and come up with your ARV on the mobile. That ARV will make or break your deal.

There are pros and cons to each. Because we live in rural CA, we have lived most our lives on septic systems. It's not a big deal. You need to make sure the septic tank is inspected before you buy the property, it should be pumped (emptied) before you buy it and make sure the leach field is in good condition. Also make sure that it is sized appropriately for the number of bedrooms the house has since that is how you determine adequacy of system size (i.e., number of people who could be using it). If all those things are ok, you should be good to go. Of course, tenants flush all kinds of crazy things down their toilets and this will clog a septic system just like it will clog a sewer system.You also have to pump the septic system every so many years. We have a 4 bedroom and can go about 6-8 years between pumping so it doesn't happen very often. Sewer systems are usually preferred by most people. Sometimes that's just due to familiarity - it's what they know. There's an assumption that the City pays for sewer system upkeep but, of course, YOU pay for it through your sewer fees and sometimes those can be very high monthly fees so look into the cost and find out if it's common in your area for the tenant to pay the sewer fees or for the landlord to pay them. Also know that, in most cases, while the city will pay for maintenance of the main sewer line that runs down the street, maintenance of the line that runs from your house to the main is on you. Those can give out (which is why you should have your laterals inspected before you buy) and are often subject to infiltration by tree roots. That can be costly to replace and if those laterals back up, can create a huge mess for you. Hope that helps!

@Karen Margrave I'm just seeing this in my notifications. Can you confirm the location? Do we need to reserve a table? Any entry fees?

This is a great conversation so thanks for starting it @Mike Terry. My opinion is that there are several key differences between the flurry of refi's now vs during the housing bubble. One is that lenders have significantly tightened up their standards. Whereas before we were seeing refi's based on 100%+ of the home's appraised value, today we're seeing 70% - 80% on the high side which means a sizeable equity stake remaining in the properties and the ability for the homeowner to weather a 20-30% price drop if the market suddenly tanks. So, they're less likely to be underwater or significantly under water in a downturn. Appraisals themselves are much more strict than they were during the bubble. Drive by appraisals were common. Lenders didn't really care too much about the value of the home because they knew they were going to bundle the loan with other sub primes and sell it. A lot of banks got stuck with under water properties which forced short sales. They're not anxious to repeat that so the entire system is more conservative than it was during the bubble. Also, I'm not personally seeing a lot of people doing cash out refi's to buy luxury items and finance vacations. Most people remember 2008 like it was yesterday and either got burned themselves or watched their neighbors or parents get burned from those frivolous decisions. As one previous responder already said, many are using the money to improve their homes and there are many, many, who are using the cash out to fund their next real estate purchase. In my book, that's a much more solid investment than a luxury item. And we're in the middle of the pandemic which has people operating much more cautiously with their money. Another difference is that many people during the housing bubble were getting into adjustable rate mortgages and that bit them hard. I don't believe there's a lot of that going on right now. Finally, here's one other thing to consider - there is a school of thought which I happen to subscribe to - which is the debt itself can be the asset. With interest rates this crazy low and inflation what it is, it makes a lot of sense to take out fixed, long term debt at these rock bottom rates. If you don't use it, your dollar is losing value every day to inflation.

@Tom Gimer I'm looking to do my first subject to. Have you done one? Do you have any specific recommendations or sample purchase agreement templates I could use as a starting point. I realize subject to agreements probably aren't cookie cutter but I would imagine they have common elements. Thanks in advance!

Good feedback @Jon Kelly.  We haven't received a copy of the property appraisal yet - our mortgage broker has just told us what it appraised for - but I will check to see whether rental appraisal was included in the initial appraisal and check to see if they're charging us now for that piece. Thanks!

Well, this is a new one for us. We're in the process of a BRRRR. We're doing a cash out refi from our hard money loan into a conventional 30 yr fixed. The property has been rented since December of 2020 and we have the tenant in there with a 1 year lease. It is managed by a professional property management company in our area. The house itself was already appraised for about what we expected it to. But now the lender is requiring a "rent appraisal" evidently to determine how much it should rent for. Why would they require this when we can show them a 1 yr lease and receipts for what it is actually renting for?? We're confident it's in line with the market so I'm more annoyed than concerned, but it feels like just yet another delay tactic and hurdle. Can any lenders out there explain what this is about?