All Forum Posts by: David A Lisowski

@Lauren Smith

You have two different things going on here.

Will you be more limited by your down payment and closing costs?

Or will your debt-to-income ratio limit your purchasing power?

If you spent the money saved on down payment and closing costs (and possible reserves), would that be enough for what you want to purchase?

Paying off debt frees up debt-to-income ratio which is a qualifying factor for mortgages. You'll probably be capped at 45% with the new debt.

I can explain more if you'd like.

@Daniel T Stockman

Is it ever too soon to make more money?

In all seriousness, your frame-of-mind needs to be based on what makes a good deal and if the numbers work.

If you can afford to spend the money, and you are okay with the return, then it is worth the investment. No one gets ahead by saving.

If you are financing the property just be sure you document additional reserves per property. Each investor has different requirements, but you may need 3-6 months PITIA reserves per property. Some even require 12 months; others require liquid reserves only; some increase reserve requirements when you have 3+ or 4+ properties, etc...

But again... if the numbers work, why wait?

@Robert Nelson Fueston

Paying for 1.495 in points, a $700 appraisal (that should be an over-estimate), and then your escrow setup are the only things that stand out to me.

The rest is pretty standard.

I agree. This is surprisingly high for such a low loan amount. But then again, I don't know if this loan is TRID or conforming. I don't have much experience in loans under $100k. I know a lot of lenders have lower limits on loan amounts.

@Joey Wilson

Welcome to BP!

Congrats on getting your RE license. Are you mainly investing in the Chattanooga area? North GA? Or elsewhere?

Look forward to seeing more

Good analysis.

Bad deal.

I can't speak to the rehab costs and after-renovation value since I am not familiar with the area.

I feel I'm in the same boat. I want to just analyze deals and get feedback that my analysis is sound. Not necessarily looking to make a deal on an investment at the moment.

@George Munoz

Wagon Wheel or Rudy Title

@Jeffrey Auckland

How's the rental market in that area?

Could someone on BP add this to their portfolio?

I can understand, that as the seller, they want to save on commission by going FSBO.

I'd at least have an attorney to review documents. My parents ran into an issue on a property with the entire HOA's plumbing and sewer line having an easement right through the property. Both agents missed it, but the attorney pointed it out. They squashed that deal. Sure that's from a buyer perspective, but it was also beyond the scope of the seller and agents.

But it seems the consensus from buyers' agents is they don't like FSBO deals. Not that you can't do it. You could negotiate a lower commission with the agent.

@Jon S.

Working on a few right now. Cash-out refinances are available.

Search for local lenders. We'll underwrite the loan to FNMA standards (conforming). Then eventually the loan gets sold over to a bigger mortgage company like Wells Fargo or Chase or Bank of America.

I've never had personal success with dealing with Wells Fargo or Bank or America directly when it comes to mortgages. I've always found better terms with local lenders (and then they usually offer me a job, haha!).

But there are tons of things that can derail a loan especially with new COVID guidelines and overlays. So nothing is a slam dunk. But very few instances become impossible so there's almost always a way to work it out.

Oh, yeah, or you lean into it.

Be a pot friendly rental. Especially since you are in a recreational state

They can consume marijuana in other forms.

Smoking, by burning plant materials, whether cigarettes or marijuana or cigars, is going to smell and permeate. And, let's face it, it bothers people.

Sure they think they are doing right by being outside while smoking. But if other tenants are complaining about the smell, then they have to stop. They can get something that isn't burned with fire.

Or are you just predicting that this might be an issue?