All Forum Posts by: Filipe Pereira

@David Zheng:
1) PMI
2) I am getting a lower rate through my lender because of a first time buyer discount, which requires 20% down. 

Yes, I am planning on living there and house hacking. I should be able to qualify without any issues. I was pre approved for 400K. Time will tell though!

Thanks @Eric Bilderback

@Percy N. then I will have to dip into my Roth and brokerage accounts. But- the roof, furnaces, and water heaters are all pretty new. Not to say they can't break, but just saying it's unlikely. 

He's doing me a solid as it is. Similar properties go for 250+ based on income. I already asked him about seller financing, and we both agreed it's not something either of us were interested in. Plus, like I said, he doesn't have much equity in this, and is already losing 60+ on the property. 

@Nathan Voisey not really. He owes too much on the property. Plus, he's not being the friendliest of sellers right now. lol

@Stone Teran I agree. This thread is largely irrelevant at this point. At first I was going to go NOO, thus requiring 25%. But since I went OO I only needed 20%. I pulled a loan on my car because I didn't want to touch a brokerage account or my Roth IRA. There is enough in those accounts to pay off the car loan right now if I wanted to, so I'm far from my last dollar. The interest rate on the car loan is SIGNIFICANTLY lower (1/10th) than the rate of return on my Roth at the moment.

@Stephanie Medellin I thought the same. The only reason I could come up with is because the bank is only requiring the 20% of the mortgage they are providing me, not 20% of the sale price as a downpayment. What I pay above the mortgage is sort of null to them, as they never actually "see it" (goes straight to seller at closing). So the loan is for 180K. 180K * .2 = 36K Which I have in liquid assets. The personal loan would have been to cover some of the gap between the 180 and 200. 

And why is that? @Stephanie Medellin? 

So this deal is still in the works....unfortunately. The seller tried to terminate the deal once or twice and we've been able to bring it back to life a couple of times now. 

Some updates: 

I've decided to go Owner occupied, so now I only need 20% down (to avoid PMI)

The seller and I agreed to a purchase price of 200k after the property appraised at 180. I agreed to bring the 20K to hit the agreed price of 200. The bank was OK with me getting a personal loan so long as it did not affect my DTI a significant amount.

I applied for a personal loan, but because I just graduated, I have a fairly short employment record with my current employer. Combine that with the fact that I've only had credit for 5ish years, and the outcome is that they were not able to give me what I needed. 

Since then, the underwriter at the bank decided that the appraisal wasn't good enough ("too many mistakes", so they are ordering a second one. Hopefully it appraises higher. Waiting on that. Meantime I   essentially pulled a loan on my car (woohoo for paying cash for cars) to free up some cash. The monthly payment is so low (stretched it out over 5 years) that it should not affect my ability to get the mortgage. 

@Russell Brazil it's a non MLS transaction. He got a agent, but it was somewhere along the way.

@Michelle Buchignani thank you for your first post! hopefully the new appraisal comes in higher. 

@Kurt Gardner thanks. The mortgage gal is an investor herself, and sees the good deal, but she's not the underwriter unfortunately, and can only do so much. 

Since this has all gone down, the seller has now tried to terminate the deal on the basis that he never got my mortgage commitment....so the attorneys are getting involved now, and I may lose the deal...we will see...

That's basically what the appraiser did. Even considered the great cash-flow. Apparently it wasn't "good enough"...which I don't understand because I've analyzed over 500 properties in the last 6 months all within a 10 mile radius, and none of them have cash flowed as well as this one. 

Sorry if I sound like I'm complaining. I'm frustrated and shocked at the process at the same time. Thanks for your help everyone. 

@Frank Spaulding that's basically what I was thinking. I will risk more cash in appraisals and loan applications...oh it's a deal. $200,000 bringing in $3600-3800 a month. Taxes are 5k. insurance is 1,000 a year. That's unheard of in my area. 

@Matthew Paul that is true, but unlikely. It already didn't appraise at the original price of 205, so that has me a bit concerned. 

@Keira Ingram I reviewed it, yes. None of the comps were all that great, but most of the people who buy in that area don't sell - so there aren't many comps...

Long story short, really struggling to close on this property in Connecticut. I'm pretty sure that most things that could come up, HAVE come up, or will be coming up soon. LOL.

Here it is: Seller and I agreed to purchase price of 205. Appraisal came in at 180K. We settle at 200, and I agree to pay the 20K out of pocket.
The bank says "OK, that's fine, but we will only finance the 180".
Me: "Cool, no problemo"

Bank today: "So uh, yeah...that appraisal? The underwriter didn't accept it. It has too many mistakes in it".
Me: "What do you mean too many mistakes? You guys chose the appraisal company (a highly insured one, at that), and I paid big bucks for it...What do you mean it's not good enough?"

....So now they are ordering a 2nd appraisal, and they are paying for it. 

Now...the fun part. I'm no genius (this is my first REI deal), but something tells me they either
A) Thought the comps were way off. (Good luck to the new appraiser, because there are no decent comps in the area)
or
B) They are afraid it appraised too high, and want the second appraisal to come in lower, thus making me pay even more out of pocket. 

Does anyone have any other suggestions or advice regarding the situation? Have you faced something similar? 

Hey @Raymond Murray welcome. We have a meet and greet (with a guess speaker) every month in Manchester. @Jacob Reilly helps organize it. If you are looking for a buy and hold, talk to @Rick Santasiere, he owns his own brokerage company, and is really a pleasure to deal with - he's currently helping me close on a tough (but great cash-flow) deal in East Hartford CT.