All Forum Posts by: Gloria Mirza

I am in the very early stages of opening a Keller Williams Franchise.  I would appreciate it if somebody could weigh in on what the costs would be.

I would say, it depends... 

If it's a market that is still recovering from the crash of 2008, then I would consider it if you can finance the property with 25% down and still come out break even or slightly positive. If you believe that 5% growth is sustainable for the near term and you're putting in 25% then you come out with a 20% ROI per year. That's a good rate if you ask me. The key question though is where do you think prices are headed in that area!

You can get slightly positive cash flow in Stockton and Sacramento to a lesser extent.  Your tenants can cover the rent while you wait for appreciation.

I think it helps to look at why prices went up in both scenarios.  The bubble of 2008 was caused by lenders giving away money to anybody with a pulse.  On top of that most of the loans were balloon payment loans, so while a person may be able to afford the loan during the low introductory rates, they weren't able to do so as soon as the real payments kicked in, at least without appreciation in home price so they can take money out of the house (think pyramid scheme).   As soon as prices stopped going up people started foreclosing on their homes and the whole system that allowed the bubble to happen in the first place collapsed.

If you look at today's home price appreciation (at least in California), you will see that it's driven by buyers making more money and allocating more of their take home pay to housing.  This is more of a traditional reason that causes home price increase.  There is also an influence buy investors buying up homes for rentals.  Bubble or not, in order for home prices to drop we would have to hit a recession, which is very possible.  With that said, even with a recession I don't think the drop would be as severe since most people buying now have more skin in the game due to stricter lending standards.  In summary I think that we could have another drop in prices depending on your area but I don't expect to see anything like we saw in the past.  

I am trying to purchase a house using a conventional loan.  The city boarded up the house because there were squatters in it and it is classified as "uninhabitable" because it hasn't had utilities for a number of months.  The seller is working on getting the house classified as habitable again so that I can buy it, but I don't think they will remove the boards from the windows and doors and frankly I would prefer they leave it to help deter squatters.  My question is, if the uninhabitable classification is removed but the boards still are up, will I be able to get a conventional loan on it provided everything else is ok or will the appraiser block the purchase solely based on the house being boarded up?

I have never tried this but thought it would be interesting. What if you put in two offers one at a lower amount with a conventional loan and one at a higher amount with a VA loan. Let the seller then decide which offer he/she prefers.

She needs to claim it as an investment property on her schedule e.  She will have losses but assuming she doesn't make more money from her real estate investments than she does from her job (it doesn't sound like it) she will not be able to claim it as a tax deduction.  What will happen is she will have a loss that she can then keep carying forward on her taxes until she finally starts making money on her rentals at which time she can deduct the loss from her rental income.

If you have some money in the bank, my recommendation is to put some skin in the game and perhaps pay for 10 or 20% down and guarantee him to be paid first when the house sells or is refi. That reduces his risk which might translate to better terms. If that doesn't work my recommendation would be to find the best terms you can with a HML, present that to him and see if he can beat those terms. If he does then great, if he doesn't, go with the HML.

If the duplex has been on the market for 120 days, without knowing anything else about the duplex I would guess it is not a good deal if you are paying the mls asking price.  The seller is probably more desperate to sell than you are to buy.  If you really want the duplex, you can try negotiating with the seller.  It's not like they're going to get another offer in, the worst they could say is no.

Do not cash the check!!!  I don't know the laws in Maryland but in Calfiornia if you cash a check for partial rent then it's as if the tenant paid full rent and you have to start the eviction process.  There are two types of tenant that don't pay rent, those that have fallen on hard times and can't pay it and those that go into the lease with a plan of not paying it and working the system.  I'm sorry to say this but given that she just moved in and stopped paying rent it sounds like you have a professional scammer on your hands.  Begin the eviction process as soon as possible!