All Forum Posts by: Anna Laud

@Christian Leon

You bet! I think you can probably get a better rate, and I hope in time for this deal = ) 

@Liz Ellis

Hi Liz! 

There is at least a National level form that she should have filled out as far as the eviction for nonpayment protection goes- maybe she has done this already. 

https://www.cdc.gov/coronaviru...

This is to say that tenants are supposed to make partial payments if possible (which you said she has), and that payments will be due when the moratorium ends in some States. If this has not been filled out, landlords may challenge this and falsified or incomplete documents may be punishable under perjury - but realistically courts will be so backed up with these it seems unlikely in most cases maybe.

I'm not sure of any programs available for application on the tenants behalf (for you or the PM to do directly without her) but this link may have some more information for you; (The National Landlord Association)

https://www.nationallandlordas...

@Christian Leon

Hi Christian! 

That seems on the high side to me maybe, with 20% down and good credit, DTI as you said. If time is of the essence, maybe there are a few places that you could try- I know that from AmeriSave is pretty quick usually and right now they are offering I think around 2.37% on a 30 year fixed and Better.com is offering 2.5% on a 30 year fixed.

You'll have to double check about origination in FL, but one of these may work out quickly for you! 

Hope that helps and I'll include the links for quick reference;

 https://better.com/

https://apply.amerisave.com/lo... 

@Chris Dimoff

Hi Chris! 

It's best that you already have your preapproval and an idea of how much you can afford to put down- when you're looking at these various locations for a duplex, it could end up coming down to this $100K being a higher % of your total purchase price- which I'm assuming these locations have different purchase price points. 

I think it probably makes sense to go this house hacking route at your age and being able to work from home for now, waiting for your 'dream home' in time. I would probably do the same thing in your situation. 

If you've already considered the purchase price point differences, I'd start to look at property tax rates to compare as well as landlord vs. tenant friendly state legislation for each area you've mentioned or look into further. 

Colorado- 

While rent control can apply in certain cities, there are places in CO that have very low vacancy rates- elevating the overall rent you might be able to collect (obviously in a % monthly rental yield ratio objective to purchase price). 

At least here I'm pretty sure that local law enforcement will be able to assist in evictions if needed and there's a sharp timeline of any notice you make as landlord being under a 72 hour max notice period - when it's up they leave or pay you; for nonpayment they have 48 hours to vacate. There might be more notices to tenants/city necessary permits that are mandated in CO, but that's probably not deal breaker worthy. 

Idaho -

is supposed to be fairly landlord friendly as well- there was a little talk in October about a plan to set up security deposits in a State Bank, in the tenants' names, but beyond that I think unless it's outlined in the lease you can raise rent as needed (# of times), pretty streamlined eviction process etc.

Washington -

I think Washington State is more landlord friendly as well- maybe bigger city exception like Seattle- I don't think Spokane though. Again, a more streamlined eviction process and I don't think rent control here either. 

So are far as your cities and plan - both seem inline with what others in your situation might also do, maybe looking into El Paso ( I think MST part of TX) and Phoenix areas might be worth looking into as well for you- both landlord friendly states.

The reason I went into so much detail however about landlord friendly- was just something to take into consideration as you narrow down your options and to keep  in mind as you move forward and compare purchase price points, taxes etc. 

At least in how I read your question, it seems like this could in time be a fully rented investment property for you (should you cash out refinance a little bit down the road to move forward with dream home purchase), and I would want to personally be in a landlord friendly state and just add that to my list of 'all things considered' when evaluating markets. 

Hope that helps some! 

@Nitanth Vangala

Hi Nitanth! 

I suppose it all depends what kind of transaction it is. I say that as (at least in my opinion- not a rule) it seems like it's easiest to work with the facts that are most relevant to the transaction. 

I would not take buyers seriously on a $5.5M listing that couldn't provide POF at the time their agent booked a showing. The flip side to that being it's not what I would say is necessary for a non-luxury transaction to be taken seriously- actually harmful in these cases at booking time it seems.

For more of a SFR 'average' American home (whatever the median for the area is) I would say that an address specific letter of preapproval (when submitting an offer only) is sufficient. I wouldn't ever go with a general letter of preapproval (again, just my opinion) over an address specific one as to not show all the buyer's 'cards on the table' at once when I offered this.

Again, this greatly varies transaction to transaction - I can say from experience that selling agricultural land on contract (seller financing) I would be asking to not only financial information but farming experience, equipment owned, etc. as well. Same goes for other non residential types of deals ,apart from commercial which is its own thing altogether in what constitutes a serious buyer at a certain tier.

In most residential transactions however, the seller should be content to make a sound decision based on a letter of preapproval (address specific if time warrants) from a lender that's summitted with an offer, cash offers submitted with POF or at minimum EMD enough to show promising good faith in closing the transaction out. Again, if it's an off market, cash deal, it's probably best to look the other way to buyer's willing to have little to no skin in the game with EMD.

DTI, credit, properties owned, etc isn't something that most sellers would be privy to it seems, but more the lender end of the deal.

And I might have misread this as you were the seller not knowing which offer to take seriously; 

If you're weeding out tire kickers and those posing as cash buyers- you've already been given the best answers in POF and property desires/location specific criteria, also helps if they say their name (don't withhold) if they are calling into you for the first time and you don't get any red flags they are posing as something they are not (popular lead generating app has this issue at times as 'cash buyers' are simply looking for deals to wholesale)

Hope that helps! 

@Andrew Bravo

Hi Andrew! 

I'm a little curious about the local county website. I know you said this was market value, but are you maybe confusing this with assessed value from the county property accessor?  

Maybe you're not and I'm just unclear on this, I just don't know of a county website that exists that's at a government level like this that offers value margins other than for property tax assessment purposes. 

If this is the case, the assessed value and the fair market value might be vastly different. I guess it sounds like maybe the context for one value is taxes and the other is what a buyer is maybe seeing upon as an agreeable price. 

If this isn't the case, it seems very odd to pay 50% over FMV for a property, even if the numbers do work out- and that means too I think that it's affordable? I say that as having the numbers work out otherwise doesn't add up either.

If other area duplexes are going for around $76K the % of monthly rental yield is going to be greatly different for you at $150K purchase by comparison- an mount to which trying to make up for in rent rates would outprice you on the high end from your competition. 

If this is a seller financed deal, this makes more sense as the terms are rather the seller's own and generally the agreed upon price can be higher than usual as a benefit for the seller in agreeing to offer seller financing, but not to the tune of 50% in any case that I can think of. 

This matters too as I'm not sure how you plan on financing the deal- what it appraises for in terms of your lenders POV is going to come into play. If you're using cash, this doesn't make sense to me either as I'm not sure why you would be so far above in purchase price point from FMV.

Like I said, it sounds like maybe this is assessed value for tax purposes vs Fair Market Value. I would be careful if this is the case too as (depending on your area tax rate) if this hasn't been assessed this year, FMV is 50% higher now, it's likely to have a reassessment coming soon and your property taxes could jump up proportionally.

In a nutshell, and unless I missing something (totally could be!), this doesn't make sense to me. I would at minimum find some other tools for evaluating FMV.

https://www.propstream.com/ (not saying it's 100% accurate, but maybe can help shed some light) 

Otherwise running some Zillow comps of recently sold in last 3-6 months 

Hope that helps! 

@Ryan Kelley

You bet! Happy to help = )

@Ryan Kelley

Hi Ryan! 

There are a few different ways that you can access forms to take a look at and get familiar with them. If you're a member of the National Association of Realtors, you should have a Zip form login that's State specific for your needs. 

Here, you can create 'mock' documents that in configurations can be set up to not manually upload into your brokerage's interface/software. In the left sidebar menu, if you hover over one of these documents, you can see a drop down menu appear where there's an option to not only preview, but 'print sample'. It helps sometimes to have a hard paper copy in front of you to look at and get familiar with. 

These can be downloaded after you've completed them, and then uploaded into whatever GUI/software your brokerage uses. Some forms should be brokerage wide in being available on their software/system, others recommend Digisign etc in conjunction with this. Personally, I prefer docusign and I pay for the premium version- ease of use and I don't need email reminders etc. 

For the most part if your contingencies are in place for an offer, and you've got the proper timing in place (response to offer, response to inspection, etc.), you should be good. I can only advise that you speak with someone local about this as it varies market to market in what is normal for wording. 

https://www.docusign.com/

https://www.zipformplus.com/

https://www.investopedia.com/f... (just a quick read that may be of use)

Hope that helps some! 

@Account Closed

Hi Mehul! 

The order of operations here seems to be what you're asking about. In most cases it's pretty much the same process- the only difference really being cash vs. funding as far as 'steps' go. 

1. Isolate an area of interest and begin researching it

     1.a) Unless self managing, start the process of looking for PM's       

2. Funding - either by means of loaned commercial funds or getting your numbers in line with personal cash reserves 

     2.a) Usually for larger portfolio acquisitions these numbers are verified with CPA that you likely already use

3. Work with a broker in the area (this is where streamlined funding pays off, as you need to know {and they need to know} which properties to show you that are obtainable for you and fit your needs best    

    3.a) They should have the clearest picture of what you have in mind with cap rate, location, rehab allowance, etc.  

If you have an area in mind, you know how much you can afford (preapproval, cash on hand, etc.) and what kind of ROI you want to see/goals are, it's much easier to meet with a broker who can help you isolate these deals.

In some cases agents can have lenders they work with or recommend and it's not a bad idea to talk to a few lenders and get the best rates/idea of what you qualify for from various sources. 

Hope that helps some! 

@Vania Nettleford

You bet = ) I know that (at least here in Indy) there a few banks where you don't need to do this. You can try setting one up at BMO Harris maybe if you have nearby or Chase. Either of those here at least work and worth a shot in trying them!