All Forum Posts by: Jay E.

Appreciate it.. will definitely be looking around some more. The 12k to buy down points is definitely a little ridiculous. 

Credit is over 735. I just switched jobs  about a month ago so I believe that to be a reason? My W2 prior to the change was 230k average but I am 100% commission based. Most lenders are unable to do a cash out at this time because the job change is too recent they say ( & I have no way to prove my new income yet.)

 I wish that was the case but no.. This is without escrow/taxes. It does include about 12k in points. 

Yes we would put it to good use..The money would go towards acquiring another rental. Now that I've been looking into it more, I see that some people prefer a HELOC instead of cash out refinance. I have no experience with HELOC's but I now wonder if a HELOC may be a better option. Considering we don't yet have the next property in mind, but would like to access the equity in the rental.

I'm looking to refinance a primary home I purchased a few years ago but is now a rental. My current rate is 3.88%, I owe about $240k on it, with a property value of around $400k. I can do a cash out refinance to 2.88% for 30 years and pull out $35 to $40k after closing costs and points. This would also reduce my mortgage monthly payment by about $175 give or take. 

With closing costs costing around $18k (but being financed into the new loan), would this be worth it? I'd be reducing my monthly payment, and getting back about 40k, so is this a no brainer, or am I overthinking it? 

I would break even after about 8 or 9 years.We never know the future, but my plan is to keep the property much longer than that. Paying about 4 points or more is what drastically increases the closing costs, and I'm looking to pull out the cash to have available for purchasing another property in 2021.

Less than 2 weeks ago I posted a unit for rent in a class A/B highly desirable area in a HCOL city. I've gotten some traffic, not a ton, with maybe 8 messages and 4 showings. After the first week when there wasn't much activity, I dropped the price by a hundred & I now get about 1 inquiry per day to tour the place.

Everyone that has inquired or toured appear to be highly qualified as far as income at least, making about mid six figures (young families or attorneys at large law firms, etc). All have seemed like great people after meeting them and have that air of professionalism to them if that makes sense. 

However, no one has actually moved forward with an application & this worries me. How long have you found it usually takes to rent a unit out?

I worry maybe my property isn't up to par for this income level. While the place has been updated, other areas show their age, such as the older flooring and stairs, popcorn ceiling on the 2nd floor, etc.. It's too late now for me to change this stuff seeing as I want this rented before August. Obviously wish I could go back in time and do these. I don't even know if these things are a no go for prospective tenants, but I think about What I would look for if I was in their shoes & was looking. 

Am I right to be worried at this stage or does it sound like I'm on the right track with this amount of traffic?

That’s good insight, and something a calculator can’t capture. (Location, tenant quality, etc) It’s such a difficult decision either way. Covid-19 definitely throws a wrench into it when I ask myself:  If the housing market ends up crashing, might it be better to sell right now while supply is relatively low?  Worst case scenario, what if I get a tenant that I’m unable to evict  due to Covid?

No one knows..but I may rent for the easy step into landlord experience like you mentioned. 

Good point! That’s also exactly one of the reasons we’re moving in the 1st place. 

I live in a townhouse in a great, central location in Miami that I purchased about 3 years ago for 317k, with $245k remaining. It's a two story, 3bed/3bath that's within walking or biking distance from many restaurants and shops in Coral Gables. The neighborhood is nice with remodeled SFH's being sold for $600-$799k. We're moving to a new home, and debating whether we should hold/rent this one, or sell it.

Our mortgage expenses are $2110/month which includes PITI and HOA dues of $225/month. The property has many new (less than 3 years old) larger expenses such as new roof, tankless water heater, AC, washer/dryer, dishwasher, range oven, and 2 new toilets). We can realistically rent it for about 2,400/month, or sell it for at least 370k.

If we rent it at $2,400, we'd cash flow $290. However, if you consider 10% for vacancy and 5% maintenance/assessments, I'm negative about $300 cash flow/year, with the benefit of holding it being in the $6,300 in mortgage paydown assuming 0% appreciation. We can easily weather maintenance costs or vacancy for several months if we had to.

If we sell, we would have about $90k in our pockets assuming 10% closing costs that we could use towards looking for another SFH that DOES cash flow. Not sure if it matters, but since some people factor taxes into the equation, my wife and I are reasonably confident in our job security, and are in the 32% tax bracket this year.

Would you rent or sell in this scenario?