All Forum Posts by: Jay Hurst

Hi All,

I purchased an investment property in the middle of last year and to this point have been using 0.75*lease value in my DTI calculation. I have just received a draft of my tax return with the schedule E. I'm wondering how rental income is now calculated. I have heard the value from the schedule E is used (rather than 75% of lease). Can someone explain how the calculation works?

Thank you.

Deal :

Duplex Home
2 beds / unit
2 baths / unit
3,000 sqft
Asking 300k

60k down

Est rent/yr - 31,200

5% Vacancy

20% Op Expense

Mortgage 240k assuming 7%

Results: 

CF - 6,600

Cocr - 11%

Cap - 8%

Looking at this for a buy and hold and trying to determine if I am analyzing this right

 My thought behind it was to simply get rid of debt and take on less risk 

Hey everyone thanks for the feedback, I did forget to mention I plan on buying more properties (which is why I’d like to reduce my debt) let me know if that changes any answers, but sounds like paying off the 88k 6.4% interest is the way to go 

I am new to the DFW RE market. I am looking to invest in some properties in DFW but did not realize how many houses had foundations issues here due to the clay soils. 

Would love to connect with anyone that has a lot of experience with how to navigate these foundation issues and how you succesfully invest in DFW real estate depsite this issue 

Any best practices around buying down points?

I'm considering a cash out refi. 70% LTV on a property that will likely appraise around $450K. I can buy down the interest rate. It would cost me $13,835 to get down to 6%, which would give the best value over the course of the loan.

Why wouldn’t I buy down all the way to a 6% interest rate? If not down to 6%, where would you buy down to?

Thanks! It does help. 

My husbands aunt is selling it to us at a discount but is unable to do any sort of financing as she needs to sell it and get the funds. It is in livable condition but needs cosmetic repairs.

We are currently paying $1600 on a $220k mortgage and we want to sell and move to this home, but we would only net about $7-10k on the sale of our home. 

The only reason we don't qualify for traditional lending is because I took some time off to help my terminally ill father, and my husband has been in a commission-based role for less than a year (the lender said you need 2 years of history for that). This is why we are seeking a private lender as we would refinance after 1-2 years once we have proof of steady job history.

Don't buy a condo in Dallas as an investment property.

HOA dues will kill the deal. Maybe it is ok if it is for you to live there and enjoy the amenities, but no need for you to pay high dues for a tenant to use the pool.

Many condos don't qualify for FHA financing in Dallas. Too many rentals, too much deferred maintenance, no real budgets, not enough money in reserves.

You can still get CapEx in condos....these are called "special assessments" . The letter goes like this: By the way we have underfunded our reserves, so we need $5000 from each condo owner by July 1st, in order to replace the roofs....(or paint, or resurface the parking lot, or replace the boiler, or fix the foundations).

You can potentially get approved for a loan out of college without work history.  You have a great credit score.  Typically lender will want to see first paycheck before you close.

Maybe rent a room in a house hack (we have one coming up in Little Elm if you can make the drive) save some more money and buy a house.  This one might need a house manager in a few months so some chance to live cheaper in exchange for managing the house.  You save money, you get experience, and then you buy your own in a year.

 Here you go