All Forum Posts by: Jaysen Medhurst

@Jason Hodge, looks like you may have a winner here. Few things to nail down/clear up.

Get a real estimate from an actual agent using good comps. Zestimates are notoriously terrible.

In terms of your expenses: 

• Insurance is probably high, talk to insurance agent for a better number.
• Vacancy might be a bit high
• What about lawn care/snow removal, trash service, water, common electric.
• Nothing's maintenance free, not even brick

My real concern is the neighborhood. At that purchase price point and considering this is above the 2% rule, I expect this is a C-class or even D-class property, right? Is that really how you want to start your REI career? There will be headache upon headache. Your repair costs will be higher than you expect, because they don't take care of the property.

Also, I don't see any budget for improvements. "Basic improvements" won't increase the value $20+k. You probably won't be able to refi for at least a year or longer (it's called seasoning) and the 1st thing a bank's going to look at is what you paid.

I'm a bit skeptical based on what you have now. Lastly (I seem to be writing this in every other post), be careful with duplexes in general. They are great for house hacks, but hard as pure investments. Because you can only spread the expenses across 2 units. Having a lawn cut costs about the same whether there are 2 or 4 apartments on the property.

See how the market is in that area. How long do properties stay on the market? If houses sell in that area, why not? Hi-level numbers look good. Any buyer will have to get flood insurance to get a loan, so shouldn't be a big deal

Hey, Allan 

It depends on the bank. Some have a "seasoning period" of 6-12 months, where they won't refi based on an after-repair appraisal. Even if you paid cash.

You should start with local/regional banks. They are more likely to keep mortgages on their own books (as opposed to selling to Fannie/Freddy) and since they don't have to conform to those rule have more flexibility.

Look to pull out 75-80% of the final appraisal. Might need to keep more equity to keep the bank happy.

Plus, starting a relationship with a good local/regional bank will really pay off in the long run. They can (and want) to do things that the big banks don't.

Hey Ashley, 

You should look into an FHA loan, for sure. Depending on where you are USDA also does similar loans.

Secondly, is the problem bad credit or no credit. No credit can be attacked quickly with secured credit cards, store cards and the like. Use them for purchases and pay off the balances each month. Be diligent.

Bad credit is tougher and requires more work. Get your credit report (the actual report, not just the scores) and make sure nothing is incorrect. Then attack anything outstanding. 

It takes time, but you'll get there.

Jeff, what are the terms? Devil's in the details.

Pay off the HELOC and you can use that equity again to buy another investment.

Good job, @Dave Crussel! What did you do for financing?

So, you're using the private money to buy the property and then doing a traditional refi? You're not putting any money in?

Wow, @Arianne L., great work!

Andy, is this wholesale deal?

Ha! I love it @Marcel Duarte, you have the conspiratorial leanings of a man 3X your age.

The reason that housing costs continue to rise faster than wage growth/inflation/GDP is simple supply and demand. Population growth (natural and immigration) is out stripping the increase in housing stock. Add to that population is moving out of rural/suburban areas and into cites (where there is less available land at an already higher price and more building regulations) and you have a case of simple economics.

That gets compounded yet again in dense/desirable cites (I live in Manhattan) where investment/ego purchases of luxury real estate displace other residents, push them to other neighborhoods, where they drive up prices. 

I don't buy the low down payment/easy mortgage explanation. Wall St. doesn't make the same mistake twice this soon (there a whole bunch of new mistakes to make!)

Where did you get the 20% of GDP number? Existing home sales are not factored into GDP.

Fascinating discussion, thanks for getting it started.