All Forum Posts by: Jeff Kobernus

That works as well. Each investor has different ways of doing it. Only thing you would prepare for is typically the REFI process is not quite as easy as advertised simply meaning you often hear people pulling 90% out ect in my experience on an investment property that is not possible.  Ion a rental the most you would get is 70% out so just keep that in mind.

Best of luck!

Banks don't typically like to give out more than 60% on multi families. 70% on primary residences to get the best interest rate and going up from there will increase your HELOC rate. I have a 3.99 rate on my primary house which has no mortgage and was only given 65% to obtain the best rate. Worth asking Joe Polizzi with RPM mortgage incredible lender and could shed some insight on the process.

I purchased a $344k duplex in Sacramento and spent $12k on renovations.  25% down + 12k = $98k.  Our monthly mortgage obligation all in is about $1700.  Plus property management and Gardner its about $2k.  We have both units rented at $1495 each.  We cash flow roughly $700 a month which would equate to 8.5% return or so.  Cash flow is not impossible in Ca but when there is a decent deal out there you have to have an offer out within a couple hours.  Not possible in the Bay Area in my opinion but the Sacramento region may be the fastest growing market anywhere.

The above evolution was based on $200k purchase price for each home that he was looking at.

Maybe try to find a fixer a negotiate a great price being a cash buyer.  Otherwise you would be better off financing a property with low interest rates.  Your return will be higher financing multiple properties than buying one property cash.  

I will give you a quick example of a friend who was purchasing recently.

He has roughly 400k cash and wanted to buy two properties cash.  The reality is these single family homes bring in $1600 monthly which equates to $38,400 annually.  After property taxes / repairs / insurance act it nets $28,400 which is a 7.1% return. (allotting a total of 4k repairs 4k property taxes 2 k insurance for both properties TOTAL)

THE SAME PROPERTY FINANCED at 20 % (because its single family) comes out to about $ 1,010 monthly a unit.  Which in turn translates to 24,240 obligation annually.

So $38,400 minus mortgage (property taxes insurance ec) 24,240 = 14,160 annually

Now subtract the repairs 4k (same as above cash purchase ) = 10,160

10,160 divided by 80 k invested = 12.7 return.  You would be better off buying 5 houses and almost doubling your return.  UNLESS you want one house paid off and the security of just having no mortgage.

I made a mistake doing a 15 year on one of my rentals.  The reality is you will have a little bit higher rate doing a 30 BUT you can always pay at a 15 year rate.  When market went down and oil went to $25  a barrel my unit went unrented for 3 months.  I ate 2,100 month being on a 15 year.  That was the time I wished I was on a 30 year paying $1400 or so while times weren't so good.  Take what your 15 year payment would be and pay it on a 30 and you'll have it paid off in 15 BUT if for some reason your vacant or a big repair comes you aren't tied to a higher mortgage.

I would absolutely do the ZILLOW premiere agent.  Myself and my partner (who is my father in law) do heavy marketing on ZILLOW.  We live in California where the market is incredible competitive and the spots on ZILLOW are sold out with a large waiting list.  The reality is you either earn and invest in your business or invest and then earn in your business.  The amount of quality leads that come from direct connections on ZILLOW are second to none.  Typically your buyer wants to view a house, they are qualified and usually they want to buy within the next 3-5 months max.  We get live connections and also tour requests.  Often times these buyers also have homes to sell. My experience with Facebook and every realtor I know out here has not been good.  Its cheap and great to keep your name and face out there but the reality is you get what you pay for.  Myself personally I would rather pay a premium for a quality lead than have to speak to 20 people to maybe get one buyer.  Zillow you will see quality come through.

$1,000 a month for a year is $12,000.  If you get one deal from Zillow at $500k you're even.  If you can close one deal every 3 months you will likely see a 4x return.  Can't beat that. Just my two cents

You would want to know what they rent for and what the additional costs are (HOA, Mella Roos tax act.).

I recently had a client neglect to purchase a property that would have had a 9% cash on cash return to purchase a higher priced property with less monthly income in a brand new community bringing 5% return because they wanted a new energy efficient house, less problems, new water heater AC ect verses making a higher profit and dealing with potential issues.  Its all up to the buyer/investor what kind of headaches/goals they have and want to deal with.

Good luck

Most likely the builder is offering a max of 2.5% of there base price of the home.  MANY TIMES the sales agent within the new build community will get an increased commission if the client does not have representation.  FI you are a master negotiator then go for it.  We have had clients back out of new builds last minute because the finished product was sub standard to what they advertised and we were able to get the deposit back.  I would make sure your careful and read the contract fully especially if your picking out your own finishing and its not standard inventory.

Things may be different but here in California if there is a dispute of EMD, the property cannot be sold until the dispute is settled.

In California we have to actually sign off and release contingencies verses an elapsed time making the EMD go hard. As long as there is a dispute over EMD seller cannot sell ( ask your agent.). As far as inspection fees those will not be refunded or paid for unless the seller "buys them from you" to give to the future buyer. This should be a pretty simple fix as this dispute WOULD GO TO THE BROKERS and they would settle. Since you have a very logical reason for terminating the contract (if all is true), I would suspect he would give the EMD back and move on and sell the property to someone else.

Hope this helps.