All Forum Posts by: Katharine Chartrand

You have to start researching the opportunities in your area and running the numbers. And he opportunities and the markets are local. So you have to research your market.

Track it in a spreadsheet like a model stock portfolio.  See how you do with different strategies and scenarios.  Is your investment strategy sustainable, after you do one deal where are the resources to do the next?  What does success look like... to you.

Try putting very low offers on deals, just so that you have a right to find out how things turned out.  Figure out the best way to track rents in your area.

I am not sure why you would borrow but leave equity in the house. If your business is fix and flip, I am going to have to assume you are cash limited.

So you either want to sell and get the cash out of this house or refinance and get the maximum cash out.

Each loan you get requires closing costs and time. Even if you aren't going to borrow as much as you possibly can against all your properties, you want consolidate your financing in the fewest number of properties.

In my experience, refinancing only makes sense if you can borrow against the ARV rather than the purchase price plus the renovation cost. In other words, instead of taking less than you can, absolutely maximize what you borrow or don't do it.

Some lenders will let you do this. It's easier to find a lender that will do this if it is in your personal name and you have held the property for at least a year.

>KNC<

is it an MLS listed, bank owned property, or is it an actual real foreclosure auction.

in my experience, if it is a straight forward good deal, the price it sells for will be more than you want to pay. you need to be read for that, and ready to walk away if (when) the bidding goes above your max price.

the deals occur when there are some risks or issues that other people don't want to take on... is it occupied, are there major repairs required, are there title issues? if it is an MLS listed REO, then read the purchase agreement carefully.

You can make money when there are issues, but you have to do your homework. and evaluating whether it is a good deal requires more information.

I find it is very hard to make good decisions when you mix up your personal plans and goals with your business goals. The house doesn't make sense as an investment, so you are trying to make it add up by including personal goals values.

It's hard enough to make good business decision, but when you bring in personal stuff, you're almost guaranteed to jump off the rails.

welcome.

I don't see that the escrow money is non-refundable but I guess it is not explicitly refundable.

If you are a retail buyer, you want to be able to perform a full inspection, not just termites, etc, and you want to be able to get out of the agreement with your ernest money if the seller declines to remedy any significant issues.

That said, it has been a long time since I bought a house and the purchase agreement was contingent on an inspection. I buy distressed properties in distressed condition as is for cheap. Whether this contract makes sense depends on what you are doing.

Depending on what the money is for, you can take the opposite approach and try to maximize your contribution to a 401K until you have enough money to use the 401k funds to invest in real estate.

If you have 401K's you can roll over from previous employers, you can get to critical mass more quickly.

If you don't need to live on the money, then you are better off contributing pre-tax to a solo 401K (you get more money to invest) and then delaying paying taxes for a while.

Admittedly, if you are doing rentals, its passive income and you don't face the 35% ordinary income tax that sent me scrambling.

You can read up on solo 401K's at my favorite solo 401K consultant, mysolo401k.com and on this site.

No one is going to lend money to someone who makes 15K per year. Your income proves you are exceptionally frugal, but there is no way to cover debt service on that salary any way you slice it. So you will have to find a way to represent your rental income as part of your income.

There are many tests before a traditional lender will consider self-employment income. But one of them is being in business in two years, and I think you meet that test.

Once borrowing becomes part of the strategy, then how you structure your company and represent your financials to obtain loans becomes part of your borrowing strategy.

Yesterday I learned that the loan product with substantively the best terms won't work if it is held by my company. So next week, that property will be deeded in my name. Banks are highly constrained in what they can do, but you are not.

That said, I hardly need to explain this to someone so young who has built a business as you have. Obviously, you figure things out. But I hope by talking it through you are finding your solution.

My understanding is that test of primary residence is your intentions. If Massachusetts is your home, and you intend to have your primary residence in Massachusetts, that makes perfect sense to me.

I imagine there are a lot of people who maintain a primary residence in Massachusetts and go away to school.

And here are some government loans that allow you to buy a multi-plex, rent out the units you are not living in and treat it as a primary residence. If not FHA, the federal loan program that allows that does exist.

My understanding is as follows:

1. you didn't need to get both title insurance policies the first time, if the bank got title insurance that will effectively protect you.
2. when the house gets deeded to a new entity, all previous title insurance gets wiped out.
3. if you weren't planning on deeding it, the title insurance you got for yourself the first time should remain in place.
4. owning a property without current title insurance is never ever advisable. I hate buying title insurance. I've asked lawyers, title companies and on this forum whether I can get away without title insurance. The answer has always been no.
5. if you go back to the same title company, they will prorate the cost of the NEW title insurance. they won't refund the previous insurance but there should be some savings on the new policy. haven't tried this, interested in what you get.