All Forum Posts by: Kristi Wolfe

@Patricia Steiner Thanks a lot. I didn’t know if a bidding war is standard practice or something that only the shady landlords do. We have just 1 property and haven’t ever had the barrage of interest until now. We have in the past advertised it too early or too late, and also did professional pictures recently…so I’ll chalk it up to learning, experience, and knowing how to do do it right now.

We just put our rental up on Zillow, and in the 48 hours that it has been for rent, I have received 32 inquiries and four applications. We have not even showing the place yet. I am now thinking that we could have increased the rent even more than we already did over the current tenants’ rent. Is unethical to screen tenants, narrow it down, and then tell those tenants that whoever Is willing to pay the highest rent can sign a lease?

@Phil Hardway. There are 2 Amazon distribution centers coming to some fairly depressed areas near me, and I was researching how this might affect those towns’ economies and housing markets. I found your post from 2 years ago...so what ended up happening with the situation? Did it increase property values/rents/demand like I would guess it would?

@Matt Ziegler Thanks! I am just trying to keep my eyes wide open and not be too trusting/naive while I’m learning. Thanks for the reply! I have spoken to another lender just to comparison shop, and their rates/terms were slightly more favorable not not by a landslide, so I’m glad to know the first lender is still competitive.

I'm a newbie in the "learning and assembling me team" stage, and I found a lender who had a loan that was structured for BRRRR deals. Back in early March (pre Covid), details were:

Minimum downpayment: 10% of the total of purchase price + rehab budget

HML interest only-rate for an unseasoned investor: 11.5%

conversion to 30-year fixed rate: 6.75% (or could buy down the rate), and I can pull out a maximum of 80% of the ARV.

BUT NOW.....as of today, the new terms are:

Minimum downpayment: **25%**** of the total of purchase price + rehab budget!!!!!!

HML interest only-rate for an unseasoned investor: 12% (only a 1/2 percent increase - understandable)

conversion to 30-year fixed rate: 7-8%, (varies, based on debt service ratio) and I can pull out a maximum of 75% of the ARV.

In March, it looked fabulous. Now it looks totally unappealing. I haven't been following the market since the spring - is this how it looks everywhere these days, or do I need to start from scratch and try to find a new lender at this point? I can come up with a 25% downpayment, but it'll be hard (have to sell stocks to get it), but the worst part is the 8% APR on the fixed rate 30 year loan...that seems ridiculous to me!

@Pete Z. I had a long talk with my husband about this, and while Section 8 is guaranteed rent payments on time every month in an uncertain economy, we just cannot support a system in which 1 family is paying $1200 for a meager 2 bedroom in need of updates and busting their humps to scrape do it, and their neighbor is living in a renovated home and using taxpayer money to pay for it. I cannot stomach encouraging that system, so we’ve decided not to go section 8 for this property. If we had a lower end place that was fetching average or below average rent, maybe, but this system is not one I will contribute to.

@Pete Z. Unreal. Incentivizing living off of taxpayer money. Nice.

We’re looking for a new tenant. The place is upgraded (Completely renovated in 2016, hardwood floor, granite countertops, stainless steel appliances, etc. Avg rent for a 2 br 2 bath in our area is $1550. We’re asking $1700, and have prospective tenants who have section 8 vouchers for 2 br housing for $1700+. Does this bother anyone? Imo, Taxpayer dollars are paying for your housing, you should not be living in something that costs more than average.

Thanks everyone- my lended did say it was on a “reimbursement schedule” which I didn’t understand. Just spoke to him, and as you may know - it means I pay out of pocket for the rehab, and receive reimbursement....and there’s my explanation- I only have to pay for 1 draw IF I can fund the construction with my own capital.

I'm a newbie, and trying to make sure I know every penny of the costs associated with my future BRRRR. My lender just told me that construction draws cost $200, and require an inspection- SOP, it seems, but he said I can draw as often as I like. So- what if I just pull it all out right away to minimize paying the fees? I'm sure there's a drawback to that- but what?