All Forum Posts by: Laura Williams

Cash out refinance for an investor co-op is REALLY tough. The only bank I know of that supposedly does this is United Nations Federal Credit Union. You'd also need to check with the co-op board to make sure they will actually allow you to cash out refinance. In all the co-ops I've owned in the board has to approve any mortgage or refinance that you want to do & most likely will want to pour over every little detail of your income and assets & give you a hard time. My friend got a regular investor co-op loan from Patrick Lavell at Liberty Home Funding with putting 30% down a couple years ago for a co-op that he bought to rent out in an investor friendly co-op. So you might give him a call too. As of a couple years ago he didn't offer any 'cash out' refinance options on investor co-ops but that could have changed.

Rustin Dowd Your insurance numbers look high to me for KC. I think you could get that down a bit. I use State Farm and the most I pay is about $30-60 a month on my SFH. Plus if you do certain improvements to the property they offer utility discounts. Also I would try to repeal your property tax ......not sure if you're on the Missouri side or Kansas where it's higher ..but I do know from experience on Missouri side you can appeal property tax based on what you paid (not what it's worth) which in your case is very little at less than 50K. You'd need to take photos and document stuff but it's worth it to squeeze out that extra Cashflow. If you did get your insurance & property tax cost down plus did a 30 year note instead of 15 then you should cash flow positive on this property plus have nice amount of equity.

Hi Stevan! Please be careful buying cheap houses in KC especially if you aren't local. Lots of unscrupulous people like to prey on out of town investors and sell them ghetto and it's always a bad ending. In addition many banks won't finance in bad areas either just FYI.

I've found those typical numbers people give for houses ...maintenance/cap-ex/vacancy etc never hold up as every house & area is so different. If you have 10 houses there is probably an average but for one or 2 houses there isn't. The things I would recommend thinking about is 1) how popular of an area is your rental in. Is it going to rent the first week it's on the market or will it take 6 months to get rented 2) age of the home. My older houses need a lot more attention (generally) than the newer ones 3) what shape is the mechanicals in ...roof, HVAC, water heater etc. ...it's not hard to figure out on some things when you'll have to replace something. 4) are you doing preventative maintenance? Pre-treating for termites, making sure the soil is sloped away from the foundation with downspouts, that pipes are wrapped to keep from freezing etc 5) how involved are you going to be with maintenance ...will you oversee all the details?  or will you pm it out which could be letting the fox watch over the hen house & getting charged whatever the PM feels like charging you for a repair. 5) are you going to buy with equity in when you buy? Most likely a fixer upper that you rehab verses turnkey. 6) Appreciation -not all areas are equal. Is the area going up or down? 

I have mixed feelings about condos. They are nice and easy to self manage because the HOA takes care of the outside so all you have to do is paint inside and appliances plus I like the idea of having amenities. But they can also be a HUGE pain. First thing if you're planning on this place being an investment is to check the number of owner occupants compared to renters. With condos there can't be more than a certain number of renters before people won't be able to get mortgages to buy in the building anymore. It's some kind of Fannie Mae or FHA rule. I think the number is 50%? So once the condo has more than 50% renters or its approaching 50% the HOA will usually step in and stop allowing people to rent their places out or do something to get investors out ....either charge sublet fees or put people on waiting list to rent etc. If they don't do this then other owners won't be able to sell their places cause buyers wont be able to get loans. If the building is high owner occupant you're probably ok and if it's approaching 50% investors/renters then I wouldn't buy it. My experience with HOA boards is that people who got picked last in school and are on a major power trips just love to get on these HOAs boards. If they took an IQ test of all the owners the ones that scored the lowest you'll also find there too. I've seen them do and waist all kinds of money on stupid things for the building and they have the power to make you pay for it by assessment or increase in HOA fee & they love to also make rules that are totally asinine. That being said I have made a lot of money on them and as far as getting equity out I would think you could live there for a few months and claim it as your personal resident and then get a heloc. Or you can put it in an LLC and get a business line of credit against the property that you can use to buy more property.

Thanks @Trista Fenner you can buy in Home Depot. Here is the link for the floor I bought. They look really nice in person but still waiting to see how durable they are & how well they wear. 

http://m.homedepot.com/p/TrafficMASTER-Ceramica-12-in-x-24-in-Coastal-Grey-Vinyl-Tile-Flooring-29-sq-ft-case-24716C/202191244

I have a duplex in Kansas City that is insured through State Farm and the premium is about $1200 for the year. $200/month seems high.

I have not met or used but I heard Julie Anderson is the best in Kansas City. She gives talks at the local REI meetings and a couple of local property managers have told me they use her.

@Guevara M. I think a lot of what can make a kitchen look good is picking out the right colors and design for the counter top that works with the space. Here's a kitchen I recently did for really cheap. I used a laminate countertop in the marble design & repainted the old cabinets white and added new handles ....used a groutable vinyl tile floor (cheap) and put in stainless appliances and new kitchen faucet. Here's the before and after photos. The before photos was also a laminate countertop but the color was awful brown.

@Sandro Hagenbuch

I just looked it up online and looks like you can receive up to 14K a person now without the person giving paying a gift tax. So between you and your wife that would be 28K. Here's the link on the IRS website that you might find helpful https://www.irs.gov/businesses/small-businesses-se...

Oh and was going to also say when I've gotten loans before they always asked to see the last 3 months of bank statements. So you may want to wait until you have the money in your account for 3 months on 3 different months bank statements before applying for a loan otherwise you'll have to explain where the money came from. And you'll want to show some cash reserves in your account as well in addition to the down payment. At least that's what the banks have asked of me in the past. I almost didn't close on a loan before because the bank didn't think I had enough money left over in my checking account after paying the down payment.