All Forum Posts by: Louis Leone

@Steven N. 

Why do you think there are no rentals in that area?  Definitely talk to an agent or someone who understands rental supply and demand in the area.  It seems you still need some key information before making a decision.

@Chester Transo 

I appreciate @Victor Menasce 's approach and look forward to his response to your questions.  

Regarding the premise of the discussion in protecting oneself in a rising interest rate environment, it may not be as straightforward as:

rising interest rates = higher cap rates = weaker property values

A couple of reasons for this would be that the spreads between the 10 year treasury yield and current cap rates are significantly higher than the historical average (500+ basis points) vs. an average of 300 basis over the last 20 years.  That gap provides an extra buffer that can help maintain property values before they start getting effected.

In addition, although most people do think interest rates are going to rise, they also expect economic and employment conditions to improve (real GDP growth).  This helps with rent growth, occupancy, etc (also helping to buffer).

The reasons these buffers matter is that they delay the weakening of property values and buy time. If the cap rate changes happen later down the line, you're overall IRR will be higher in the end. Of course, if cap rates move directly in line with interest rates and you have a short term horizon, it's going to hurt. Considering the other variables, it doesn't seem that is likely to happen though, but as you say, nobody knows!

It may come down to the appraiser.  Definitely be there (and if it's your relative buying the house, maybe they can be there too).  If you both clarify everything to him, he/she may be accommodating.

Good luck.

I think your answer is well covered above.  Welcome to the site!

@Isaac Schulman

I would definitely work with an agent starting out due to your experience level.  The tough part is some of the best agents may not work with you unless they perceive you're serious.  If you want to buy a property, try to get as specific as you can about what it is you want and your timeframe.  For example, I want to buy a 1 bedroom condo in Brooklyn Heights for under $400K and I want to close on it by the end of November.  Additionally, I have financing setup to close on that price point.

Good luck.

I think the biggest issue right now is that it is very vague to the renter as to where things stand since mixed messages have been sent.  Can the dog come just for the day?  Can the daughter leave him outside when she visits?  Maybe think through what you would accept to have the dog "visit".  Maybe an additional security deposit and/or rent.  Then sit down with them and have them make the decision.  

Of course, you can enforce your original lease, but then you would need to be prepared to go the next step in enforcing it.  If you do have a penalty, send them the penalty notice and even if you eventually waive it in the beginning, make it clear that you are not conceding that the dog was permitted.  Otherwise you a setting a precedence that can come back and haunt you.  

Good luck (full disclosure - I do like dogs).

@Marisa Dickson 

I would stay away from this one.  

Look at the national REIA website and see if there is a REIA near you. Most of them are really good and you can meet others who are doing what you are thinking of doing yourself. They can be great mentors.

And follow @Karen Margrave 's advice.  Learn as much as you can on BP and from other sources.  

Good luck!

Very nice!

@Mohit Madaan 

Deep inside your instinct is guiding you and I think that really is the point.  The fact that you don't think you should do the deal is probably a culmination of a lot of little things, not the least being the infidelity.  Real estate is especially prone to gray areas and is an industry that can tempt your integrity quite easily.  Best to partner with someone with a strong character.

@James Jones 

Welcome to the site.  

You may get a better feel for your approach once you identify a property you would consider purchasing with the 40K.  This way you can run the numbers and see what your net gain would be in getting the refi considering expenses and increase in payment.