All Forum Posts by: Natalie Schanne

Daniel Philpot - You will probably be better off saving now and buying a house to house hack when you get your first job after school. You never know where you'll be living. I was living in San Francisco for college and got offered my first FT engineering job almost 2 hours away in Sacramento, CA. 12 months earlier I'd taken an internship in Charlotte, NC. A W2 is really important to getting a 80% (no pmi) mortgage. I'm not sure how you could buy something unless your parents / siblings are wealthy and want to tie their income to your house or lend you cash. I've seen some parents buy student housing - as in they own the house that 4-8 kids live in paying per bedroom rent. You could manage a house like that... Real estate costs about 10% to get out of, so it's better to buy when you're confident in where you are going to be living.

Brad Fausett - from my experience, if you pay with cash, you can only refinance the purchase price within the first 6-12 months. But after 6-12 months, if you've made improvements and you can show the market appreciated, you can get more than your purchase price. My situation: I bought a house for 255. I put 20k into it but created about 50k value over 30 days. I was owner occupying and renting rooms out. I tried to refi it 3 months later but the lender would only give me 80% of 255. I tried again about 8 months after purchase and got a 80% loan on $305k (the new appraised value). So I pulled out 40k more cash by waiting 6+ months. I'm not sure if you can or want to tie up your cash for that long. Check your lender for their current rules of 6 or 12 months before they will consider your added value / improvements.

@Pearce G. - I googled 1031's a couple weeks ago and came across Kay Properties (http://www.kpi1031.com/). They facilitate about $100M of 1031's a year in DSTs and TICs. I spoke with Jason, one of the lead guys, for about an hour. He helps accredited investors place as much money as they want. They have an ongoing portfolio of deals you can vet and opt into. You have NO CONTROL. One example he gave was of a gentleman selling a $5M office building and spreading his $1M into 5 different projects.

I have NOT done business with the company. I'm more interested in continuing to buy and renovate (value-add) with my 1031's. But if you are an accredited investor looking for a passive investment, consider giving them a call. The deals they offer are sponsored by private equity firms. They said they can close in 3-10 days, so you sell property A and the 1031 escrow account transfers the money to the DST deal of your choice very quickly.

@Donald D Michna - While it's definitely a fun milestone to say you've paid off all your school loans, if you have subsidized undergraduate loans at less than 5%, keep them and auto-pay the minimum. You can't get similarly inexpensive loans from anyone else. Use the cash you've saved to invest in deals yielding 6%+ return on investment. If you have any private or higher interest loans, it's your call. It's probably in your advantage to pay off anything with an interest rate of 6.5%+ as soon as you have spare cash in the bank, unless you know you have a near-term deal that will yield 7%+.

- Do you have enough reserves for renovating / repairing the rented side of the duplex if it goes vacant? Can you pay if the HVAC unit goes bad?

@Allende Hernandez - Additionally, the neighbor at 2520 Marshfield Preserve Way sold for $239,990 this time last year. Their house is 2930 SF with 4 BR 3.5 BA. I like their kitchen cabinets and granite colors better (but that's 100% personal preference). 

http://www.realtor.com/realestateandhomes-detail/2...

So you might be 15k too high at $255k. They were on the market for 60-70 days between listing and sale.

@Allende Hernandez - So, as everyone has said. Price drives traffic to see your place. If it's priced at market, none of the items I mention below matter. 

Personal comments from looking at your marketing / listing:

- Real or virtual staging of 1 bedroom, 1 bathroom, dining room, and living room would be nice.

- I don't care for your agent's choice of cover photo on your MLS listing (Realtor.com) - it's like 50% driveway. The straight on shot from google maps looks more attractive to me. Can you get a cheap drone shot from like 20 feet off the ground?

- Some of the room pictures look exactly the same. I'm not sure if it would be helpful to have a small label like Bedroom 1, Bedroom 2. The pictures show a lot of ceiling, so I don't have a great sense of how big the room is. They might as well all be 10x10's.

- Your agent's marketing materials need to emphasize "Freshly/Professionally renovated - move in ready." Anyone can see you bought it for $174k a few months ago. Your agent's 2007 comment makes it seem like everything is 10 years old but like new. What's brand new since you bought it?

- Your agent's marketing copy in MLS doesn't exhibit proper grammar & syntax. The errors are minor but abundant.

"HUGE PRICE REDUCTION! LOWEST PRICE PER SQUARE FEET IN THE AREA! PAY LESS FOR MUCH, MUCH MORE, READY TO MOVE IN! HURRY, IT WON'T LAST AT THIS PRICE! FULLY REMODELED HOME IN AN AMAZING COMMUNITY! VERY LOW HOA! LIKE NEW, BUILT IN 2007 WITH OVER 2900 SQ. FT. (among the largest in the neighborhood) ALSO ELIGIBLE FOR FHA FINANCING! SELLERS OFFER ONE YEAR HOME WARRANTY AND VERY MOTIVATED TO SELL!! 4 Bedrooms 2.5 Bathrooms home with a tandem 3 car garage. Kitchen features, granite countertops, new stainless steel appliances, 42 inch cabinets with crown molding. A huge master suite on the first floor with his & hers walk in closet a huge walk-in shower and garden tub. Excellent floor plan for entertaining with separate dining room and great rooms plus large eat-in space near the kitchen. A great home in fantastic neighborhood... and don't forget new Valencia Community College Campus is coming soon."

Good luck. Let us know how it turns out.

@Bryan Henry - The property management company's policies seem weird. As an owner, I would be ecstatic if I had a good tenant who wanted to guarantee that he wasn't going to give his 30 day notice during an off-peak season like Thanksgiving. Unless I needed the flexibility to sell whenever I felt like it.

Have you talked to the owner directly, ever? Can you get his cell from the property management? The county public records should have the owner's contact information / mailing address. You can linked in / facebook stalk him to try to send an email, or send a letter to his mailing address requesting a call to discuss a longer-term lease or purchase.

@Bryan Henry - How about you go to him and initially ask for a 2-3 year lease at/near what you're paying now? Then, as you're talking about that, ask casually what he'd consider selling the house for (or negotiating for a rent to purchase agreement). 

This might work best over coffee or lunch, if possible, or at the house after a friendly maintenance / checkup visit. 

Note - it's a good idea to go to the county public records and see what he paid for the house and what his mortgage was. Then calculate your numbers. If you're renting a $500k house for $2000/mo, you might have a sweeter deal than owning.

David Allen - let's say your mother asked you to sell her car for her. You post it for sale. You get 5 offers at full price within 24 hours. Some bidders start to offer you more. Is it unethical for you to wait a few days to see what the true market value is of your mother's asset (car) and to find the highest and best offer? (No, because you're working for your mother's best interests - fiduciary duty.) Or, by your logic, are you obligated to the first person who offered you your asking price?

Maurice Colbert - Sell the home to get the tax credit Robert Ellis mentioned (any profit is tax free) then invest the cash in your choice of diversified stocks (I like MO - Altria / Marlboro which pays a 4-5% dividend and has appreciated 10-15% each year over the past 5 years) using a low cost provider like Scottrade and its free dividend reinvestment program. Save up for the deposit you need to get the loan to build your dream home. Don't touch your money for vacations or other non-investments. Stocks are much more liquid than real estate, and on average earn 5-10% annually which trumps savings accounts. Stocks are subject to risk. If there's any chance living with your brother might not work out, I'd consider keeping and renting the house. But if you don't think you'll ever move back, it's a good time to sell. (Low interest rates with very real threat of rising). Good luck and let us know how it goes.