All Forum Posts by: Patrick Torres

@Caleb Haynes

On the two last properties I bought I was the only bidder so I got good deals. It’s difficult mentally to break down that wall but it is absolutely better to spend a lot of resources looking for properties that only you are bidding on than it is to go for others that tons of others also have eyes on.

@Curtis Sleme

Could you start off with a new construction? Possibly, but that does not necessarily mean it's the best way to go. If you have never owned any real estate, have never gone through the process of obtaining a mortgage, nor overseen a project of a similar scope then you might be trying to do too much too quickly. If your credit situation has improved I would start with getting preapproved with a local credit union for a mortgage. Your best bet might be to find a 2-4 unit that needs some work that you can move into and get some experience that way. If you are still working on the credit, consider wholesaling or flipping to gain some experience. Consider joining the local REI Facebook groups and start attending meetups, wish you luck.

@Gilbert Vigil

That is easier to sell on your own. The title company will handle ensuring your REC is paid off and the paperwork is filed appropriately. You would still need to fill out the new purchase and sales agreement with your buyer and deliver that to the title company. I’ll message you the contact for a great escrow officer in town that can assist.

@Gilbert Vigil

If I am understanding you correctly it sounds like you want to do a wrap-around loan. Even if you don’t hire an agent you may want to use an attorney to help you with the purchase and sales agreement / contract. It is my understanding that not all title companies in Albuquerque will handle the closing for these types of deals so you may want to look into that as well. You also need to review your REC carefully and make sure it would allow you to do this type of deal. If there is no provision stating you can’t pay off your REC early then you should just be able to sell it straight up without having to do a wrap-around.

@Nathan G.

The host did give me a refund after I showed him a screenshot of his listing which said it had heat. It was just disappointing that they first looked for a way not to issue the refund instead of taking responsibility and making it right.

@Nathan G.

Okay I’ll share my recent horror story with Airbnb. I booked last minute and admittedly was just trying to find a basic place to spend the night. Up until this stay I had overall good experiences with Airbnb. I recently booked a cheap stay for one night while staying in Texas during the big freeze. It was a studio rental in a small complex that had several units. The unit had a lock box so I had to manually turn the dial to get in. After several minutes of trying to enter the code I returned to my vehicle to let my fingers thaw. I contacted the host and he apologizes and informs me he gave me the wrong code, no problem I return to the unit and am able to gain entry. As I am looking around for the thermostat I come to the realization that there isn’t one. I contact the host, he informs me there should be a space heater in the room somewhere. After scouring every space large enough to house a heater, I inform the host that his unit does not have one. He apologizes and informs me he will notify the owner. It’s a small unit so I figure I can turn the hot water on in the shower and that will warm the place up some, naturally the shower had no water pressure. I notified the host and he apologized and said the pipes must have frozen, but he was going to let the owner know. I left shortly afterwards and informed him I would need a refund because the unit had no heater. I submitted the refund request the next day and the host informed me he would not refund me because the unit was not advertised as having a heat.... he was wrong, but even if he had been right, it’s concerning that someone would be okay renting a unit in freezing temps without heat. No more Generation Z hosts for me who clearly don’t own the properties they are hosting.

@Kirsten Marino

I could be incorrect Kristen, but I was under the impression that the city can only raise your taxes by a fixed percentage each year regardless of its market value. The exception to that would be if you did something that allowed them to reassess at its current value like transferring it to an llc. If you own small multis or houses then $1000 - $1200 per property would be a double digit increase which again I don’t believe they can do. You should certainly consider contesting like @Jens Nielsen mentioned or consulting an attorney. If someone reads this and I’m incorrect about there being a cap on how much they can raise the assessment in a year let me know please.

@Kevin Romines @Katherine Blazer

Thank you for the responses. The other lenders I have worked with take into consideration the rental income similarly to how you noted Kevin. It’s unfortunate that the one I want to use because of their advantageous terms does not.

I appreciate any lenders taking the time to read and respond to my post. I work with multiple local banks who underwrite differently, please consider the specific set of facts that I provide for this hypothetical. I’m looking for information regarding how and underwriter would view these circumstances most favorably.

Hypothetically say I have 100k in cash, a 50k HELOC on my primary residence, & 50k that can borrowed from a 401k. I am going to finance the purchase and rehab of a fourplex that will cost 120k. The bank I want to work with (because they offer the highest LTV on the cash out refi) will not count the income from this property nor from another fourplex that I recently completed because we have owned them for less than 2 years. Because they won't count the income on these two properties, my debt to income ratio might look high. I've read that using my 401k loan will not increase my DTI ratio, but it will lower my assets. If I use my HELOC I believe it will increase my DTI, but I'll have more cash and assets to show the bank. If use too much cash that might worry the underwriter. Do they consider that the cash out refi money will be used to consolidate that debit? Any ideas on the best way to utilize these resources in order to have the highest chance of qualifying with this lender?

@Glen Holmen

Congrats on the opportunity to purchase what could end up being a great deal. Reading through your question it looks like two key pieces of information are still unknowns to you because of the uniqueness of the property. In order to understand whether it's a deal or not you would really need to dial in on the market value of the property and what it would rent for. Without those two pieces of information it's hard to understand what the ROI would be. Talk to realtors you know, do your best to come up with those, and then plug everything you have into the BP calculator. If your cash on cash return is 8% or higher, or the table at the bottom tells you would be starting off with a large chunk of equity, then it's probably something to consider. Good luck