All Forum Posts by: Patsy Waldron

@Brent Coombs

What I am seeing in loan terms is that, for investment properties, lenders lend on 75% of appraised value or purchase price, WHICHEVER IS LOWER- which means that the "low/no down payment because of built-in equity" method won't fly.... Any tips on lenders who do go by 75% of appraised value? Or should we buy now and then refinance later, pulling out 75% of appraised value?

I am under contract for a 4plex that also needs updates in the electrical work. I negotiated the price down $6,000 to cover the price of new panels and replacing some outlets. Definitely get a quote for the work to be done and negotiate either repairs by seller prior to purchase or a credit off purchase price.

Not sure where you are in the process or if that is a possibility, but the preferable way of dealing with this, from your perspective, is for the current owner to get the tenant out before you take possession of the property. I know some people whose purchase contracts specify that they want the property empty of all tenants at closing.

Nice job!!!!! Here's hoping it sells fast and for the price that you want!!

I have never rehabbed, so I don't really have anything to contribute to your question, but...

WOW!!! I love what you did with the house!!! Love all the light and modern feel.

It Is interesting that you take it as a given that home prices will fall as interest rates rise. I am not so sure there will be the direct effect that you assume, because many other things change along with interest rates. More to the point, though- except in a few markets (the usual suspects, New York and California, as well as Texas, Boston, Phoenix- the big metropolitan areas generally), even with the economic recovery home prices did not jump all that much. There is not a whole lot of room for the prices to fall when interest rates rise, so buyer demand for homes may not change much around the country. It may also not rise all that much (assuming your premise is correct, that a rise in interest rates leads to falling home prices) because wages need to rise for people to jump into homeownership. Bottom line- those who are qualified to buy and who would buy anyway, will buy but smaller houses.

Your question was about rents (which is directly related to the level of homeownership). Truth is, unless wages rise significantly, rents can only rise so much before plateauing. So it is possible to likely that rents will rise in the short term because more people continue to rent instead of buying, resulting in lower vacancies; but they can only rise so much. 

What kind of banks have you approached? (National, regional, local, community?) The bigger banks, in my experience, have minimum loan amounts than local ones- $45,000 and $60,000 are what I have encountered. On the other hand, a local bank where I live makes loans as low as $25,000. 

How much do you pay for a list? And how often do you get a new one? Is it updated often enough that you would need to buy a new list every few months?

@David Dey

Very well put. Approaching friends and family is a delicate enterprise which should not be undertaken lightly. More than just money, relationships are at stake- families have been ripped apart because of money. Especially hard-earned money that others were counting on to pay bills, support them in their old age, etc. 

Personally, I would only borrow money from relatives and friends if I was 150% sure of the deal. 

I know people who have used transactional funding to wholesale properties. If you can find a lender to front that money, it shouldn't be a problem.