All Forum Posts by: Tamara Deering

@Kim Snyder

Typically if this is an investment property a HELOC isn't available. You may be able to get a cash out refi through a hard money lender but probably not through a conventional lender. The trash out costs will vary depending on how good the junk is. You can find charities that will do the work for less than private companies because it's part of their back to work initiatives. As for the finish work, again it depends on if you are talking finish carpentry or painting, what level of finish you want, etc.

I don't want to be mean or rain on your parade but I'm hoping these are hypothetical questions because if you purchased a property before you answered these questions you are in for a bumpy ride. These questions especially about the rehab work should have been answered before you purchased the house because they are key to determining how much you should pay. You can try and find a JV but you may be better off selling the project outright and starting over with a partner. You might also think about doing the work yourself as you can afford it because that is the main luxury that paying cash for a property affords you.

Good luck.

The best place to start is with the applicable fire code in your area, that will give you the requirements for egress from a sleeping area.  Typically the window will need to be a certain size and a certain distance from the floor.  Note, it is size of the window when opened that matters, in a typical single hung window the opening is only 1/2 the size of the window itself.  

Since you are talking about a bedroom you may require a window well which requires additional design to ensure that a person can get out of the well and the well doesn't fill with water.

@John Bell
Yes, in the scenario I indicated if you were to go over the repair amount it would come out of your pocket.  However, in my company at least, we review your construction budget with construction inspector before we write the loan. If your estimate seems to low or conversely too high we go over it with you to ensure that you are on the right track.

Looks good on paper.  Did you include some vacancy in your expenses?

You can challenge an appraisal but it probably won't work. The appraiser reviews the properties that have sold in the area and selects the most comparable based on condition (and yes cosmetics do count). When I'm preparing a market analysis or BPO I have two buckets of properties, As Is and As Repaired. The as is properties are what I would compare the home against so if you are purchasing in an area with a lot of fix and flips chances are there are a significant number of properties that are in similar condition to your girlfriend's place that sold for considerably less than ARV.

When you said the home next door sold for 180k and was comparable in every way, was it really or did it have newer systems and updated cosmetic improvements?

If you want a higher appraisal you will probably need to hire a new appraiser and submit that appraisal to the bank.

Many title companies will not do a double close.  You may need table funding or bridge funding to get the deal done.  What you are asking the title company to do is close on the first purchase without funding then close the second deal which will payoff the seller in property deal one and you in property deal two.  This is also called a simultaneous close.  

Check the zoning, if a duplex is allowed you are okay.  If not you will need to find out about requesting a zoning variance or a change to the zoning laws.  Depending on how complex and convoluted that process is in Pittsburg it may be a red flag.  If the price was right and there are other multifamily units in the vicinity it should probably be doable otherwise you may want to walk away.

San Antonio is a huge market that is incredibly diverse.  On average there are between 4 and 5 months of inventory available.  We have an increasing number of properties going directly to auction or using ibuyer services so that may account for some of it.  

So here is a thought, if the drawback is that you are going to build the home yourself, why don't you talk to your boss about being the contractor of record?  They presumably have their contractor's license  and can pull the permits for you.  You could even pay them a small management fee for the privilege.  This fee would likely be less than the origination fee for a construction loan. Private/hard money loans are also a legitimate if expensive option.

I heard about this strategy on a Bigger Pockets podcast, it was a reference to another episode and I didn't hear the original episode.  I think they call it AirBnB arbitrage or something.  In theory it works like this, you rent a property from a landlord, letting them know that you are going to AirBnB it of course, you pay the normal monthly rent and then the rent you get from AirBnB pays you back for the rent you fronted plus your profit.  I believe that there are some startups out there that are using this model on a large scale.  

Here are the downsides: 1.  Typically you will need to have 3 times the monthly rent amount in income to qualify for the rental. 2.  You need to ensure that the local codes allow for AirBnB, 3.  You will probably have signed a 1 year lease for the rental space that you are on the hook for whether your business succeeds or not.

Maybe you could do a modified house hack on a rental space, rent a place with good AirBnB potential, live in it unless it is rented out then couch surf until you get your place back.