All Forum Posts by: Tchaka Owen

@Sarah Young - sounds like you have some of it under control which is great. This is a short comment to state that I find @James Wise's 2 comments to be among the most solid advice I've read. BP comes through again!

Living in fear is something many of us prefer not to do. Negativity is often exacerbated by the media and it's incumbent on people to discard that mindset. There's virtually no risk to anyone's safety, property or family. However, there's a significant upside if the contractor realizes he's lost business because of his views. Maybe It's likely he won't change, but he might not be so outwardly offensive. To each his/her own......I'm one who believes in addressing these types of things in the hopes of bettering ourselves.

@Grayson Gist - it's clear the contractor (and possibly the seller) are at fault. However, I'm not letting the inspector off the hook as easily as others. If this was a recent leak, the inspector would be off the hook. However, it isn't - it's long term. How did he not notice the wetness behind the walls? Inspectors here use thermal imaging as part of their work and are able to detect moisture. Your situation is more saturation than a little dampness. Do inspectors in your area not use the same devices?

@Grayson Gist - agree with all the comments above, however I'd take it another step. I'd let him know the reason you selected another person: we are a country built on the strength of a multitude of backgrounds and his racially derogatory comments are unacceptable. I'd be upfront and respectful, yet unyielding. 

@Kimberly Scott - my now former business partner just moved to Raleigh with his family. We spoke last week and he says prices have gone up a decent amount and that he sees value in the suburbs (or perhaps outside of downtown). A few comments:

1. Keep reading BP, there's a lot of good info here!

2. Contractors don't have to be told that you're a newbie. And be sure to get multiple quotes. 

3. If you can get a duplex, that would be the best way because one half is yours and you can rent the other half. Or if you buy a home, you can get a roommate or two. That also goes down as an owner-occupied property, thus enabling you to purchase with a lower down payment. 

4. The local REIA is supposed to be really good. Go to a meeting the next time you're in town.

Good luck!

@Tinley Jones -  this is hard to tell because the link gives a number of pics, however it's not the whole duplex and there's really no saying without a bunch more. I can throw some numbers, but I'm hesitant because each market is different. Ie, 5 years ago I replaced a 50 gal water heater in my home in S. Florida for approx. $600 (I got a hookup, it should have been about $650) all-in. A few months later I had to replace the one in my Virginia home; same heater, same install was a sliver under $1000. Different market. 

Any idea what the area is like and/or rent potential?

This is not illegal in Florida.

Update: I see you mean in reference to Philip using the money immediately to purchase another home. That may or may not be depending on how the lease is written. So it's potential gray area.

@Jason L. -  there's a very good chance that you will lose money by refinancing again. It costs money to refinance, so that must be factored into the equation. The difference between a cash-out and rate/term is small. Maybe 1/2 point. If you see a big change in rate, it's likely do to mortgage rates moving as opposed to you selecting rate/term. Bottom line: determine your breakeven - divide the cost of the refinance by the amount you'll save each month (this is actually a simplification) and the number you come up with is how many months to break even. At that point you'll know if it's worth refinancing.

@Michelle Shriver - Everything you've written makes sense and I get why you may have some hesitation. Three numbers I'd massage (and see if that sways you one way or the other).

1. Termite. I'm guessing you really mean Pest, because I doubt York Haven, PA has a major termite issue. You'll probably pay and they come around once a month and help keep critters away. My guess is that $150/mo is more realistic.

2. Vacancy. Often people getting housing assistance will stay put. There are inspections and paperwork that go into getting a place approved and life is easier not having to do all that. Though I'd show 10% on paper, behind the scenes you should be able to get away with 8%.

3. Management. I'll pay 8% for management. Same thing as before, when negotiating with the seller, my numbers will show 10%.. But you should be able to get it for less.

This could add up to $400/mo. That's not a big difference, but each dollar counts. Good luck!

@Edward Kiser - While there many be money to be made, my strong suggestion is that you go over the numbers again and consider a few additional costs. If you do buy at $50k, put in $60k and sell at $150k, you'll gross $40k (based on these simple numbers). Factor in $2-3k closing costs when you buy, another $1500 when you sell plus 6% realtor fees ($9k) as well as any carrying costs. If you have cash, that won't be much, but if you're borrowing or using hard money, add those in. Assuming you're cash, the net is around $26-27k. And this is being conservative.   

Here's where you have a tough choice...…..is $26-27k of profit a bad thing? That's up to you. IMO, for a lower priced deal, not at all bad. It's quite good, actually. That said, I'm not sure I'd do the deal because there's a lot of work to be done. Imagine similar final numbers but the home's $90k and it needs $20k of work. Highly likely you'll have that rehab finished quickly, make that money and be on the next deal. A $60k rehab won't happen overnight though, that will take much longer than a $20k rehab (generally).  Again, that's a decision you have to make. Good luck!